HSA | Dispute Resolution & Arbitration Monthly Update | February 2026

DISPUTE RESOLUTION AND ARBITRATION UPDATE

C. Velusamy Vs. K Indhera

2026 SCC OnLine SC 142, Judgment dated 03.02.2026

Background facts

• The dispute arose out of contractual relationship between the parties which was governed by three agreements to sell. As the dispute arose, the appellant filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 ("the Act"). The Hon'ble High Court vide order dated 19.04.2022 appointed a sole arbitrator.
• The Sole Arbitrator issued notice on 04.05.2022 and held the first preliminary meeting on 28.05.2022. The pleadings of both parties were completed on 20.08.2022, and from this date, the statutory period of twelve months under Section 29A (1) of the Act for passing the arbitral award started running.
• Before expiry of the twelve-month period, both the parties, with mutual consent under Section 29A (3) of the Act, agreed to extend the arbitration mandate by another six months. Accordingly, the time to pass the award stood extended till 20.02.2024. During this period, arbitration proceedings continued, final arguments were completed, and the matter was reserved for award on 09.09.2023.
• The proceedings were reopened on the representation of the parties that settlement discussions are ongoing and are expected to be finalised by 15.11.2023, despite the fact being indicated that award was almost ready. The matter was then adjourned to 07.01.2024 and thereafter to 27.01.2024.
• However, the discussions did not fructify into a settlement and the arbitrator reserved the matter for award on 30.01.2024.
• Notwithstanding the reservation, the discussions between the parties continued until March 2024, when a tripartite agreement was entered into between the Appellant, the Respondent, and a third party, M/s G Square Realtors Private Limited, which agreement was, however, not placed before the arbitrator.
• The matter was adjourned to 27.04.2024 and thereafter to 04.05.2024, and the arbitrator finally passed the award on 11.05.2024, which was later stamped and issued to the parties on 25.06.2024. In the meantime, the mandate of the arbitrator had terminated on 20.02.2024.
• Being aggrieved by the award passed after expiry of the mandate, the Respondent filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 seeking to set aside the award on the ground that the mandate of the Arbitral Tribunal had already expired before passing of the award.
• The Appellant filed an application under Section 29A seeking extension of the mandate of the Arbitrator, even though the award had already been passed.
• The Hon'ble High Court, by order dated 24.01.2025, dismissed the application under Section 29A as not maintainable. Further, by order dated 14.02.2025, the Hon'ble High Court allowed the Section 34 petition filed by the Respondent and held that an award passed after expiry of the arbitration mandate is invalid and that the mandate cannot be extended after the award has already been passed.
• Aggrieved by these orders of the Hon'ble High Court, the Appellant filed the present appeal before the Hon'ble Supreme Court.

Issue(s) at hand

• Whether a Court can entertain an application under Section 29A (5) of the Arbitration and Conciliation Act, 1996 to extend the mandate of the arbitrator(s) for making the award even after an 'award' is rendered, though after the expiry of the statutory limit of eighteen-month period?

Findings of the Court

• The Hon'ble Supreme Court while relying upon their previous judgments in Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd., (2025) 10 SCC 802; Lancor Holdings Ltd v. Prem Kumar Menon, 2025 SCC OnLine SC 2319 and Jagdeep Chowgule v. Sheela Chowgule, 2026 INSC 92, explained the scope of Section 29A of the Act as follows:

- Sub-section (1) of Section 29A mandates that the award shall be made within 12 months of the completion of pleadings before the Arbitral Tribunalis. While sub-section (2) incentivises expeditious making of the Award, proviso to sub-section (4) and sub-section (8) authorises the Court to impose penalty for delay in making the award.

- Sub-section (3) enables parties, by consent, to extend the period of 12 months for making the award by a further period not exceeding 6 months.

- If the award is not made within the stipulated period of 12 months or the extended period of 6 months, the mandate of the arbitrator(s) shall terminate.

- This termination is subject to the power of the Court to extend the period.

- The 'Court' under Section 29A shall be the Civil Court of ordinary original jurisdiction in a district and includes the High Court in exercise of its original civil jurisdiction under Section 2(1)(e) and shall not be the High Court or the Supreme Court under Section 11(6) of the Act. Section 42 of the Act relating to jurisdiction for applications will also not apply to Section 11 of the Act.

- There is no statutory prescribed time limit for the Court to exercise the power under Section 29A (4) for extending the period, except for its own discretion. The Court can exercise the power before or after the expiry of the period under sub-sections 29A (1) or (3). Further, there is no prescription of an outer limit for extending the time for the conclusion of arbitral proceedings. Given this power, the Court will exercise it with circumspection, balancing the remedy with the rights of other stakeholders.

