- within Litigation, Mediation & Arbitration, Environment and Law Department Performance topic(s)
- in United States
Background
In September 2025, the Supreme Court of India in Aneja Constructions (India) Ltd v Doosan Power Systems India Pvt Ltd & Ors (Aneja Constructions) dismissed a challenge to the Delhi High Court's judgment, affirming that an arbitral tribunal could extend the timeline for filing a statement of defence and counterclaim beyond the timeline set out in Rule 18(a) of the Indian Council of Arbitration (ICA) Rules 2024 (the Rules). The Supreme Court found "no reason to interfere with the impugned order" and thus confirmed the reasoning of the Delhi High Court (the Court).
The dispute in this case arose from a sub-contract agreement dated 27 December 2017, between Aneja Constructions and Doosan Power Systems. The agreement provided for disputes to be resolved by arbitration under the ICA Rules.
Rule 18(a) of the ICA Rules requires a respondent to file its statement of defence within 30 days of receiving the statement of claim, or within any extended date "not exceeding thirty days". The rule thus imposes an upper limit of 60 days within which respondents can file their defence.
Doosan Power, respondent in this case, filed its defence 84 days after the expiry of the 60-day extended timeline under Rule 18(a). The delay in filing was condoned by the Arbitral Tribunal. Aneja Constructions petitioned the Delhi High Court under Article 227 of the Constitution of India, which provides High Courts with overarching supervisory jurisdiction over the courts and tribunals within their jurisdiction, challenging the Tribunal's order condoning Doosan Power's 84-day delay in filing its defence.
Jurisdictional question
The petitioner/claimant argued that in the absence of any agreement between the parties for extension of time, the Tribunal did not have the discretion to extend the timeline for filing the statement of defence under Rule 18(a) of the ICA Rules beyond the 60-day upper limit provided in the Rule itself. The Delhi High Court highlighted the "very constricted" ambit of its jurisdiction to interfere with an arbitral tribunal's ruling under Article 227 of the Constitution of India, citing its judgment in Kelvin Air Conditioning & Ventilation System (P) Ltd. v. Triumph Reality (P) Ltd.as precedent.
The Court's jurisdiction under Article 227 is supervisory, not appellate, and especially restricted in challenges to arbitral tribunals' decisions where the grounds for interference are limited to bad faith, exceptional rarity, or absolute perversity. The Court was mindful of these limitations and refused to exercise its jurisdiction to interfere with the decision of the Tribunal.
Interplay between statutory provisions and institutional rules
The Indian Arbitration and Conciliation Act 1996 (the Act) lays down the law relating to domestic arbitration, international commercial arbitration, and enforcement of foreign arbitral awards in India.
- Section 2(8) of the Act stipulates that the arbitration agreement shall include the institutional rules agreed by the parties, giving institutional rules the status of a contract so as to bind parties.
- Section 25(b), dealing with the respondent's failure to file its statement of defence on time "without sufficient cause": (i) requires arbitral tribunals, "unless otherwise agreed by the parties", to continue the proceedings without treating it as an admission of the allegations; and (ii) provides tribunals the discretion to treat the respondent's right to file such statement of defence as forfeited where the respondent fails to file its defence.
The Tribunal and the Delhi High Court rejected the petitioner's argument that the Tribunal did not have the power to extend the time for filing a defence beyond the extended period of 60 days. The Court held that the time limit could be extended, notwithstanding the ICA Rules, if found to be in the interests of justice, where the party praying for extension could establish sufficient cause.
Secondly, the Court rejected the petitioner's request that the statement of defence and counterclaim be struck off the record for being filed in violation of the ICA Rules. Although the Court observed that the ICA Rules should ordinarily be adhered to, they lacked any statutory force as they emanate not from any statutory authority under the Act, but the ICA, which has not been delegated any power under the Act.
Thirdly, the Court held that the ICA Rules did not contain the necessary peremptory limiting words which would preclude the extension of the timeline by the Tribunal. In this regard, the Court cited and affirmed para 20 of the Tribunal's impugned order as follows:
"20. Moreover, the statutory provisions employ the words "not exceeding fifteen days", "not exceeding thirty days", "but not thereafter". These, words are not found in Section 23(4) the Act dealing with the period within which pleadings (SoC and SoD) should be filed, thereby making a very significant departure. Significantly, the ICA Rules also intentionally and justifiably do not use these peremptorily limiting words."
The Court concluded that the Rules are meant to "guide and not bind." It went on to note:
"21. Arbitral Tribunal cannot be reduced to a powerless creature. Whenever it finds that any party was prevented by any sufficient cause, it has ample power to condone the delay in interest of justice, irrespective of the Rules in question which are, even otherwise, more of procedural nature. Need we emphasize, the rules of procedures are merely handmaidens of justice and cannot be permitted to govern and overpower the justice. Moreover, the procedural rules are meant to be interpreted liberally because any narrow or rigid interpretation might render the entire arbitral process redundant." (emphasis added)
It also referred to the Tribunal's reliance on the Supreme Court's decision in Srei Infrastructure Finance Ltd. v. Tuff Drilling Pvt. Ltd. (2018) 11 SCC 470, with approval, observing that procedural timelines can generally be extended for both the claimant and the respondent to ensure complete justice. In Srei, the Supreme Court had held that, on sufficient cause being shown, the arbitral tribunal could accept the statement of claim even after expiry of the time period prescribed by Section 23(1) of the Indian Arbitration and Conciliation Act, and it was not obligatory for the tribunal to terminate the proceedings in such a case.
Comment
This judgment reflects the Indian courts' reluctance to interfere with the procedural directions of arbitral tribunals, especially when the consequence of such interference would be to deprive a party of the possibility of presenting a defence altogether. Although the judgment recognises the importance of institutional rules agreed between parties, the decision is an indication that there remains scope for the interpretation of these rules in spite of their contractual status, particularly where the rules are not consistent with the relevant statutory provisions. Although the respondent in this case was not precluded from filing a defence, the decision also serves as a caution for parties to consider carefully, and adhere to relevant institutional rules.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
