New Delhi, Nov. 7 -- The Supreme Court has held that an arbitral award may be set aside if an undue and unexplained delay in its delivery has a demonstrable adverse impact on the tribunal's decision-making and results in material lapses. Even though delay alone is not an independent ground to strike down an award under the law, the ruling clarified that such delay can nonetheless vitiate the award if it undermines its quality, reasoning or fairness.

A bench of justices Sanjay Kumar and Satish Chandra Sharma noted that while Section 34 of the Arbitration and Conciliation Act, 1996 (which allows courts to set aside arbitral awards) does not list delay as a standalone basis to challenge an award, inordinate delay can weaken memory, distort ...