In 2015, Section 29A (Time Limit for arbitral award) was inserted in the Arbitration and Conciliation Act, 1996 ("Act"). As per which, the award is required to be made within a period of twelve months from the date the arbitral tribunal enters upon the reference. Further, an explanation was added to this section which states that an arbitral tribunal shall be deemed to have entered upon the reference on the date on which the arbitrator or all the arbitrators, as the case may be, have received notice, in writing, of their appointment. In addition, as per sub section 3 of the Section 29A, the parties could, by consent, extend the aforesaid period of 12 months period for making award for a further period not exceeding six months.
Therefore, the time limit for making the Award under the Act was 18 months from the arbitral tribunal entering upon the reference. If the award is not made within the aforesaid period of 18 months, the mandate of the arbitrator(s) was to terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period.
In 2019, Section 29A of the Act was amended with effect from 9th August 2019 whereby, Section 29 A (1) of the Act was substituted as follows: "The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23". Sub-section (4) of section 23 was added in 2019 which states that the statement of claim and defence under this section shall be completed within a period of six months from the date the arbitrator or all the arbitrators, as the case may be, received notice, in writing, of their appointment. Accordingly, as per 2019 amendment, Award is to be made by the Arbitral Tribunal within 12 months from the date of completion of proceedings. Further, by virtue of sub section 3 of section 29A, this period of 12 months may be extended by the consent of the parties for another 6 months.
Recently, the High Court of Delhi1 held that the time limit for completion of arbitration proceedings enhanced by amending Section 29 A (1) of the Act through the 2019 amendment is applicable to arbitrations pending as on the date of amendment. In this matter, the Arbitral Tribunal entered upon reference on 26 May 2018 and the time period for conclusion of the arbitration proceedings in terms of Section 23 (4) and 29A (1) of the Act was up to 23 November 2019 and the parties by consent mutually extended the time period by six months which period is to be expired on 23 May 2020. The Court observed that Section 23 (4) and 29A (1) of the Act, being procedural law, would apply to the pending arbitrations as on the date of the amendment. Therefore, the Court held that the time period for conclusion of arbitration proceedings has not yet expired.
In light of the above, time limit for completion of the arbitration proceedings enhanced under Section 29 A is applicable to proceedings pending as on the date of 2019 Amendment i.e. 9th August 2019. Therefore, in the arbitration proceedings pending as on 9 August 2019, the arbitral tribunal is required to make the award within 12 months after completion of pleadings under sub-section (4) of section 23 of the Act and the parties may by consent extend this period of 12 months for a further period of 6 months.
1. Shapoorji Pallonji and Co. Pvt. Ltd. vs. Jindal India Thermal Power Limited O.M.P. (MISC.) (COMM.) 512/2019
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