Court Can Extend Period Of Arbitral Tribunal Even If Application Is Made After Time Limit: Bombay High Court

The High Court of Bombay has held that Section 29A permits the court to extend the mandate of the arbitral tribunal even when the application is made after the expiry of time limit provided therein.

The bench of Justice Manish Pitale clarified that Section 29A(4) allows the Court to extend the arbitrator's mandate either before or after the specified period's expiry, provided sufficient grounds are demonstrated. The purpose is to ensure the completion of arbitral proceedings, and a rigid time limit is not intended by the legislature.

Facts of the Case

The petition was filed under Section 29A of the Arbitration and Conciliation Act, 1996, seeking an extension of the mandate of the arbitrator.

Pleadings were completed on 07th February 2022, and the initial 12-month period expired on 06th February 2023. The parties consented to a further 6-month extension, making the arbitrator's mandate valid until 06th August 2023.

Final hearing sessions took place in September and October 2023, even after the expiration of the arbitrator's mandate.

Submissions by the Parties

• The Respondent relied on a Calcutta High Court judgment and a Patna High Court judgment to argue against the maintainability of the petition. It contended that an application under Section 29A(4) must be moved before the expiry of the time fixed for the completion of the proceedings.
• The Petitioners cited a Delhi High Court judgment and emphasized the flexibility provided by Section 29A of the Act for extension of time. It argued that Section 29A does not limit the power of the Court to extend the mandate of the arbitrator even after the expiry of the period provided under the section.

Analysis by the Court

The Court considered the crucial phrase "either prior to or after the expiry of the period so specified" in Section 29A(4) and its interpretation.

It noted that the Calcutta and Patna High Courts held that an application for extension must be filed before the expiration of the mandate, while the Delhi High Court adopted a more flexible approach.

The Court disagreed with the views of the Calcutta and Patna High Courts, supporting the Delhi High Court's stance. The Court concluded that the purpose of Section 29A would be defeated if it couldn't extend the mandate after its expiration, provided sufficient grounds were presented.

The Court clarified that Section 29A(4) allows the Court to extend the arbitrator's mandate either before or after the specified period's expiry, provided sufficient grounds are demonstrated. The purpose is to ensure the completion of arbitral proceedings, and a rigid time limit is not intended by the legislature.

Considering the consent of both parties for extension recorded in the minutes of the meeting and the Respondent's participation in final hearings post-mandate expiration, the Court allowed the petition.

The arbitrator's mandate was extended from 07th August 2023 to 31st March 2024.

Case Title: Nikhil H. Malkan v. Standard Chartered Investment and Loans (India) Limited, Arbitration Petition (Lodging) No. 28255 of 2023

Date 30.11.2023

Counsel for the Petitioner: Mr. Firoz Bharucha i/b Mr. Abhhishek Bhaduri

Counsel for the Respondent: Mr. S. M. Algaus, Mr. Murtaza Kachwalla, Mr. Palash Moolchandani i/b Argus Partners

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