Section 29A of the Arbitration and Conciliation (Amendment) Act, 2015 imposes a mandatory twelve-month time limit for arbitral tribunals in India to render awards, which can be extended by an additional six months with party consent. Recent amendments in 2019 further clarified timelines and conditions for extensions while ensuring that if awards are not made within the stipulated time, the arbitrators lose their mandate unless extensions are granted by the court. The changes aim to streamline arbitration procedures, reduce delays, and limit judicial interference in arbitral proceedings.

1. Section 29A of the Arbitration and Conciliation (Amendment) Act, 2015
Section 29A has been added by an amendment of 2015 in the the Arbitration and
Conciliation Act, 1996 (the Act). Section 29A the Act lays down a mandatory time
limit for an arbitral tribunal to render its award in an India seated arbitration.
Section 29A of the Act reads as under:­
29A. (1) The award shall be made within a period of twelve months from the date
the arbitral tribunal enters upon the reference.
Explanation ­
For the purpose of this sub­section, an arbitral tribunal shall be
deemed to have entered upon the reference on the date on which
the arbitrator or all the arbitrators, as the case may be, have
received notice, in writing, of their appointment.
(2) If the award is made within a period of six months from the date the arbitral
tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive
such amount of additional fees as the parties may agree.
(3) The parties may, by consent, extend the period specified in sub­section (1) for
making award for a further period not exceeding six months.
(4) If the award is not made within the period specified in sub­section (1) or the
extended period specified under sub­section (3), 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:
Provided that while extending the period under this sub­section, if the Court finds
that the proceedings have been delayed for the reasons attributable to the arbitral
tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five
per cent. for each month of such delay.
(5) The extension of period referred to in sub­section (4) may be on the application
of any of the parties and may be granted only for sufficient cause and on such terms
and conditions as may be imposed by the Court.
(6) & (7) XXX XXX XXX.
(8) It shall be open to the Court to impose actual or exemplary costs upon any
of the parties under this section.
(9) XXX
W.e.f. 9th
August, 2019, Section 23 and 29A have been amended. Section 23(4)
provides for time limit to complete the pleading within six months from the date the
arbitrator received a notice, in writing, of his appointment. Amended Section 29A
lays down a mandatory time limit for an arbitral tribunal to render its award other
than other than international commercial arbitration.
These amended Sections now read as under...
By an amendment of 2019, Sub­section 4 has been added to Section 23 of the Act.
Which reads as under.
The statement of claim and defence under this section shall be completed within a
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2. period of six months from the date the arbitrator or all the arbitrators, as the case
may be, received notice, in writing, of their appointment.
By an amendment of 2019, Sub­section 1 and Sub­section 4 of Section 29A have
been amended. Which read as under.
In section 29A of the principal Act­
(1) The award in matters other than international commercial arbitration shall be
made by the arbitral tribunal within a period of twelve months from the date of
completion of pleadings under sub­section (4) of section 23:
Provided that the award in the matter of international commercial arbitration
may be made as expeditiously as possible and endeavour may be made to dispose of
the matter within a period of twelve months from the date of completion of
pleadings under sub­section (4) of section 23.
After the proviso of Section 29A(4) following provisos have been inserted.
Provided further that where an application under sub­section (5) is pending,
the mandate of the arbitrator shall continue till the disposal of the said application:
Provided also that the arbitrator shall be given an opportunity of being heard
before the fees is reduced.
Section 29A of the Act requires an arbitral tribunal to render an award within 12
months (which may be extended for further period of six months with the consent of
the parties) from the date the arbitral tribunal enters upon the reference or from the
date of completion of pleadings under newly introduced Section 23(4) of the Act.
After reading pre­amended Section 29A and amended Section 29A of the Act certain
questions may arise. They are...
What was the need for bringing in Section 29A of the Act?
Section 29A(5) of the Act provides that the extension of period
referred to in Section 29A(4) of the Act may be on the application of
any of the parties and may be granted only for sufficient cause and
on such terms and conditions as may be imposed by the Court.
Whether this Court is the Court as defined u/s 2(1)(e) of the Act or a
Court which has appointed arbitrator u/s 11 of the Act?
