Can acknowledgement of arbitral award via WhatsApp bind parties? Delhi HC answers

The Delhi High Court has held that a party that acknowledges an arbitral award on WhatsApp and acts on it cannot turn around and challenge the award at a belated stage, after execution proceedings are initiated [Vinay Mawandia Vs Bimal Mawandia].

Justice Harish Vaidyanathan Shankar made the observation while dismissing a petition filed by Vinay Mawandia (petitioner) under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to set aside an interim arbitral award passed in a family property dispute.

His petition was opposed by two of his brothers on the ground that it was filed beyond the limitation period prescribed for appeals under the Arbitration Act.

The petitioner countered that he had not received a signed copy of the award and that his plea was not barred by limitation. He argued that he became aware of the arbitral award only once execution proceedings began.

The Court found that the award had been uploaded in a WhatsApp group created for the resolution of disputes between members of the Mawandia family. Vinay Mawandia had responded to the message with “Noted thanks.”

The Court observed that this acknowledgement was not a mere formal response, since it was followed by discussions on the implementation of the award. It, therefore, rejected the petitioner's claim that he had not formally received the arbitral award at the time.

"The material placed on record unmistakably demonstrates that immediately after the Award was uploaded in the WhatsApp group created for resolution of the disputes, the Petitioner acknowledged receipt thereof by responding 'Noted thanks.' Such acknowledgement was not a mere formal response but was followed by continuous discussions amongst the parties regarding the implementation of the Award ... these discussions were not unilateral communications by the Respondents but involved active participation of the Petitioner ... Such conduct unequivocally establishes that the Petitioner had accepted the existence of the Impugned Award and consciously acted upon the same," the Court said.

The case before the Court concerned a dispute between brothers from the Mawandia family, who had earlier carried on a family business together. In 2019, the parties entered into a Memorandum of Understanding for division of certain family and group-company properties. After disputes arose, they entered into an arbitration agreement in June 2021.

The arbitral tribunal passed an interim award on November 13, 2021, concerning two properties.

Bimal Mawandia and Bijay Mawandia later filed an execution petition to enforce the award. Vinay Mawandia, on the other hand, filed a Section 34 petition in 2024 to challenge it.

Vinay argued that no signed copy of the award had been delivered to him under Section 31(5) of the Act. He claimed that the limitation period had therefore not begun to run when the award was sent on WhatsApp.

He also argued that the award affected the rights of Madhu Mawandia, who was not a party to the arbitration agreement, and that the award bore the signatures of only two of the three arbitrators.

The Court rejected the contentions.

It noted that after the WhatsApp acknowledgement, the parties discussed preparation of gift deeds, transfer deeds, bank no-objection certificates, removal of movables from the property and other consequential steps for implementation of the award.

The Court also found that Vinay had actively participated in these discussions, raised conditions for execution of transfer documents and suggested modifications to draft deeds.

“Having consciously accepted the Impugned Award as a consensual resolution of their disputes and having acted upon the same without protest, the Petitioner cannot now be permitted to approbate and reprobate by questioning the very Award which had been accepted and sought to be implemented,” the Court said.

The Court added that a consensual and mutually accepted award carries a higher degree of sanctity. In the absence of fraud, coercion or other vitiating circumstances, a party cannot resile from such a settlement merely because he later had a change of heart.

The Court also held that the petition was hopelessly barred by limitation. It said Vinay had complete knowledge of the award in November 2021, acknowledged it and acted upon it, but challenged it only after execution proceedings began.

The objection petition was, therefore, dismissed.

Vinay Mawandia was represented by Advocates Amit Bhagat and Arzoo Raj.

Bimal Mawandia and Bijay Mawandia were represented by Advocates Niyati Kohli, Rishabh Parikh and Pratham Vir Agarwal.

[Read Judgment]