Case Note & Summary
The petitioners, Scape Marketing Private Limited and others, filed a writ petition under Articles 226 and 227 of the Constitution of India challenging an order dated 10.09.2024 passed by the LXXXVI Additional City Civil Judge (Commercial Court - CCH No. 87), Bengaluru, in Comm. A.A. No. 184/2023. The impugned order allowed an application filed by the first respondent, Anheuser Busch InBev India Limited, under Section 29-A(5) of the Arbitration and Conciliation Act, 1996, seeking extension of the mandate of the arbitral tribunal. The petitioners, who had not consented to the extension under Section 29-A(3) of the Act, resisted the application. The Commercial Court granted the extension on the grounds of sufficient cause, namely the demise of the then presiding arbitrator and the insolvency proceedings initiated against the second respondent (the borrower). The High Court, after considering the submissions, held that the Trial Court had correctly exercised its discretion and that the reasons cited constituted sufficient cause for extension of the arbitral mandate. The High Court found no error or perversity in the impugned order and dismissed the writ petition, thereby upholding the extension of the arbitral mandate.
Headnote
A) Arbitration Law - Extension of Arbitral Mandate - Section 29-A(5) of the Arbitration and Conciliation Act, 1996 - Sufficient Cause - The Commercial Court allowed an application under Section 29-A(5) for extension of the arbitral mandate, citing the demise of the presiding arbitrator and insolvency proceedings against the borrower as sufficient cause. The High Court upheld the order, holding that the Trial Court had correctly exercised its discretion and that the reasons constituted sufficient cause for extension. (Paras 2-3)
B) Arbitration Law - Consent for Extension - Section 29-A(3) of the Arbitration and Conciliation Act, 1996 - The petitioners had not tendered their consent for extension under Section 29-A(3). However, the Court held that the absence of consent does not bar the court from granting extension under Section 29-A(5) if sufficient cause is shown. (Para 2)
C) Constitutional Law - Writ Jurisdiction - Articles 226 and 227 of the Constitution of India - The High Court, in exercise of its writ jurisdiction, declined to interfere with the Commercial Court's order, finding no error or perversity in the exercise of discretion. The petition was dismissed. (Para 3)
Issue of Consideration
Whether the Commercial Court was justified in extending the mandate of the arbitral tribunal under Section 29-A(5) of the Arbitration and Conciliation Act, 1996, on the grounds of the demise of the presiding arbitrator and insolvency proceedings against the borrower, despite the petitioners not having consented to the extension under Section 29-A(3).
Final Decision
The High Court dismissed the writ petition, upholding the order of the Commercial Court dated 10.09.2024 in Comm. A.A. No. 184/2023, which allowed the application under Section 29-A(5) of the Arbitration and Conciliation Act, 1996 for extension of the arbitral mandate.
Law Points
- Section 29-A(5) of the Arbitration and Conciliation Act
- 1996
- extension of arbitral mandate
- sufficient cause
- demise of arbitrator
- insolvency proceedings
- consent under Section 29-A(3)
- writ jurisdiction under Articles 226 and 227 of the Constitution of India
Case Details
2025 LawText (KAR) (02) 16
WP No. 29349 of 2024 (GM-RES)
K.N.Phanindra (Senior Counsel for A. Mahesh Chowdhary, Advocate) for petitioners; Pramod Nair (Advocate for Sri. Prashanth V.G., Advocate for Caveat Respondent No.1)
Scape Marketing Private Limited, Sathish Babu Sana, S V Bapuji, S Guruju
Anheuser Busch InBev India Limited, East Godavari Breweries Private Limited
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution of India challenging an order of the Commercial Court allowing an application under Section 29-A(5) of the Arbitration and Conciliation Act, 1996 for extension of the arbitral mandate.
Remedy Sought
Petitioners sought to set aside the order dated 10.09.2024 in Comm. A.A. No. 184/2023 and dismiss the application for extension of the arbitral mandate.
Filing Reason
Petitioners challenged the Commercial Court's order granting extension of the arbitral mandate on grounds that they had not consented to the extension under Section 29-A(3) and that the reasons cited were insufficient.
Previous Decisions
The Commercial Court (LXXXVI Addl. City Civil Judge, Commercial Court - CCH 87, Bengaluru) allowed the application under Section 29-A(5) vide order dated 10.09.2024 in Comm. A.A. No. 184/2023.
Issues
Whether the Commercial Court was justified in extending the arbitral mandate under Section 29-A(5) of the Arbitration and Conciliation Act, 1996 on grounds of demise of the presiding arbitrator and insolvency proceedings against the borrower.
Whether the absence of consent from the petitioners under Section 29-A(3) precludes the court from granting extension under Section 29-A(5).
Submissions/Arguments
Petitioners argued that they had not consented to the extension of the arbitral mandate under Section 29-A(3) and that the reasons cited by the respondent were not sufficient cause for extension.
Respondent No.1 contended that the demise of the presiding arbitrator and the insolvency proceedings against respondent No.2 constituted sufficient cause for extension of the mandate.
Ratio Decidendi
The Commercial Court correctly exercised its discretion in extending the arbitral mandate under Section 29-A(5) of the Arbitration and Conciliation Act, 1996, as the demise of the presiding arbitrator and the insolvency proceedings against the borrower constituted sufficient cause. The absence of consent under Section 29-A(3) does not bar the court from granting extension if sufficient cause is shown.
Judgment Excerpts
In short, the petitioners herein who had not tendered their consent for extension of the mandate of the arbitral tribunal, under Section 29-A(3) of the Act, had unsuccessfully resisted the respondent No.1’s application made under Section 29-A(5) of the Act, wherein the Trial Court has granted an extension of the arbitral mandate on grounds of sufficient cause of the demise of the then presiding arbitrator, and on account of the insolvency proceedings initiated against respondent No. 2 herein (who was the respondent No.1 in the Comm. A.A. 184/2023 and the borrower).
The Trial Court has correctly exercised its discretion in extending the mandate of the arbitral tribunal under Section 29-A(5) of the Act, and the reasons assigned in the impugned order constitute sufficient cause for extension of the mandate of the arbitral tribunal.
Procedural History
The first respondent filed an application under Section 29-A(5) of the Arbitration and Conciliation Act, 1996 in Comm. A.A. No. 184/2023 before the LXXXVI Addl. City Civil Judge (Commercial Court - CCH 87), Bengaluru, seeking extension of the arbitral mandate. The petitioners resisted the application. The Commercial Court allowed the application vide order dated 10.09.2024. Aggrieved, the petitioners filed the present writ petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka, which dismissed the petition on 06.02.2025.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 29-A(3), Section 29-A(5)
- Constitution of India: Article 226, Article 227
