Think of a race where the finishing line keeps moving. Section 29A of the Arbitration and Conciliation Act, 1996 (hereinafter the A&C Act, 1996) , grapples with just this dilemma in arbitral jurisprudence. Viewed to be a check to ensure that the arbitral process remains efficient and effective, the provision places a specific period within which arbitral awards are required to...
Think of a race where the finishing line keeps moving. Section 29A of the Arbitration and Conciliation Act, 1996 (hereinafter the A&C Act, 1996) , grapples with just this dilemma in arbitral jurisprudence. Viewed to be a check to ensure that the arbitral process remains efficient and effective, the provision places a specific period within which arbitral awards are required to be pronounced. But what happens when the race ends and it seems as though the finish line is still within view? The law seems clear - once an award is delivered, the race is over, and the mandate of the tribunal stands expired. The courts, however, have tugged along a long controversy about whether they have the discretion to move that finish line even after the award has been passed. The effect? A string of conflicting decisions has kept the legal world wondering what the true scope and limitations of Section 29A truly are.
A momentous shift was marked when Section 29A came into the statute books through an amendment to the A&C Act in the year 2015 and provided for specific timelines for the completion of arbitral proceedings. The Amendment laid stress upon the period of twelve months for making of an arbitral award after the arbitral tribunal enters upon reference. The amendment was clear in its sweep but came with a bit of chaos as to whether the twelve-month period would apply equally to domestic as well as international arbitration. To remove such an uncertainty, a High-Level Committee headed by Justice B N Srikrishna was set up to assess the institutionalization of arbitration in the country and the committee recommended that the twelve-month timeline for the making of the award should come into the picture after the pleadings have been completed. It was also recommended that the twelve-month period should not apply to international arbitrations. Consequently, based upon the recommendations of the committee, Section 29A was further amended in 2019.
Section 29A provides for strict timelines for the conclusion of arbitral proceedings. It states that other than international commercial arbitration, the arbitral tribunal shall make the award within the period of twelve months from the date of completion of pleadings. This period can be extended by mutual consent of parties for a further period of six months. However, if the tribunal does not make the award within this period, then the tribunal's mandate automatically stands terminated unless the court has, either prior to or after the expiry of the period so specified, extended the period. This extension period can be only granted by the court on the application of any of the parties and can be granted only for sufficient cause.
The High Court of Madras in the matter of Suryadev Alloys and Power Pvt. Ltd v. Shri. Govindaraja Textiles Pvt. Ltd., 2020 SCC OnLine Mad 7858 highlighted the distinction between the 1940 and 1996 Arbitration Acts, particularly in terms of the court's power to extend the time for making an award. The court held that under the 1940 A&C Act, Section 28(1) gave the court wide powers to increase the time for making an award even after the expiry of the original time period. The 1996 A&C Act, on the other hand, intended to streamline and modernize arbitration in India and considerably cut down on these powers by the introduction of Section 29A. The mandate of the arbitrator stood automatically terminated under Section 29A, in case of non-completion within the period provided, unless such time is extended by the court within the framework provided under Section 29A(3) and 29A(4). The Court further clarified that it lacks the authority to retrospectively condone an award by extending the time limit after the award has been made, particularly in a petition under Section 34 dealing with setting aside an award.
From the above judgment, it can be concluded that Section 29A of the A&C Act, 1996 prescribes strict limits regarding the time period within which the arbitral award is to be pronounced. The decision of the Madras High Court in Suryadev Alloys (supra) embodies the essence that with the pronouncement of an award, the arbitral tribunal's mandate comes to an end and any extension of time has to be applied for before the expiry of the tribunal's mandate.
However, recent judicial decisions have seen conflicting judgments on whether the court has the authority to extend the time for making an award under Section 29A, even after the award is delivered. Such conflicting decisions have given rise to the debate that, notwithstanding the literal meaning of Section 29A as pronounced in the case of Suryadev Alloys (supra) whether the court still retains any residual discretion to extend the mandate of the arbitral tribunal post the delivery of the award.
