Arbitration Act | 'Court' Under Section 29A Takes Character Of Appointing Authority Under Section 11: Calcutta High Court

Brief Facts:

The Petitioner approached the Calcutta High Court seeking an extension of the mandate of the arbitral tribunal under sections 29A(4) and (5) of The Arbitration and Conciliation Act, 1996 (“Arbitration Act”), and requesting the exclusion of the time period from 14.07.2023 to 10.01.2024 for determining the timeliness of the application under the Arbitration Act.

The Petitioner, acting as the claimant in the arbitration, obtained an extension of the tribunal's mandate through the consent of both parties under section 29A(3) until 14.07.2023. Following this, an order documented the parties' discussion regarding filing an application for further extension before the appropriate forum.

Subsequently, on 14.07.2023, the Petitioner submitted an application before the District Judge, Asansol. However, the case was transferred successively to the Additional District Judge and then to the Judge, Commercial Court at Asansol, who ultimately rejected the application on 09.01.2024, deeming it non-maintainable.

The rejection order, uploaded on the Court's website on 10.01.2024, became available in certified copy on 11.01.2024. The application before the High Court was filed on 11.01.2024, albeit with a subsequent rectification on 15.01.2024, which marked the final submission date.

The Petitioner contended, citing section 14 of the Limitation Act, 1963, that the mandate persisted from 14.07.2023 to 10.01.2024, making any delay condonable under sections 5 and 14 of the Limitation Act, 1963.

Conversely, the Respondent argued that the mandate terminated first on 14.07.2023 and then on 09.01.2024, following the extension granted under section 29A(3) of the Arbitration Act and the subsequent rejection of the extension application by the Asansol Commercial Court. Moreover, it argued that the Court lacked jurisdiction to extend the mandate after 09.01.2024.

Furthermore, it argued that the High Court lacked jurisdiction to entertain the application, relying on the definition of “Court” under section 2(1)(e) of the Arbitration Act, and emphasizing that the Court can only “substitute” rather than re-appoint the same arbitrator post-termination.

Observations by the High Court:

The High Court noted that Section 29A delineates the duration and extension of the arbitral tribunal's mandate. It elucidates the sequential progression of the mandate from Section 29A(1) to subsequent sections, highlighting the opportunities for extension provided parties adhere to the prescribed procedures.

The High Court noted that the question before it was whether the mandate was breached before the Petitioner's application. Reviewing pertinent dates, the High Court found a continuous progression of proceedings from the inception of the mandate until the Petitioner's filing, thereby preventing any interruption or termination of the mandate.

Addressing the respondent's admission of facts amenable to Section 14 of the Limitation Act, the High Court affirmed the Petitioner's entitlement to the benefits of Section 14, considering the bona fide prosecution of civil proceedings in the Asansol District Court and Commercial Court. The High Court referred to Section 14(2) to exclude the time spent on these proceedings.

The High Court noted that the Respondent contended that the Court lacked jurisdiction to decide on the extension of the mandate, asserting that the application should have been filed before the Commercial Court at Asansol. This argument was based on the interpretation of Section 11(6) of the Arbitration Act, in conjunction with the definition of "Court" under Section 2(1)(e). Additionally, reliance was placed on Section 29A(6) to argue that the Court can only substitute an arbitrator but not re-appoint the same arbitrator in this context.

However, the High Court rejected this contention for several reasons. Firstly, it referenced a prior order dated 09.01.2024, where the Commercial Court at Asansol explicitly stated its lack of jurisdiction to extend the mandate under Section 29A of the Arbitration Act. Therefore, the High Court held that the term "Court" in Section 29A aligns with the appointing authority as prescribed under Section 11.

Furthermore, the High Court held that substitution or re-appointment is only warranted when the mandate has ended, which was not the case here, as evidenced by the continuous proceedings and the Respondent's prior consent to extend the mandate.

Given these considerations, the High Court rejected the objection to the application and proposed to extend the mandate based on the Petitioner's showing of sufficient cause.

Case Title: Praxair India Pvt. Ltd. vs Steel Authority of India Ltd.

Case Number: A.P. COM 41 of 2024.

Advocate for the Petitioner: Mr. S.N. Mookherjee, Sr. Adv. Mr. Ratnanko Banerjee, Sr. Adv. Mr. Shatanshu Panda, Adv. Mr. Dipendra Nath Chunder, Adv. Ms. Urmila Chakraborty, Adv. Mr. Shubrojyoti Mookherjee, Adv.

Advocate for the Respondent: Mr. L.K. Gupta, Sr. Adv. Mr. T.K. Banerjee, Adv. Mr. Sauvik Nandy, Adv.

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