Application Under Section 29A A&C Can Be Allowed Even After Expiry Of Arbitral Tribunal's Mandate: Delhi High Court

Section 29A deals with the time limit for arbitral award. It specifies that the award shall be made within a period of twelve months from the date the arbitral tribunal enters upon the reference. However, parties may extend this period by mutual consent for up to six months. If the award is not made within this time frame, the mandate of the arbitral tribunal shall terminate unless the Court has extended the time period.

Brief Facts:

The Petitioner approached the Delhi High Court (“High Court”) seeking extension of time for completion of the arbitration proceedings. The Petitioner argued that the statutory period of 12 months under Rule 24A(1) of the International Centre for Alternative Dispute Resolution expired on December 13, 2019. An order dated November 23, 2019, extended the mandate for six months by the Arbitral Tribunal.

The parties continued with the arbitration proceedings even after the expiration of the period. On May 12, 2023, the scheduled date of May 14, 2023, was cancelled without a new date being fixed. Subsequently, the Arbitral Tribunal listed the matter for February 18, 2024. In the interim, the Petitioner, realizing the expiration of time, approached the Delhi High Court on October 4, 2023.

The Respondent contended that under Section 29A(5) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), the court may extend the time only upon a sufficient cause being demonstrated. It argued that in this instance, the Petitioner has shown a lack of diligence in pursuing the arbitration proceedings and has not presented sufficient cause to justify an extension of time. Furthermore, it asserted that arbitration proceedings continued during the pandemic via video conferencing, and it was the Petitioner who has sought adjournments and filed frivolous applications, thereby contributing to the delay.

Observations by the High Court:

The High Court noted that both parties and the Arbitral Tribunal had operated under the mistaken belief that the mandate had not expired, and they continued with the arbitration proceedings until April 30, 2023. Furthermore, the Arbitral Tribunal had set a date for February 18, 2024, indicating an intention to continue proceedings.

The High Court referred to its decision in ATS Infrastructure Ltd. and Anr. vs. Rasbehari Traders, and held that the applications under Section 29A of the Arbitration Act could be entertained even after the expiration of the Arbitral Tribunal's mandate. The High Court relied on the language of Section 29A, which did not explicitly impose outer limits on the submission of such applications. The High Court emphasized that the intention behind the provision was not to establish inflexible timelines but to allow for extensions in appropriate circumstances.

Therefore, the High Court held that the petition should be allowed.

Case Title: Psa Protech And Infralogistics Pvt. Ltd. Vs Food Corporation Of India

Citation: 2024 LiveLaw (Del) 377

Case Number: O.M.P.(MISC.)(COMM.) 517/2023

Advocate for the Petitioner: Ms. Ruchi Jain, Mr. Amogh Bansal, Advs.

Advocate for the Respondent: Mr. Manoj, SC with Ms. Aparna Sinha, Mr. MT Reddy, Advs.

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