Supreme Court Clarifies Time Limit for Arbitral Awards. Extension of Arbitral Timeframe Possible Even After Expiry.

Case Note & Summary

The Supreme Court examined the provisions of Section 29A of the Arbitration and Conciliation Act, 1996. The core issue was whether an application for an extension of time for making an arbitral award can be filed after the expiry of the mandate of the arbitral tribunal. The Court overturned the Calcutta High Court’s decision, which held that such an application must be filed before the mandate expired. The Supreme Court ruled that courts have the discretion to extend the time period even after its expiry if there is sufficient cause, thereby aligning with the decisions of several other High Courts, including Delhi, Bombay, and Madras.

1. Parties Involved: Appellant: Rohan Builders (India) Pvt. Ltd. Respondent: Berger Paints India Limited 2. Legal Question:

Can a party file an application for an extension of time under Section 29A of the Arbitration and Conciliation Act, 1996, after the expiry of the arbitral tribunal’s mandate?

3. Lower Court's Decision:

The Calcutta High Court had ruled that the application for extension must be filed before the expiry of the arbitral mandate, denying the possibility of post-expiry applications.

4. Supreme Court's Ruling:

The Supreme Court overruled the Calcutta High Court, holding that such applications are maintainable even after the expiry of the arbitral mandate.

5. Key Legal Provisions Discussed: Section 29A(1): Time limit of twelve months for domestic arbitral awards. Section 29A(3): Parties can extend the time for up to six additional months by mutual consent. Section 29A(4): The mandate of the tribunal terminates unless extended by a court. Section 29A(5): Application for extension can be filed for sufficient cause, either before or after the expiry of the mandate. Acts and Sections Discussed: Arbitration and Conciliation Act, 1996 Section 29A(1), (3), (4), (5), (6), and (7): Governing the time limits for making an arbitral award and the extension mechanisms. Ratio Decidendi:

The Supreme Court emphasized that party autonomy is central to arbitration, and a rigid interpretation of Section 29A would hinder its objective. The term "terminate" in Section 29A(4) does not imply that the tribunal’s mandate ends irreversibly. Rather, courts retain the power to extend the time for making an award even after the period has expired. The decision is aimed at promoting the timely completion of arbitration while balancing the flexibility required to address delays.

Subject:

Arbitration, Extension of Time Limits

Section 29A, Tribunal Mandate