High Court raps Arbitrators: You cannot take your own sweet endless time to conclude proceedings (Read Judgment)

The Madras HC has made it clear that arbitrators can't take their own sweet time to file report or pass final award after concluding the hearing & that when there is a delay with unexplained reason, that award is violation of public policy & the same has to be set side.

“A number of judgments of the Supreme court makes it clear that it is natural for any arbitrator to forget contention & pleas raised by the parties during the course of arguments. There is a huge gap between the last date of hearing & the date on which the award has been made. The arbitrators should make & publish the award within a reasonable time,” Justice N Sathish Kumar said.

What is reasonable time is flexible & depends on the facts & circumstances of each case.

In case there is a delay, it should be explained. Abnormal delay without satisfactory explanation certainly causes prejudice to the other party, the court added.

The judge made the observations on a plea moved by K Dhanasekar, a railway engineering contractor, challenging an award passed by the arbitration panel of the Southern Railway in connection with disputes in contract for supply of granite ballast to the railway dated May 23, 2014.

When the plea came up for hearing, the court said, in the present award claim statement was filed on Sept 30, 2008, the counter claim was raised on Decr 20, 2008, & hearing started on Jan 21, 2009, & completed on Feb 1, 2011.

Thereafter, written submissions were also received by the arbitrators on May 15, 2009.

However, the award was passed only on Mar 25, 2014, after more than three years & seven months & the delay hasn't been explained in the entire award, the judge added.

The court then set aside the award & directed the railway to appoint fresh arbitrators to adjudicate the issue within 3 months.

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