Whether the amendment of 2019 has the retrospective effect to those
arbitral proceedings which have commenced after 23rd
October, 2015
and award thereof has not been made with the time period
prescribed u/s 29A of the Act?
When the award is not rendered within the time period prescribed
u/s 29A(1) or the extended period specified u/s 29A(3) of the Act,
the arbitral tribunal loses its mandate and the parties are mandatorily
required to approach the Court for extension of the time limit beyond
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3. 12 months or 18 months, as the case may be?
If the mandate of the arbitral tribunal is terminated in accordance
with Section 29A(4) of the Act, the arbitrator becomes functus officio
or de jure/de facto (u/s 14 of the Act) unable to perform his function
or the aggrieved party has to move an application u/s 15 of the Act?
Is there any is time limit prescribed under Section 29A(5) of the Act
for making an application for extension of time?
The extension of time under Section 29A(5) of the Act can be granted
for how much period?
Whether the extension of period referred to in Section 29A(5) of the
Act may be on the application of any of the parties or upon the oral
request Court can extend the time?
What are going to be the considerations for the Court to impose
actual or exemplary costs upon any of the parties under Section
29A(8) of the Act?
What was the need for bringing in Section 29A of the Act?
The First Schedule of the Arbitration Act, 1940 speaks about Implied Conditions of
Arbitration Agreements. Condition No.3 prescribes a time limit of 4 months to
render the award, after the arbitral tribunal had entered into reference to render the
award. The Court had the discretion to extend this time, and no upper limit was
prescribed for the same under the 1940 Act.
The 176th
Law Commission recommended prescribing a mandatory time limit, and
attributed delays in arbitration to removal of such a provision pursuant to the
enactment of the 1996 Act. The Justice Saraf Committee, which was set up to review
the recommendations of the 176th
Report, unequivocally rejected the proposal to
include mandatory time limits in the 1996 Act.
There was no mention of Section 29A of the Act in the 246th
Law Commission
Report, which proposed various changes to the Act and most of which have been
introduced vide the 2015 Amendment Act.
While examining the role of the judiciary in arbitration, and the statutory bar on
unnecessary judicial interference under Section 5 of the Act, the 246th
Law
Commission noted the contrast between the 1996 Act and the 1940 Act. The
drawbacks of judicial intervention in arbitral proceedings were also discussed and
the need for the Courts to act as partners, not superiors or antagonists was
emphasized. Additionally, it has been acknowledged that since the parties have
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4. chosen to arbitrate and not litigate, the Courts must respect this choice and
remember that their powers under the arbitration statute exist only to support, and
not supersede, the powers of the arbitrators.
If we read the object for which 2015 amendment was brought in it clearly appears
that the 2015 Amendment has been enacted to ensure expeditious and cost effective
disposal of arbitral matters, with minimal judicial intervention. Simple reading of
Section 29A of the Act makes it abundantly clear that same was introduced to
ensure expeditious and cost­effective disposal of arbitral matters.
Section 29A(5) of the Act provides that the extension of period referred to in
Section 29A(4) of the Act may be on the application of any of the parties and
may be granted only for sufficient cause and on such terms and conditions as
may be imposed by the Court. Whether this Court is the Court as defined u/s
2(1)(e) of the Act or a Court which has appointed arbitrator u/s 11 of the Act?
This issue has been decided by the Hon'ble Gujarat High Court in the of Nilesh
Ramanbhai Patel v/s. Bhanubhai Ramanbhai Patel, 2019 (2) GLR 1537. After noting
the contrary ratio laid down by the Kerala High Court in case of M/s. URC
Construction (Private) Ltd. v/s. M/s. BEML Ltd., 2017 SCC Online Ker 20520 it has
been held in para 15 as under...
