Introduction
The Arbitration Act of 1940 (“1940 Act”) originally required arbitrators to issue their awards within four months of the reference or after being called upon by written notice from any party involved. While Section 28 of the 1940 Act allowed for extensions, it was heavily criticised by the 76th[Pg. 51 ¶8.3] and the 176th Law Commission reports [Pg. 125 ¶2.21.4] for failing to provide clear timelines. This absence of definitive time limits contradicted one of arbitration’s fundamental principles—expeditious resolution.
Despite recognising these shortcomings, the Arbitration and Conciliation Act of 1996 (“1996 Act”) did not effectively address the need for definitive time limits for passing an award until the 2015 Amendment. The lack of clear deadlines in the 1996 Act undermined the efficiency of the arbitration process and conflicted with its core objective of providing a speedy resolution.
This gap was finally addressed in 2015 with the introduction of Section 29A through the Arbitration and Conciliation (Amendment) Act 2015. Section 29A introduced strict timelines, requiring tribunals to issue awards within 12 months of the date of reference, with an option to extend this by a maximum of six months. The Arbitration & Conciliation (Amendment) Act of 2019 further amended Section 29A(1), stating that the 12-month period begins after the completion of pleadings under Section 23(4), but this provision only applies to domestic arbitration. Additionally, Section 29A(3) allows for a six-month extension by the tribunal itself – with the consent of the parties, while Section 29A(4) grants the ‘court’ authority to extend the tribunal’s mandate beyond 18 months for a sufficient cause and with the possibility of imposing specific terms and conditions under sub-section (5).
However, some interpretative gaps remained unresolved. The question of which court holds jurisdiction for applications under Section 29A [A.] and whether an application can be filed for extension of time after the expiry of period for making an award [B.] will be addressed in this blog by analysing two recent Supreme Court judgements of Chief Engineer (NH) PWD v. M/s BSC & C & C JV and, Rohan Builders India Pvt. Ltd. v. Berger Paints India Ltd., which resolve these issues, respectively.
A. The Jurisdiction Debate: Which Court to Approach for Extension of Timeline?
The question of which court, under Section 2(1)(e) of the 1996 Act —whether the principal Civil Court or the High Court with ordinary original civil jurisdiction—has jurisdiction to hear Section 29A(4) applications had led to divergent views among the High Courts. In KIPL Vistacore Infra Projects JV Municipal Corporation of the City of Ichalkarnji, the Bombay High Court emphasised the flexibility embedded in Section 2(1)(e), which begins with the phrase, “In this Part, unless the context otherwise requires.” The court highlighted that the term ‘court’ must be interpreted contextually. Specifically, in cases where the High Court or Supreme Court appoints an arbitrator (under Section 11), it would be inconsistent to let a lower Principal Civil Court have the authority to extend the arbitrator’s mandate under Section 29A. As a result, the Bombay High Court held that it had the appropriate jurisdiction to hear such applications [¶19-20].
Similarly, in Dr. V.V. Subbarao v. Dr. Appa Rao Mukkamala, the Andhra Pradesh High Court recognised the jurisdictional conflict that could arise if lower courts could substitute arbitrators appointed by the High Court or Supreme Court. The court clarified that when an arbitrator is appointed by way of a Section 11 application, the High Court or Supreme Court retains the authority to hear subsequent Section 29A applications. However, if no court intervention has occurred in the appointment process, the appropriate forum for such applications would be the Principal Civil Court of original jurisdiction [¶19-22].
The Supreme Court in Chief Engineer (NH) PWD v. M/s BSC & C & C JV conclusively established that jurisdiction for Section 29A(4) applications lies solely with the courts as defined in Section 2(1)(e). Although the Apex Court dismissed the Special Leave Petition (SLP) without granting leave, it reached the same conclusion as the High Court by contextually interpreting the provision. The Court concurred with the High Court’s interpretation that the Principal Civil Court of original jurisdiction and the High Court, when it exercises its ordinary original civil jurisdiction, have the authority to adjudicate such applications [¶ 2, 3].
Since the court dismissed the special leave petition without granting leave, the doctrine of merger does not apply. Nevertheless, the High Court’s reasoning aligns with that of other High Courts, such as the Bombay High Court in KIPL Vistacore, and serves as a solid legal basis for the conclusion reached by the Supreme Court. Thus, although the Supreme Court’s order did not delve into the analysis of law similar to that of the High Court, analyzing the High Court judgment offers crucial insights into the interpretation of jurisdiction under Section 29A.
The High Court emphasised the contextual interpretation of “court” to understand the legislative intent in confining authority to the courts explicitly mentioned in Section 2(1)(e) to prevent jurisdictional overlap and confusion. [¶ 12, 18]
Furthermore, the High Court stated that it would be inconsistent and impractical to allow lower courts to handle subsequent applications for extensions or substitutions in cases where arbitrators are appointed by higher courts—such as the High Court or Supreme Court under Section 11. This would create conflicts between judicial authorities. Therefore, when a higher court appoints arbitrators, it retains exclusive jurisdiction over Section 29A applications, ensuring that decisions regarding arbitration timelines and tribunal composition remain within the same judicial framework, thereby preserving consistency. [¶ 12, 17]
Additionally, the court held that jurisdiction concerning Section 29A(6) lies with the court responsible for extending the mandate under Section 29A(4), maintaining a single point of judicial authority to substitute arbitrators if necessary. [¶ 15]
B. The Timeline Debate: Till When Can One Approach the Court?
The second issue arising out of Section 29A is whether an application can be filed for an extension of time after the expiry of the period of 18 months for making an award. This question has led to diverging views among the High Courts.
