Case Note & Summary
The appellant, M/S Ajay Protec H Pvt. Ltd., entered into a works contract with respondent no. 1, and disputes arose leading to arbitration. The High Court appointed a sole arbitrator on 08.02.2019 and 15.02.2019. Pleadings were completed on 09.10.2019, triggering the 12-month period under Section 29A(1) of the Arbitration and Conciliation Act, 1996, which expired on 08.10.2020. The parties mutually extended the period by 6 months under Section 29A(3), extending the deadline to 09.04.2021. However, due to the COVID-19 pandemic, the Supreme Court in Re: Cognizance for Extension of Limitation excluded the period from 15.03.2020 to 28.02.2022 from computing limitation under Sections 23(4) and 29A of the Act. The arbitral proceedings resumed in 2022 and concluded on 05.05.2023, with the parties agreeing to seek extension of time from the court. The appellant filed an application under Section 29A(4) before the Gujarat High Court on 01.08.2023. The High Court dismissed the application on 03.11.2023, holding that the mandate terminated on 09.04.2021 and there was an unexplained delay of over 2 years and 4 months. The Supreme Court allowed the appeal, holding that Section 29A(4) permits extension even after expiry of the mandate, as clarified in Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd. The Court found sufficient cause due to the pandemic exclusion and the parties' consent, and extended the time for making the award until 31st December, 2024.
Headnote
A) Arbitration Law - Extension of Arbitral Tribunal's Mandate - Section 29A(4) and (5) of the Arbitration and Conciliation Act, 1996 - Application after expiry of mandate - The court has power to extend the mandate even after expiry of the statutory period of 12 months or extended period of 18 months, as the expression 'either prior to or after the expiry of the period so specified' is unambiguous. The termination of mandate under Section 29A(4) is conditional on non-filing of extension application and does not preclude extension after expiry. (Paras 7-10)
B) Arbitration Law - Sufficient Cause for Extension - Section 29A(5) of the Arbitration and Conciliation Act, 1996 - COVID-19 pandemic and parties' consent - The period between 15.03.2020 and 28.02.2022 excluded by Supreme Court order in Re: Cognizance for Extension of Limitation, and parties agreed to seek extension before the Arbitral Tribunal, constitute sufficient cause for extension of time for making the award. (Paras 11-12)
Issue of Consideration
Whether an application under Section 29A(4) of the Arbitration and Conciliation Act, 1996 for extension of the mandate of the Arbitral Tribunal can be filed after the expiry of the mandate, and whether sufficient cause existed for extension in the present case.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court order, and extended the time for making the arbitral award until 31st December, 2024.
Law Points
- Section 29A(4) of the Arbitration and Conciliation Act
- 1996 permits extension of arbitral tribunal's mandate even after expiry of the statutory period
- 'sufficient cause' includes pandemic-related delays and parties' agreement to seek extension
Case Details
2024 LawText (SC) (11) 223
Civil Appeal No._________/2024 (Arising out of SLP(C) No. 2272 of 2024)
Pamidighantam Sri Narasimha
Gaurav Agrawal (Senior Counsel for Appellant), Vikramjit Banerjee (ASG for Respondents)
M/S Ajay Protec H Pvt. Ltd.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Civil appeal against High Court order dismissing application under Section 29A(4) of the Arbitration and Conciliation Act, 1996 for extension of time for making arbitral award.
Remedy Sought
Appellant sought extension of the mandate of the Arbitral Tribunal under Section 29A(4) of the Act.
Filing Reason
The Arbitral Tribunal could not make the award within the statutory period due to the COVID-19 pandemic and the parties agreed to seek extension from the court.
Previous Decisions
The Gujarat High Court dismissed the application on 03.11.2023, holding that the mandate terminated on 09.04.2021 and there was an unexplained delay.
Issues
Whether an application under Section 29A(4) of the Arbitration and Conciliation Act, 1996 for extension of the Arbitral Tribunal's mandate can be entertained if filed after the expiry of the mandate?
Whether the facts and circumstances of the case warrant an extension of time for making the award?
Submissions/Arguments
Appellant argued that the period between 15.03.2020 and 28.02.2022 should be excluded as per Supreme Court order in Re: Cognizance for Extension of Limitation, and the respondent had agreed to seek extension.
Respondent argued that even after exclusion, there was a nine-month delay, and as per Rohan Builders, application must be filed before mandate expires.
Ratio Decidendi
Under Section 29A(4) of the Arbitration and Conciliation Act, 1996, the court has the power to extend the mandate of the Arbitral Tribunal even after the expiry of the statutory period, as the expression 'either prior to or after the expiry of the period so specified' is unambiguous. The termination of mandate is conditional on non-filing of extension application. Sufficient cause for extension includes pandemic-related delays and parties' consent to seek extension.
Judgment Excerpts
The wording of sub-section (4) clearly and explicitly enables a court to extend the Tribunal's mandate after expiry of the statutory and extendable period of 18 months.
This Court in Rohan Builders (supra) has held that the application for extension of time can be filed even after the expiry of the period in sub-sections (1) and (3).
Procedural History
The appellant filed an application under Section 11 of the Act before the High Court, which appointed a sole arbitrator on 08.02.2019 and 15.02.2019. The arbitral proceedings commenced, and pleadings were completed on 09.10.2019. The statutory 12-month period expired on 08.10.2020, extended by mutual consent to 09.04.2021. Due to COVID-19, the Supreme Court excluded the period from 15.03.2020 to 28.02.2022. The hearing concluded on 05.05.2023, and the parties agreed to seek extension. The appellant filed an application under Section 29A(4) on 01.08.2023 before the Gujarat High Court, which was dismissed on 03.11.2023. The appellant then filed SLP before the Supreme Court, which granted leave and allowed the appeal.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 29A(1), 29A(3), 29A(4), 29A(5), 23(4), 11
