Delhi High Court Affirms Court's Authority to Extend Arbitral Tribunal's Mandate Beyond Specified Time Limit
Delhi High Court Affirms Court's Authority to Extend Arbitral Tribunal's Mandate Beyond Specified Time Limit
The Delhi High Court has affirmed that the court, in exercising its authority under Section 29A of the Arbitration and Conciliation Act (A&C Act), has the power to extend the tenure of an arbitrator even if the request for an extension is not made within the specified time frame for delivering the award.
The bench of Justice Sachin Datta asserted that the intent of Section 29A of the A&C Act is not to restrict the parties or the court and prevent extensions when deemed necessary, simply due to the fact that the petition under Section 29A(4) of the A&C Act was filed a few days after the expiry of the deadline stipulated under Section 29A(1) or Section 29A(3) of the A&C Act.
The Court was adjudicating upon two petitions filed under Section 29A of the A&C Act, requesting extensions to enable the arbitral tribunal to conclude the arbitral proceedings and render the award.
In one reference, the application was submitted within the timeframe stipulated in Section 29A, whereas in the other reference, the application was filed a few days after the designated timeframe had lapsed.
The respondent raised an objection regarding the viability of the application, which was submitted after the prescribed time limit, arguing that the arbitrator's authority ceased to exist upon the expiry of the specified time frame and, therefore, it was not open to review. The respondent asserted that it was the responsibility of the petitioner/applicant to submit this application while the time period was still in effect.
The Court noted that the arbitral proceedings are undeniably in an advanced stage, and the arbitrator has demonstrated promptness and efficiency in overseeing the arbitration process.
Additionally, it affirmed that Section 29A does not envision a rigid external cutoff for concluding arbitral proceedings. Instead, it provides flexibility to the contracting parties and allows the Court to extend the time period in suitable circumstances.
The Court diverged from the opinion expressed by the Calcutta High Court in the Rohan Builders case, which held that the arbitrator's mandate ceases upon the expiration of the time limits specified under Section 29A and cannot be revisited by filing a subsequent application. Therefore, it is incumbent upon the parties to submit their requests within the mandate's validity.
The Court determined that the language "the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period" unmistakably conveys that the court possesses the authority to prolong the arbitrator's mandate even after the specified period has lapsed. It emphasized that there is no obligation for a party to submit an application while the specified period is still ongoing.
It observed that adopting the perspective that an application must be submitted solely within the specified period not only contradicts the explicit language of the Section but also diminishes the effectiveness of the arbitral process.
The Delhi High Court thus dismissed the objection raised by the respondent against the admissibility of the application seeking an extension of time. This application was filed a few days after the expiry of the timeframe specified in Section 29A for concluding arbitral proceedings and issuing the corresponding award.
