Mere Delay In Pronouncement Of Arbitral Award Does Not Invalidate It Unless Prejudice Is Shown: Delhi High Court
Mohd Malik Chauhan
16 Jan 2026 2:37 PM IST
The Delhi High Court has held that mere delay in pronouncement of an arbitral award does not by itself suffice to set it aside under section 34 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act") unless the delay is undue, unexplained and demonstrably prejudicial to the parties.
The Delhi High Court has held that a delay in the pronouncement of an arbitral award is not enough to set it aside, unless the delay is undue, unexplained and demonstrably prejudicial to the parties.
A Division Bench comprising Justice Anil Kshetarpal and Justice Amit Mahajan dismissed an appeal filed under section 37 of the Arbitration Act read with section 13 of the Commercial Courts Act, thereby upholding an arbitral award directing repayment of a friendly loan along with interest.
Background:
The appeal arose out of an arbitral award dated 15 November 2019, whereby the appellant Om Prakash was directed to pay ₹6,00,000 to the respondent Smt. Laxmi Maurya, along with interest of ₹3,15,000 for the period from April 2012 to January 2014, further interest at 8% per annum till realization, enhanced to 10% per annum in case of default beyond 90 days, and ₹35,000 towards litigation costs.
The respondent claimed that she had advanced loan against the mortgage agreements executed with possession of the first floor of the subject property handed over as security. Upon default, arbitration was invoked in terms of an arbitration clause contained in the agreements. The challenge to the award under section 34 was also dismissed leading to the present appeal under section 37.
The Appellant contended that the award was vitiated by undue delay of fourteen months between the matter being reserved and the pronouncement of the award. It was further argued that the appellant never admitted the liability to the tune as granted in the award. Lastly, it was submitted that since the mortgage deeds were untamped and unregistered, reliance could not be placed on them and that no valid mortgage could have been created on the property since the property was situated in a JJ Resettlement Colony on government land.
Findings:
Rejecting the appellant's contention that the award was vitiated by undue delay, the court observed that mere delay in pronouncement of an arbitral award does not by itself render it invalid and cannot be set aside under section 34 unless such delay has caused prejudice to a party.
“... such delay would warrant interference only where it is undue and unexplained and where its adverse effect is explicit, demonstrably impacting the reasoning, fairness, or validity of the award, thereby rendering it in conflict with the public policy of India or vitiated by patent illegality. Applying the aforesaid settled legal position to the facts of the present case, this Court finds that the Appellant has failed to establish any prejudice or infirmity in the award attributable to the alleged delay”, the court held.
The court noted that the appellant failed to show prejudice caused by the delay. The court further noted that the appellant clearly admitted the amount in a written statement filed before the arbitrator though repayment was disputed.
It further observed that the burden to prove repayment lay on the appellant who failed to produce any receipts or documentary evidence. On the objection regarding unregistered and insufficiently stamped mortgage deeds, the court observed that even assuming that the registration was mandatory, the documents could still be relied upon for collateral purposes under section 49 of the Registration Act.
It observed:
“...even if the mortgage deeds are technically required to be registered, they can nevertheless be relied upon for collateral purposes, as contemplated under Section 49 of the Registration Act, 1908. Moreover, the Respondent has succeeded in proving her case by leading independent and cogent evidence, in addition to relying on the Appellant's admission…No receipts or other records acknowledging repayment of the loan have been produced. Onus to prove his assertion lay upon the Appellant, but he failed to discharge the same by leading cogent evidence”.
Furthermore, the appellant, the court noted, had failed to object to their admissibility at the appropriate stage thereby attracting the bar under section 36 of the Indian Stamp Act.
Accordingly, the court dismissed the present appeal holding that mere delay in pronouncement of the award by itself does not invalidate an arbitral award unless prejudice is caused to any party by such delay.
Case Title:Om Prakash v. Smt Laxmi Maurya
Case Number: FAO (COMM) 57/2023, CM APPL. 11061/2023, CM APPL. 11062/2023
Citation: 2026 LLBiz HC (DEL) 46
Judgment Date: 13/01/2026
For Appellant: Saurabh Kansal, Adv.
For Respondent: Rohan Ahuja, Adv.