S.29A of A&C Act, 1996 and The Controversy in its Application

 

S.29A of A&C Act, 1996 and The Controversy in its Application

Introduction

Arbitration and Conciliation Act, 1996 ("A&C Act, 1996") had repealed the Arbitration Act, 1940 through Section 85 of the A&C Act, 1996. Two other Acts were also repealed through S.85 (1) of A&C Act, 1996.

According to Sec. 2 (7) of the A&C Act, 1996, an arbitral award made under Part 1 of the A&C Act, 1996 shall be considered as a domestic award.

S.29A of the A&C Act, 1996 is titled as "Time limit for making awards". Time limit given in S.29A (1) is 12 months from the date of completion of pleadings in respect of matters other than international commercial arbitration. S.29A (2) provides for additional fees to be paid to arbitral tribunal, if award is made within 6 months. S.29A (3) requires consent of parties to extend the period. 

Now, S.29A (4) requires when the mandate of arbitrator is terminated and the role of the Court in this. The application for extension is made under S.29A (5).  S.29A(9) also prescribes a time period of 60 days within which Court has to dispose of applications under S.29A(5) of A&C Act, 1996.

The Controversy 

The point of controversy here is in what circumstances, extension under various sub sections of S.29A of A&C Act, 1996 can be granted ? 

In the case of ATC Telecom Infrastructure (P) Ltd. v. BSNL [2023] GCtR 2424 Delhi) it was held that a petition under Section 29A of the A&C Act, 1996 can be filed even after the mandate has expired.

Although one can have difference of opinion with the view laid down in above decision, but the basis of said decision needs to be seen. 

It was explained in ATC Telecom Infrastructure (P) Ltd. v. BSNL [2023] GCtR 2424 Delhi) that the purpose of Section 29A of the A&C Act, 1996 is to prescribe and regulate the timelines for completion of the arbitral proceedings; however, a perusal of Section 29A of the A&C Act, 1996 itself makes it clear that it does not contemplate any inflexible outer deadline for completion of arbitral proceedings, and affords flexibility to the contracting parties, and also to the Court for extension of the time period in appropriate cases. 

"Purport of Section 29A of the A&C Act, 1996 was clearly not to tie the hands of the parties or the court, and prevent extension of time even where warranted, simply because the petition under Section 29A(4) of the A&C Act came to be filed a few days after expiration of the deadline contemplated under Section 29A(1) or Section 29A(3) of the A&C Act. Had it been intended by the legislature to provide for a blanket prohibition on extension of time after the expiration of the period contemplated under Section 29A(1) or Section 29A(3) of the A&C Act (unless a petition under Section 29A(4) of the A&C Act was filed prior to expiry of the said period), nothing would have been easier than to say so."

The Bench remarked that "the statutory provision, as actually engrafted, specifically provides that “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”. 

The legal position was clarified with the observations that "under Section 29A(4) of the A&C Act, 1996 the termination of the mandate of the arbitrator(s) is subject to the decision of the Court which may be “either prior or after the expiry” of the specified period. The Court would take a suitable decision upon a petition under Section 29A(4) of the A&C Act being filed. Such a petition can be filed either before expiry of the period referred to under Section 29A(1) or Section 29A(3) of the A&C Act, 1996 or even thereafter. When the Court has been specifically empowered to grant the requisite extension even after expiry of the specified period, it would not be apposite to read a proscription in the statutory provision to the effect that a petition under Section 29A(4) of the A&C Act, 1996 [seeking extension of time] must be filed before expiry of the specified period and not thereafter. Such a proscription simply does not exist in the statute. On the contrary, as already noticed, the court has been empowered to grant an extension even after expiry of the specified period."

Conclusion

While ATC Telecom Infrastructure (P) Ltd. v. BSNL [2023] GCtR 2424 Delhi) seeks to attempt to clarify the position on S.29A of A&C Act, 1996, but its application in various other situations in proceedings under A&C Act, 1996 has been left untouched.

It needs a clear position from the Hon'ble Supreme Court to arrive at a definitive solution to S.29A.