The High Courts of Delhi, Bombay, Kerala, Jammu Kashmir and Madras allowed applications to be filed after the initial 12 months or, if extended by the parties, after the expiry of 18 months. These courts have contextually interpreted the term “terminate” in Section 29A, emphasising that allowing for an application for extension is in line with the legislative intent of the drafters. On the contrary, the High Courts of Patna and Calcutta have focused on the literal and isolated interpretation of the term “terminate” and held that no application can be filed after the expiry of the time period because by then, the tribunal would stand terminated and become incapable of performing its functions.
The Supreme Court, in Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Limited, settled the debate by overturning the Calcutta High Court’s interpretation on appeal. The Court disagreed with the literal and isolated interpretation of “terminate” in the provision. The High Court had further reasoned that the use of the expression “terminate” instead of “suspend” was suggested by the 176th Law Commission and is indicative of the legislative intent to altogether terminate the mandate upon the expiry of the mandated time period of eighteen months – the Supreme Court stated that this reasoning is “fallacious and unacceptable” and does not align with the purpose of arbitration.[¶ 9]
First, the Court reasoned that using the word “suspend” would lead to a legal conundrum. If the provision had used the term “suspend” and neither party filed for an extension application, the proceedings would remain suspended indefinitely. Therefore, “terminating” avoids any unwarranted legal ramifications while affirming the principle of party autonomy. [¶ 10]
Second, regarding the High Court’s strict interpretation of “terminate” to indicate the complete Termination of the tribunal’s mandate, the Supreme Court emphasised that the true intention of the term should be derived from the broader context of the provision. It is necessary to consider that the word is not followed by a period but with a connecting word, “unless”, which is further followed by the second part of the provision granting the Courts the power to extend the time for the grant of award. Therefore, Termination as per Section 29A must not be considered absolutistic; the proceedings have not reached a complete legal end, and an application for an extension can be filed even after such Termination. [¶ 11,12]
Third, the Supreme Court held that this reasoning resonates with the legislative intent of drafters. If the drafters intended against an application for extension, the provision would have stated “the Court may extend the period only if the application is filed before the expiry of the mandate of the arbitrator, not after.” The Court reasoned that the inclusion of “after the expiry of the period” reflects the legislative intent to maintain arbitration as a litigant-centric process. [¶ 13, 14]
Additionally, the Court addressed concerns raised by the Calcutta High Court regarding “(whether) an interpretation allowing an extension application post the expiry period would encourage rogue litigants and render the timeline for making the award inconsequential.” First, the Supreme Court held that the power of a Court to grant an extension is limited to cases where “sufficient cause” can be established for the same. The Court further held that it is not a “mechanical” process where an extension is merely granted on the filing of an application and emphasised that “the judicial discretion of the court in terms of the enactment acts as a deterrent against any party abusing the process of law or espousing a frivolous or vexatious application.” Second, extensions can be conditional to ensure that the timeline for making the award is not compromised. Third, the Hon’ble Court emphasised that this interpretation is in line with the fundamental principles of expeditious resolution and minimal judicial intervention, a position also supported by the 176th Law Commission Report. [¶ 14,15]
Therefore, to provide a “meaningful life to an enactment or rule and avoid cadaveric consequences that result in unworkable or impracticable scenarios”, the Supreme Court held an application can be filed for an extension even after the 12 or 18-month period expires. However, the court must ensure that the principle of ‘sufficient cause’ guides its discretion while entertaining such applications.
Conclusion
The Supreme Court, through its recent rulings, has clarified two important questions regarding the interpretation of Section 29A. First, it resolved the confusion surrounding jurisdiction by confirming that the applications under sub-section (4) and (6) should be filed with the court as defined under Section 2(1)(e) of the Act, which refers to either the Principal Civil Court of original jurisdiction or the High Court with original jurisdiction.
Second, regarding the time period for filing an application to extend the tribunal’s mandate, the Court has clarified that such an application can indeed be filed after the expiry of the stipulated time period of 18 months. Importantly, the Court emphasised that while the principle of expeditious resolution is paramount, judicial discretion plays a key role in preventing abuse of the process.
However, two issues remain unanswered. First, should there be a limitation period after the expiry of 18 months for filing such applications? The Supreme Court, refraining from providing a specific limitation period, stated that it “will add words to widen the scope of legislation and amount to modification or rewriting of the statute.” [¶ 13] Therefore, the Court left the determination of such a limitation to legislative action, reinforcing that the courts will continue to assess each application based on the facts of the case.
Second, the Supreme Court has not explicitly clarified whether a High Court that has already dealt with a Section 11 application retains jurisdiction over subsequent applications for extension or substitution. However, the High Courts in Chief Engineer and Dr. V.V. Subbarao have reasoned that it would be inconsistent and impractical for lower courts to handle such applications after the High Court’s involvement – emphasising that the High Court should retain jurisdiction to ensure consistency. The Supreme Court must adopt this approach to avoid confusion in interpreting Section 29A.
These rulings address prior ambiguities and reinforce the principles of minimal judicial intervention and party autonomy, which are cornerstones of India’s arbitration framework. It is now the legislature’s responsibility to ensure that the legal framework aligns with the principles of party autonomy and efficiency. This includes introducing necessary provisions, such as the prescription of a limitation period, to safeguard the timelines established by the Act and prevent any potential dilution of its effectiveness.
Author(s)
Tahir Syed
Student at GNLU, Gandhinagar
Aryan Soni
Student at GNLU, Gandhinagar