Inordinate delay in the pronouncement of an arbitral award, without sufficient justification, renders the award patently illegal and subject to annulment under Section 34 of the Arbitration and Conciliation Act.

JUDGMENT :

AVNEESH JHINGAN, J.

1. This petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') challenging the arbitral award dated 06.03.2023 (for short 'the Award').

FACTS

2. The brief facts are that the petitioner a company incorporated under the Companies Act, 1956 (for short 'the Companies Act'), is engaged in providing general insurance. The respondent a company registered under the Companies Act is engaged in the business of hospitality and manages hotels. The respondent got its hotel in Delhi insured by taking two insurance policies, a Standard Fire and Special Perils Policy (Material Damages) (for short 'the MD Policy') bearing no. 11181790 for an insured sum of Rs.186,44,11,765/- and a Fire Loss of Profit Policy (for short 'the LOP Policy') bearing no. 11181787 having a liability limit of Rs.100,00,00,000/-. The policies were valid from 01.04.2007 to 31.03.2008.

2.1 On 26.01.2008, a fire broke out in the insured property. The respondent submitted a claim of approximately Rs.68.64 crores under the MD Policy and Rs.100 crores under the LOP Policy. During the pendency of claim, Rs. 20 crores and Rs. 30 crores were paid under the MD Policy and the LOP Policy, respectively. On 30.01.2012, the claim was settled.

2.2 The respondent invoked the arbitration clause and the Arbitral Tribunal consisting of three members was constituted on 27.04.2012. The statement of claim was filed on 07.09.2012. The award was reserved on 06.03.2021 and pronounced on 06.03.2023.

CONTENTIONS

3. Learned senior counsel for the petitioner submits that the award is liable to be set aside for inordinate delay in pronouncement. The argument is that the objection going to the root of the jurisdiction that there was no arbitral dispute between the parties was not decided. It is submitted that the intervening period of two years between reserving and pronouncing the award reflects on the consideration of the objection raised by the petitioner. It is contended that Section 29A was inserted in the Act by the Arbitration and Conciliation (Amendment) Act, 2015 (for short 'the amendment act') (Act 3 of 2016) but even thereafter in present case the arbitration took more than six years to conclude. Reliance is placed upon the decisions of this court inHR Builders v. Delhi Agricultural Marketing Board 2024 SCC OnLine Del 7635,Gian Gupta v. MMTC Ltd. 2020 SCC OnLine Del 107 and the decision of the Division Bench of this court in BWL Ltd. v. Union of India 2012 SCC OnLine Del 5873 to buttress the argument that the award should be set aside for inordinate delay in pronouncing the award.

3.1 Learned senior counsel for the petitioner relies on the decision of this court inDelhi Development Authority v. GL Litmus Events (P) Ltd. 2025 SCC OnLine Del 9906 to contend that after considering the decision of the Supreme Court inM/s. Lancor Holdings Limited v. Prem Kumar Menon & Ors. 2025 INSC 1277 the Division Bench of this court upheld the decision of the learned Single Judge setting aside the arbitral award for inordinate delay in pronouncing the award.

4. Per contra the award can be set aside on the ground of delay only in cases where the delay is unexplained and adversely reflects in the findings recorded. Reliance is on the decision of the Supreme Court in M/s. Lancor Holdings Limited (supra) and on th