The delayed settlement of the arbitration proceedings had formed an eclipse over the speedy resolution of the disputes in India. The introduction of Section 29A of the Arbitration and Conciliation Act, 1996 (hereinafter "Act") by the Legislature was done with the purpose to complete the pleadings efficiently and expeditiously within a reasonable time. The idea of having a time limit for pronouncing an Arbitral award date back to September 12, 2001, in the 176th Law commission report leading to the introduction of Section 29-A of the Act.1 According to Section 29A, the Arbitral Tribunal has been vested with a time-period of 12 months for concluding the arbitration proceedings alongside passing the award and the same can only be extended by 6 months with the consent of the parties.2 Any further extensions shall only be granted by the concerned court under Section 29(5) of the Act. Further, this provision is not intended for a party to seek substitution of an Arbitrator only because the party has apprehension about the conduct of the arbitration proceedings by the said Arbitrator.
The only ground for removal of the Arbitrator under Section 29A of the Act can be the failure of the Arbitrator to proceed expeditiously in the adjudication process.3
This article shall predominantly be focusing on the instances, whereby the time-period of 12 months has been relaxed placing reliance on the case laws to support the instances. It shall also be dealing with the issue of the jurisdiction of the courts that shall be entertaining the application for the extension of time for passing an award under Section 29A.
Instances under which Application for extension of time has been granted
I. Impact of Covid-19 on seeking extension of time
Considering the dire situation that was brought forth by COVID-19, a liberal approach was sought by the Supreme court keeping aside the speedy resolution of the disputes as it proceeded with the exclusion of the period lost due to the pandemic w.e.f. 15.3.2020 till further orders re-starting the period of limitation for Sections 29-A and 29-B of the Act.4 The Apex court further took a Suo Moto cognizance for the Extension of Limitation5 under Section 29A of the Arbitration & Conciliation Act that was reiterated in the case of Prakash Corporates v. Dee Vee Projects Limited6 wherein the Apex court laid down:
"...We also take judicial notice of the fact that the steep rise in COVID-19 Virus cases is not limited to Delhi alone, but it has engulfed the entire nation. The extraordinary situation caused by the sudden and second outburst of COVID-19 Virus, thus, requires extraordinary measures to minimize the hardship of litigant-public in all the states. We, therefore, restore the order date d 23rd March 2020 and in continuation of the order dated 8th March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders. It is further clarified that the period from 14th March, 2021 till further orders shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996." "The period from 15.03.2020 till 02.10.2021 shall also stand excluded in computing the periods prescribed Under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996."
II. Extension of time sought due to death of the arbitrator
Another instance where the courts had to interpret the existence of sufficient cause as per section 29A (5) of the Act was in cases where the mandate of the arbitrator was terminated due to his death.
It was observed in the case of International Trenching Pvt. Ltd. v. Power Grid Corporation of India Ltd.7 wherein an application under section 29A of the Act for seeking an extension of time for making the arbitral award was filed due to the death of the Presiding arbitrator.
The court held that the proceedings could not be concluded within the statutory period on account of the demise of the Presiding Arbitrator and the delay that occurred in reconstituting the Tribunal and secondly, on account of the very nature of the disputes between the parties, which are technical and involves several volumes of documents. The court considering this to be a sufficient cause allowed the petition.
