Too late, Still valid? Supreme Court on arbitral awards beyond mandate

Introduction

The Supreme Court of India (“Court”) recently passed a significant ruling in C. Velusamy v. K. Indera (2026) wherein the court settled a long-contested question regarding the power of the court to extend the mandate of an arbitral tribunal under Section 29A of The Arbitration and Conciliation Act,1996 (“Act”), where the award has been rendered beyond the expiry of statutory time limit.

This judgment takes the law laid down in Rohan Builders (Indian) Pvt. Ltd. V. Berger paints India Ltd. (2024) one step further. While Rohan Builders allowed for the extension of the statutory limit beyond 18 months upon an application by at least one of the parties, Velusamy has further clarified that under Section 29A, an award passed after the expiry of the 18-month statutory time limit but without an application for extension cannot be struck down or annulled on this ground alone.

This blog traces the legislative evolution of section 29A, outlines the scope of judicial powers thereunder, evaluates the approach adopted by the Supreme Court in this judgement and addresses concerns that arise therein.

Evolution of 29A

The Arbitration Act of 1940 marked India’s first comprehensive enactment addressing statutory timelines and empowered courts to extend timelines for making arbitral award under section 28 but this unchecked flexibility led to the rampart extensions in many instances. The 1996 Act omitted specific timelines to prioritize party autonomy and limited judicial intervention. But, this omission led to delays in the arbitral proceedings. Accordingly, the 176^th Law Commission Report of India [pg. 266] flagged this gap causing delay and pendency for years, defeating the very purpose of arbitration as a quick dispute resolution mechanism. Thereafter, under the 2015 Amendment Act, Section 29A was introduced mandating a twelve months period for the tribunal to render its award from the reference to arbitration. Finally, the 2019 Amendment, shifted the start of the twelve-month period to start after the completion of pleadings instead of the date of reference, while also allowing for an extendable period of six with the consent of parties.

However, after all such amendments, two crucial questions have arisen – first, whether an application for extension can be allowed beyond the statutory limit of 18 months, and second, regarding the validity of an award rendered post the statutory mandate which is followed by an ex post facto application of extension. While the former had been answered by the Supreme Court in Rohan Builders, the latter has been answered now in Velusamy.

Current Case

In this case the arbitrator passed an award three months after the expiry of the tribunal’s statutory mandate of 18 months. This was however challenged before the Madras High Court under Section 34 of the Act, contending award to be nullified since it was passed after the Termination of the arbitral mandate and no application of extension was made by either of the parties before the award was rendered. Thereafter, the Respondents therein filed an application under section 29A seeking ex post facto extension of the mandate.

The Madras High Court allowed the Section 34 petition and ruled the ex post facto extension petition non-maintainable. The decision was appealed in the Supreme Court seeking answer to a core question “Whether a Court can entertain an application under Section 29A(5) of the Arbitration and Conciliation Act, 1996 to extend the mandate of the arbitrator(s) for making the award even after an ‘award’ is rendered, though after the expiry of the statutory limit of eighteen-month period?”

The Supreme Court’s Decision

The Court overturned the ruling of the Madras High Court holding that the ex post facto application under 29A (5) remains maintainable, despite the passing of the award after expiry of the tribunal’s mandate. Section 29A doesn’t bar an extension application merely on ground that award is already passed. The phrase “if an award is not made” in section 29A (4) is to be interpreted contextually, empowering the court to extend the mandate of the tribunal, before or even after expiry of its statutory mandate [¶¶ 13(VI), 16]. However, the Court balanced this power by holding that the maintainability of such an application does not take away the fact that the award was made beyond the mandate of the Arbitral Tribunal, hence, such an award remains non est in law (unless an ex post facto extension application is granted) and unenforceable under Section 36 of the Act, as the arbitrator lacked jurisdiction at the time it was made [¶ 14].

The Court further clarified that vesting of power with the Courts under Section 29A to extend the mandate of Arbitral Tribunal ex post facto, is not to be construed as an automatic entitlement of extension of time. Thereafter, it is the duty of the court to scrutinise such applications in light of the facts and circumstances presented before it and exercise its discretion to ensure efficient conduct of the arbitral tribunal. The Court emphasised that section 29A of the act “enables the court to adopt distinct measures to ensure dynamic and efficient conduct of arbitral proceedings with integrity and expedition”. In addition to the above, the Court also specified the entire range of powers which can be exercised a court under section 29A: a judge can extend the time limit before or after the expiration of the statutory period under Section 29A(4); lower the arbitrators fees in those cases when delays may be attributed to the arbitrator under the proviso of Section 29A(4); provide extensions when sufficient cause is provided; and, replace an arbitrator or arbitrators in the cases when circumstances justify under section 29A(6) [¶20].

