S.29A(4) Arbitration Act | Courts Can Extend Arbitrator's Mandate Without Parties' Consent: Kerala High Court

The Kerala High Court recently held that the mandate of an arbitrator can be extended under Section 29A(4) of the Arbitration and Conciliation Act, 1996, even if the parties have not extended the period by consent.

Justice Murali Purushothaman thus revived and extended the arbitrator's mandate to allow for the completion of the arbitral proceedings.

"Sub-section (4) of Section 29A deals with cases where the award is not made within a period of twelve months from the date of the completion of the pleadings and it provides that, if the award is not made within the period specified in sub-section (1), the mandate of the Arbitrator shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period. The said sub-section with the use of the conjunction 'or' also applies in cases where the award is not made within the extended period not exceeding six months specified in sub-section (3). It is not as if it applies only to cases where the period is extended under sub-section (3)."

The petitioners and respondents had disputes regarding an LLP agreement and invoked the arbitration clause. The court appointed an arbitrator, who commenced the reference on November 1, 2021.

On the final day of hearing, the Arbitrator informed the parties that his tenure had expired and it would take further time to make an award and asked the parties to file a joint petition to continue the proceedings.

The respondents/claimants argued that the mandate of the Arbitrator stands terminated on expiry.

However, the petitioners countered that the time limit for arbitral award under Section 29A(1) read with Section 23 (4) has to be counted from the date of allowing the application to amend the claim statement and that the application to record termination of mandate was filed to delay the finalisation of the arbitration proceedings.

Advocates Santhosh Mathew and Vijay V. Paul appearing for the petitioners contended that both parties had participated in all 34 hearings even after the expiry, which implied a deemed acceptance of the continued arbitration. Thus, they requested a 6-month extension of the arbitration period to consider and decide on their counterclaim. It was also pointed out that the delay had occurred at the instance of the respondents and the Covid-19 pandemic.

However, Advocate P.R Shaji representing the respondents contended that since the parties did not consent to extend the period specified in the Act, the arbitrator's mandate could not be extended. They also mentioned a separate petition filed before NCLT, Kochi for the winding up and dissolution of the LLP.

The court heard arguments from both sides and examined the relevant provisions of the Act. It acknowledged that Section 29A(1) sets a mandatory period of 12 months for the arbitrator to render an award in domestic arbitration. However, the Court was empowered to extend the period for sufficient cause under Section 29A on the application of any of the parties.

The Court rejected the respondents' argument that the mandate can only be extended if the parties consented to an extension under Section 29A(3). Justice Purushothaman clarified that Section 29A(4) applies when the award is not made within the specified period, including the extended period under Section 29A(3).

In this case, since the parties did not extend the period, the mandate of the arbitrator had expired.

However, the court found sufficient cause to extend the period for making the award since the evidence had been completed and the final hearing had commenced. It was also highlighted that the proceedings had been delayed due to interlocutory applications and the COVID-19 pandemic.

The Court further pointed out that the Arbitrator himself had requested the parties to approach the court for an extension.

Accordingly, the Court revived and extended the mandate of the arbitrator until September 30, 2023. It directed the parties to cooperate with the arbitrator to complete the proceedings.

Case Title: Hiran Valiiyakkil Lal & Ors v Vineeth M.V & Ors

Citation: 2023 LiveLaw (Ker) 332

Click Here To Read/Download The Order

Full View