In case of C.G. Gurucharan and Ors. vs. R.K. Estates and Ors.8 the mandate of the Sole Arbitrator stood terminated in terms of Section 29A (4) of the Act and the court held that the provisions of Sections 7, 11, and 15 of the Act clearly state that Arbitration Agreement, proving for resolution of disputes by Sole Arbitrator, Death of Sole Arbitrator, Survival of Arbitration Agreement post death depends on the intention of parties. If Arbitration Agreement does not prohibit the appointment of a substitute Arbitrator, Court can appoint one - Arbitration Clause providing for the resolution of disputes arising at any time between parties by the Sole Arbitrator, has no nexus with the lifetime of the Sole Arbitrator. The Court can appoint another arbitrator on the death of the Sole Arbitrator or for any other reason as held by the Hon'ble Supreme Court in the case of ACC Limited vs. Global Cements Ltd.9
Which court to approach for seeking extension of time- A Judicial Approach
The term 'court' has been defined under Section 2(1)(e) of the Act. The question that arises is if the exclusivity to deal with the applications for the extension of time for passing the award under Section of 29A for matters pertaining to International Commercial Arbitrations will rest with the High courts or not.10
The doubt also circulates the issue if the civil courts would be dealing with domestic arbitrations or not. The conflict pertaining to the interpretation of the term 'court' under Section 29A of the Act was dealt with by the Delhi High court in the case of DDA v Tara Chand Sumit Construction Co.11 wherein the question arose if the petition regarding the extension of the mandate rests with the High court or the civil court of the original jurisdiction per the definition of the term 'court' in Section 2(1)(e) of the Act. It was observed that Section 29A vests the power to the court to not just extend the mandate of the arbitrator but also choose to substitute the arbitrator. Therefore, the powers for extending the mandate of an arbitrator are coupled with that power to substitute an arbitrator. Thus, in case the appointment of the tribunal has been carried out by the High court, the substitution of the arbitrator shall only be done by the High court. Similarly, in the case of International commercial arbitrations, the power rests with the Supreme court. Reliance was also placed on the judgment of Nilesh Ramanbhai Patel v Bhanubhai Ramanbhai Patel12 wherein the question arose as to if the civil court would have the power to entertain the application for extension of time under Section 29A as the Gujarat High court had been declared 'functus officio'. The High court concluded that the legislature vide the interpretation of the term 'court' under Section 29A does not vest the power with the civil court for entertaining the application for the extension of the time of the arbitrator when the appointment of the arbitrator was carried out by the High court.
A similar view was observed to be taken by the High Court of Bombay in Cabra Instalaciones Y Servicios, S.A. v Maharashtra State Electricity Distribution Company Limited13 wherein the Bombay High court observed that in case of International commercial arbitration where the Supreme court has appointed the arbitrator, the application of the extension of the time under Section 29A cannot be entertained by the High court.
Therefore, S. 29A cannot be read in isolation with S. 11 of the Act and once the appointment has been made by the High Court or the Supreme Court, it is only that Court that shall have the jurisdiction to entertain an application under S. 29A of the Act14.
Section 29A is not just liberal in its approach towards granting extension but also in consonance with the spirit of the legislature. It aims at settling the disputes expeditiously preventing the parties from taking unnecessary adjournments that restore the trust in an alternative resolution mechanism.
1. 'Impact of the COVID-19 on the time-limit for the arbitral award', https://www.scconline.com/blog/post/tag/section-29-a-of-the-arbitration-conciliation-act/; 'Purpose, Parameters and Problems of the Section 29 A', https://www.mondaq.com/india/arbitration-dispute-resolution/1168310/purpose-parameters-and-problems-of-section-29a.
3. NCC Ltd. vs. Union of India and Ors, O.M.P. (Misc.) (COMM.) 313/2018, (26.11.2018 - DELHC).
4. In re, Cognizance for Extension of Limitation, 2020 SCC OnLine SC 343.
5. 2022 SCC OnLine SC 27.
6. 2022 5SCC 112.
7. 2017 SCC OnLine Del 10801.
8. CMP Nos. 292, 290 and 291/2015, (13.06.2019 - KARHC).
9. 2012 7SCC 71.
10. 'Applications for Extension of Time for Passing the Award in India: Which Court to Entertain?', http://arbitrationblog.kluwerarbitration.com/2020/01/01/applications-for-extension-of-time-for-passing-the-award-in-india-which-court-to-entertain/.
11. 2020 SCC OnLine Del 2501.
13. 2019 SCC OnLine Bom 1437.
14. Indian Farmers Fertilizers Cooperative Ltd. v. Manish Engineering Enterprises, U/s 11 (4) No. 112 of 2004.
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