When Delay Defeats the Purpose: Supreme Court Re-defines the Limits of Patience in Arbitration.

Supreme Court Addresses Arbitration Delays: Redefining Patience in Legal Proceedings.

Introduction

Speed is the soul of arbitration. Yet, when the decision itself arrives years after the arguments have faded from memory, the very object of arbitration collapses. The Supreme Court’s ruling in M/s Lancor Holdings Ltd. v. Prem Kumar Menon & Ors. (2025 INSC 1277) is a wake-up call to arbitrators and parties alike. The Court held that a four-year delay in delivering an award, coupled with an incomplete resolution of the dispute, could render the award unworkable and contrary to the public policy of India.

Background of the Dispute

The case arose from a 2004 Joint Development Agreement between a Chennai-based real-estate developer, Lancor Holdings, and three landowners. While the developer was to construct and share the project equally, disputes erupted over whether the construction was completed, whether the architect’s certificate was valid, and whether sale deeds executed on a photocopied power of attorney were lawful. Arbitration proceedings dragged on; the tribunal heard evidence and closed arguments in July 2012 but pronounced its award only in March 2016.

What the Arbitrator Decided and what was Omitted

The arbitrator concluded that the building was incomplete and that the sale deeds were illegal. Yet, the tribunal stopped short of granting effective relief. Monetary claims were left open, and no final computation or direction was issued. For the parties, it was a hollow victory: after years of proceedings, they were still uncertain about what they had actually won or lost.

Supreme Court’s Intervention

The Supreme Court analysed two issues, whether delay can invalidate an award and what happens when an award fails to settle the dispute. It recognised that arbitration law, unlike litigation, does not provide an automatic expiry date for awards. Nevertheless, unexplained delay, especially when it visibly affects reasoning or accuracy, can constitute a violation of public policy or a patent illegality under Section 34. The Court observed that the arbitrator’s memory and selective recollection after nearly four years could not inspire confidence.

The Bench further held that parties need not first move under Section 14 to terminate an arbitrator’s mandate before invoking Section 34; such insistence would defeat practicality.

The Doctrine of “Unworkable Awards”

A particularly valuable aspect of the judgment is the articulation of “unworkable awards.” If an award decides liability but withholds relief, or if it changes parties’ rights irreversibly while compelling them to start afresh, it undermines the very efficiency arbitration promises. The Lancor award, the Court found, had become functionally useless, it resolved some issues in principle but left the parties in continuing conflict.

Invoking Article 142 for Finality

Instead of pushing the parties into another cycle of arbitration, the Supreme Court invoked its constitutional power under Article 142 to do “complete justice.” Recognising that sixteen years had passed since the contract, the Bench moulded equitable directions to bring the saga to an end. This pragmatic approach saved both time and resources and underscored the Court’s intolerance for procedural paralysis.

Lessons for Practitioners and Arbitrators

For arbitrators, the message is unequivocal: delay without explanation is no longer a harmless administrative lapse, it is a potential ground for annulment. For parties and counsel, meticulous record-keeping, interim reminders, and prompt applications can safeguard the enforceability of awards. Post-2016 amendments introducing Section 29A, which fix a twelve-month timeline for domestic awards, are consistent with this policy shift towards accountability and expedition.

Conclusion and Author’s Opinion

The Lancor decision humanises arbitration by re-emphasising that speed and substance must travel together. The Court’s nuanced position, that delay is not automatically fatal but can be if it undermines fairness, strikes the right balance between respecting arbitral independence and protecting litigants from procedural injustice.

From a practitioner’s lens, the judgment is both a warning and a guide. It warns arbitrators that silence and delay erode faith in private adjudication. It guides parties to draft clearer procedural timelines and to seek institutional supervision when possible. Ultimately, Lancor re-affirms that arbitration’s promise of efficiency is not self-executing; it thrives only when diligence matches discretion.

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