- The power of the Court to extend the time under sub-section (4) may be exercised on an application by any of the parties. Once such an application for extension of time is pending, the mandate of the arbitrator shall continue till the disposal of such application under subsection (9). The Court shall endeavour to dispose of such an application within 60 days.

- Delay in the delivery of an arbitral award, by itself, is not sufficient to set aside that award. It is only when the effect of the undue delay in the delivery of an arbitral award is explicit and adversely reflects on the findings therein, such delay and, more so, if it remains unexplained, can be construed to result in the award being in conflict with the public policy of India.

- Under Section 29A(6), while exercising the power of extension, it shall be open to the Court to substitute one or all the arbitrators. This is a discretionary power that the Court would exercise in the facts and circumstances of the case. Upon substitution, the reconstituted tribunal shall be deemed to be in continuation of the previously appointed tribunal as per Section 29A (7) and shall continue from the stage already reached and on the basis of evidence already on record. The newly appointed arbitrators shall be deemed to have received the evidence and materials.

- Vesting of the power of substitution, under Section 29A (6), is on the "Court" and this Court is the "Court" as defined in Section 2 (1)(e). The text, as well as the context for identifying the Court in Section 29A (6), as well as in Section 29A (4), is the Court in Section 2(1)(e). The expression 'Court' in other provisions must be guided by the meaning given in Section 2(1)(e)

• The Hon'ble Supreme Court has held that Section 29A of the Act does not prohibit a party from seeking extension of an arbitrator's mandate merely because an award has been passed after the expiry of the prescribed time limit. The law does not create any such absolute bar. If an award is delivered after the mandate has expired, the award is legally ineffective and cannot be enforced under Section 36 of the Act. The Court clarified that such an award does not even require a challenge under Section 34 of the Act.
• The Hon'ble Supreme Court further stated that the arbitrator's act of passing an award after the expiry of the mandate does not take away the Court's power to extend the time under Section 29A of the Act. The Court's jurisdiction exists independently and is not affected by any such action of the arbitrator. The phrase "if an award is not made" in Section 29A(4) must be understood in context. It does not mean that the Court cannot grant extension if an award has already been passed after the time limit. Instead, it simply clarifies that the Court can extend the mandate either before or after the expiry of the prescribed period.
• The Hon'ble Supreme Court observed that the purpose of Section 29A is to ensure that arbitration proceedings are completed properly and result in a binding award in a time bound manner. The provision allows courts to extend time even after expiry, to keep proceedings alive while an extension application is pending, and to allow the same tribunal to continue once time is extended. These features show that Parliament intended to protect and complete arbitral proceedings rather than terminate them on technical grounds.
• The Hon'ble Supreme Court also rejected the concern that allowing extension even after an award has been passed would lead to delay or indiscipline. Extension of time is not automatic. The Court must carefully examine the facts of each case before granting it. Section 29A of the Act gives courts several powers to maintain discipline and efficiency, including reducing the arbitrator's fees if delay is their fault, imposing conditions while granting extension, substituting arbitrators where necessary, and imposing costs on parties if required.
• The Hon'ble Supreme Court emphasized that laws providing dispute resolution should be interpreted in a way that makes remedies accessible, affordable, quick, and coherent. Therefore, Section 29A must be read in a practical and purposive manner.
• In conclusion, the Court held that an application for extension of the arbitrator's mandate under Section 29A (5) is maintainable even after the time limit has expired and even if an award has been delivered after such expiry. If sufficient cause is shown and the Court grants extension, the arbitral tribunal can continue the proceedings from where they had stopped and complete them within the extended period.

HSA Viewpoint

The Judgment of the Hon'ble Supreme Court is quite significant as it brings clarity on the issue of expiry of arbitral mandate and post-expiry extension under Section 29A and Section 34 of the Arbitration and Conciliation Act, 1996. Neither Section 29A nor Section 34 specifically mentions what happens if an award is passed after the mandate expires or whether extension can be granted after the award. This judgment fills that gap and gives practical clarity to arbitration law. The Hon'ble Court has clarified that only the Court has the power to extend the mandate and not the arbitrator himself, which helps maintain procedural discipline while still supporting the arbitration process. This will likely reduce technical challenges raised only on delay grounds and shift focus towards deciding disputes on merits. It also discourages parties from using delay as a strategy to invalidate awards. At the same time, this judgment also has a possible downside. Arbitration is meant to be a fast dispute resolution mechanism, but allowing post-expiry extensions through Court may increase time, cost, and court involvement. While the ruling strengthens India's pro-arbitration approach and supports enforceability of awards, it may also raise concerns about delay and increased judicial intervention, which goes against the basic objective of speedy arbitration.

To view the full article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.