Supreme Court upholds arbitral tribunal's discretion to condone delay

The Supreme Court on Monday dismissed a plea questioning whether arbitral tribunals seated in India can override institutional arbitration rules agreed between parties on grounds of equity and “interest of justice” [Aneja Constructions v. Doosan Power]..A Bench of Justices JB Pardiwala and KV Viswanathan refused to interfere with a Delhi High Court ruling that had upheld a tribunal’s decision to condone an 84-day delay by Doosan Power Systems India in filing its statement of defence and counterclaim under the Indian Council of Arbitration (ICA) Rules..The dispute arose from a sub-contract agreement dated December 27, 2017, between Aneja Constructions and Doosan Power Systems. The agreement provided for disputes to be resolved through arbitration governed by the ICA Rules.Rule 18(a) of the ICA Rules requires a party to file its statement of defence within 60 days of receiving the request for arbitration. The rule allows an extension, but “not exceeding thirty days.”Doosan, however, filed its defence 84 days late. On July 11, 2025, a three-member tribunal headed by Justice (retd) Vikramajit Sen condoned the delay, holding that it “retains the power to extend the timelines in the interest of justice” notwithstanding the restrictive wording of Rule 18(a). The tribunal acknowledged that words such as “not exceeding thirty days” were peremptory, yet concluded that the ICA Rules did not employ such terms in a binding sense..Aneja Constructions challenged the tribunal’s order. However, Justice Manoj Jain of the Delhi High Court dismissed the petition on August 6, 2025, ruling that “the Rules are meant to guide and not bind” and that tribunals have discretion to condone delay in appropriate cases..In its special leave petition, Aneja Constructions argued that both the tribunal and the High Court ignored Section 2(8) of the Arbitration and Conciliation Act, 1996, which deems institutional rules chosen by the parties to form part of the arbitration agreement. The company submitted that by condoning a delay far beyond the ICA Rules’ limit, the tribunal had effectively “re-written the contract” and undermined party autonomy.The petitioner also relied on the Constitution Bench ruling in New India Assurance Co. v. Hilli Multipurpose Cold Storage to contend that the words “not exceeding” create a hard cap.The Supreme Court, however, rejected these arguments and dismissed the plea, leaving intact the Delhi High Court’s finding that arbitral tribunals retain wide discretion to extend timelines in the interest of justice..Aneja was represented by Advocates Sidhant Goel, Mohit Goel, Aditya Maheshwari and Ishaan Pratap Singh from Sim & San..Doosan Power was represented by Advocates Anand Shrivastava, Ishita Jain , Ankit Bhandari and Ekshat Punwani from Sagus Legal.