This clarification and interpretation of Section 29A by the Court provides fundamental clarity with regard to the extensive remedial tools that courts can use in addressing mandate related issues in the arbitral process.

 Analysis

Re: Maintainability of ex post facto extension application

The decision made by the Court is in line with the doctrinal principles under Section 29A for making sure that arbitral proceedings are completed timely and do not continue in an unending manner. The effect of treating a post-expiry award as an automatic nullity such as that adopted by the Madras High Court is exactly which the Law Commission in its 176th Report had sought to prevent, since it will result in the frustration of final proceedings and force parties to recommence the proceedings.

The Supreme Court looked beyond the letter of the law by adopting a purposive interpretation in line with the intent of the legislature. If parliament wanted to exhaust the proceedings/award post mandate, it would have explicitly mentioned it therein. Therefore, the nullity approach of the Madras High Court used in this case and earlier in Suryadev Alloys and Power Private Limited v. M/s. Shri Govindaraja Textiles Private Limited (2019) is now overruled.

This approach of the Supreme Court is in line with the international jurisprudence. Section 50 of the English Arbitration Act 1996 empowers courts to extend time even when it has already lapsed. Article 31(2) of the International Chamber of Commerce rules also permits retroactive extensions that are granted even after an award has been issued after the due date.

The only concern that can be raised at this stage is that there exists a risk that the compliance by arbitrators to the statutory deadlines as prescribed by the Act may stand to be diluted. However, it is to be noted that the Court, in line with its previous judgement in Rohan Builders, has not allowed for an automatic and mechanical approval of an extension application. The applicant will have to fulfil their burden of establishing sufficient cause of delay. Only after such establishment of sufficient cause, an extension, whether pre or post award will be granted. Therefore, there already exists a mechanism within Section 29A to prevent the dilution of its statutory purpose.

Re: Challenge to an award if ex post facto extension is not granted

The present judgement does provide clarity regarding the maintainability of an ex post facto extension application. However, the recourse available to a counterparty in cases where an extension application is denied remains ambiguous.

The Court holds that an award passed beyond mandate is without jurisdiction and non est in law [¶ 14]. This in effect means that such an award is an invalid one (unless extension granted) and is not amenable for a challenge of setting aside under Section 34 of the Act. As a result, the judgement recommends that objections under Section 36, rather than Section 34 is the more appropriate recourse against such an (invalid) award [¶ 14]. This raises two ambiguities.

First, the Court has taken two positions that sit uneasily with each other. The Court has held that a delayed award is non est in law and must be refused enforcement. At the same time, drawing from M/S Lancor Holdings v. Prem Kumar Menon (2025), it holds that delay alone cannot be a ground to set aside an award [¶¶ 9.1, 13(VIII)]. This dual reasoning adopted by the Court is mutually exclusive and needs clarification.

Second, regarding the refusal to enforcement under Section 36,  a plain reading of the provision indicates that refusal to enforce an award is limited to either awards that have been set aside as per Section 34, or to matters wherein a Section 34 is pending and a stay has been granted for its enforcement. Therefore, even to refuse enforcement under Section 36, a challenge under Section 34 is necessary. This creates a practical uncertainty: if a party cannot challenge an award under Section 34, how can it challenge its enforcement under Section 36? or does the jurisdictional defect of the invalid award obligate the enforcing court to take cognizance of it suo motu and refuse enforcement? The answer carries significant consequences, in the former, a party may find itself without effective remedy or recourse to challenge an invalid award; in the latter, it raises deeper questions about the extent to which enforcement courts may look behind an award and examine its jurisdictional foundations. There needs to be clarity on this.

Conclusion

The decision of the Supreme Court in Velusamy continues the trend established in Rohan Builders. The decision correctly reflects the legislative history and intent behind the 2015 Amendment, continuation and not nullification. However, the true measure of the value of this decision will be reflected in how rigorously courts apply the extension process. The flexibility that has been granted in Velusamy should not be allowed to water down the binding effect of Section 29A’s temporal requirements, nor should it be allowed to water down the fundamental principles of autonomy, which are central to arbitration as a form of dispute resolution.

Parallelly, there is a need for clarity regarding the two ambiguities that arise from the judgement. First, regarding the effect of delay on award – whether delay is a curable defect, in line with the judgement in Lancor Holdings, or is a delay beyond the statutory mandate without a retroactive grant of extension suffice to render an award invalid and unenforceable. In latter case, the second ambiguity arises: what is the appropriate provision or recourse against an award where an extension application is not granted ex post facto. The current judgement dismisses Section 34 as the appropriate recourse, and redirects towards Section 36. However, a Section 34 challenge is a pre-requisite to refuse enforcement under Section 36. This circular reasoning will leave aggrieved parties in a limbo of uncertainty and therefore, there needs to be greater clarity on the effect of delay on the validity of an award and the recourse available if the ex post facto extension application is denied.

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