This High Court of Delhi in the matter of Powergrid Corporation of India Ltd. v. SPML Infra Ltd., 2023 SCC OnLine Del 8324 held that an application under Section 29A of the A&C Act, 1996 seeking extension of the mandate of the Arbitrator is not tenable, as the Award already stands delivered. The court in its judgement reasoned that Section 29A of the A&C Act of 1996 includes no express provision for the Courts to grant an extension after an award has been rendered. If the legislature had meant for Section 28 of the A&C Act of 1940 to apply to Section 29A of the A&C Act of 1996, it would not have been excluded from the provision's language. Subsection 4 of Section 29A clearly states that if the award is not made within the prescribed period, the Arbitrator's mandate will stand to be terminated unless the Court has either prior to or after the expiration of the period extended the period. Thus, the provision clearly states that the processes must remain pending and unresolved and that an extension of time may be requested even after the Arbitrator's mandate has expired, but only if the Award has not been issued and the proceedings are still ongoing.
Furthermore, having the occasion to deal with a similar issue, the High Court of Delhi, recently, in National Skill Development Corporation v. Best First Step Education Pvt. Ltd., 2024 LiveLaw (Del) 265 held that Section 29A application is maintainable if it is filed before the award is made and the resulting award is made while the application is pending. An application made after delivery of the award and commencement of proceedings for its setting aside is not maintainable.
However, the High Court of Kerala in its recent decision in the matter of RKEC Projects Limited v. The Cochin Port Trust, 2024 SCC OnLine Ker 4192 held that a petition under Section 29A of the A&C Act, 1996 is tenable even after delivery of the award provided that there is a sufficient cause. It was argued that termination of the authority of arbitrator according to Section 32 of the A&C Act is not absolute in its nature and can be subject to powers of extension provided by sections 29A(3) and (4). The High Court ruled that even though the arbitrator's mandate has ended, the court is still able to consider applications for extensions under Sections 29A(3) and (4), which permit applications to be submitted for time extensions to be considered before or after the deadline has passed.
The court in its judgement has reasoned that while the mandate of the arbitral tribunal has been held by Courts to extend beyond the date on which the award is passed if there is a pending application for extension of time under Section 29A(5), such interpretation has emerged that while the arbitral tribunal's mandate normally comes to an end with the delivery of the award, the termination is not absolute but could always be subject to the powers of the court under Section 29A. Furthermore, while Section 32(1) provides that the arbitral proceedings terminate with the final award, it is subservient to the court's power to extend the mandate of the tribunal under Section 29A. Thus, under Section 32, the termination of the mandate of the arbitral tribunal is not an absolute factor but depends upon the court's decision under Section 29A of the Act. Thereafter, Section 33 section empowers the tribunal to correct mistakes, interpret the award, or make additional awards upon delivery. This further solidifies the possibility that the functions of the tribunal may not necessarily have to end with the issuance of the ward but continue further, of course, in limited instances provided for under the Act.
A conspectus of the above would reveal that there is a conflict of opinion between the High Court of Delhi and the High Court of Kerela with regard to the interpretation of Section 29A of the A&C Act. While the High Court of Delhi has maintained a consistent stance that after the award has been passed an application for extending the mandate of the arbitral tribunal remains unsustainable in the eyes of the law, the High Court of Kerela has gone to the other side of the tunnel by holding that the arbitral tribunal's mandate can be extended even after the pronouncement of an award if there are sufficient grounds for doing so. Therefore, it would be interesting to see how the Supreme Court deals with such an interpretation if called upon to do so. There is nothing in the section which allows the extension of the tribunal's mandate after the award has been passed but will the scenario change when there are sufficient grounds for extending the mandate even after the delivery of an award? Time will tell as to what is the correct position of law when the Supreme Court is seisin of such a matter.
Chetna Alagh is an Advocate . Views are personal.