This provision of Section 29A of the Act thus makes a few things clear. Firstly, the
power to extend the mandate of an arbitrator under subsection (4) of Section 29A
beyond the period of twelve months or such further period it may have been
extended in terms of sub­section (3) of Section 29A rests with the Court. Neither the
arbitrator nor parties even by joint consent can extend such period. The Court on
the other hand has vast powers for extension of the period even after such period is
over. While doing so the Court could also choose to substitute one or all of the
arbitrators and this is where the definition of term ‘Court’ contained in Section 2(1)
(e) does not fit. It is inconceivable that the legislature would vest the power in the
Principal Civil Judge to substitute an arbitrator who may have been appointed by
the High Court or Supreme Court. Even otherwise, it would be wholly impermissible
since the powers for appointment of an arbitrator when the situation so arises, vest
in the High Court or the Supreme Court as the case may be in terms of sub­section
(4), (5) and (6) of Section 11 of the Act. If therefore, there is a case for extension of
the term of an arbitrator who has been appointed by the High Court or Supreme
Court and if the contention of Shri Mehta that such an application would lie only
before the Principal Civil Court is upheld, powers under sub­section (6) of Section
29A would be non operatable. In such a situation sub­section (6) of Section 29A
would be rendered otiose. The powers under sub­section (6) of Section 29A are of
considerable significance. The powers for extending the mandate of an arbitrator are
coupled with the power to substitute an arbitrator. These powers of substitution of
an arbitrator are thus concomitant to the principal powers for granting an extension.
If for valid reasons the Court finds that it is a fit case for extending the mandate of
the arbitrator but that by itself may not be sufficient to bring about an early end to
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5. the arbitral proceedings, the Court may also consider substituting the existing
arbitrator. It would be wholly incumbent to hold that under sub­section (6) of
Section 29A the legislature has vested powers in the Civil Court to make
appointment of arbitrators by substituting an arbitrator or the whole panel of
arbitrators appointed by the High Court under Section 11 of the Act. If we therefore,
accept this contention of Shri Mehta, it would lead to irreconcilable conflict between
the power of the superior Courts to appoint arbitrators under section 11 of the Act
and those of the Civil Court to substitute such arbitrators under Section 29A(6) of
the Act. This conflict can be avoided only by understanding the term “Court” for the
purpose of Section 29A of the Act as the Court which appointed the arbitrator in
case of Court constituted arbitral Tribunal.
In the following cases similar view has been taken.
­ Chadalavada Krishna Murthy v/s. Vinod Baid, 2018 SCC Online Hyd 311 = 2018 6
ALD 428 = 2018 6 ALT 563.
­ Cabra Instalaciones Y. Servicios v/s. Maharashtra State Electricity Distribution
Company Limited, 2019 SCC Online Bom 1437.
In the following case contrary view has been taken.
­ KCS Private Limited v/s. Rosy Enterprises, 2018 (II) OLR 781 = 2018 0 Supreme
(Ori) 610.
Whether the amendment of 2019 has the retrospective effect to those arbitral
proceedings which have commenced after 23rd
October, 2015 and award
thereof has not been made with the time prescribed u/s 29A of the Act?
In the case of BCCI v/s. Kochi Cricket Pvt. Ltd., 2018 (6) SCC 287 it has been held
that a statute which not only changes the procedure but also creates new rights and
liabilities shall be construed to be prospective in operation, unless otherwise
provided, either expressly or by necessary implication. It is, interalia, because time
period for the making of an arbitral award have been laid down for the first time in
Section 29A of the Amendment Act of 2015 that parties were given the option to
adopt such timelines which, though procedural in nature, create new obligations in
respect of a proceeding already begun under the unamended Act of 1996.
Thus in view of the observations made by Hon'ble Supreme Court in the case of
BCCI (supra) Section 29A of the Act is procedural in nature but as same also creates
new rights and liabilities, it shall be construed to be prospective in operation and
shall apply to only those arbitral proceedings which have commenced after 23rd
October, 2015.
Section 29A of the Act has been further amended by way of an Amendment of 2019
(w.e.f. 9th
August, 2019) and time limit prescribed under the pre­amended Section
29A has been virtually enhanced. Therefore, the ancillary question which may
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6. arise here is, whether amendment of 2019 will apply to the pending arbitral
proceeding retrospectively or prospectively?
Lets understand this question by an illustration:­
Other­side received the request to refer dispute to arbitration on 1st
July, 2018. The
arbitral tribunal enters upon the reference on 15th
August, 2018. The statement of
claim and defence have been completed on 15th
January, 2019. As per the pre­
amended Section 29A(1) of the Act the award shall be made within a period of
twelve months from the arbitral tribunal enters upon the reference i.e. 15th
August,
2019. Parties have not agreed to extend the period by six month as provided u/s
29A(3) of the Act. Thus, as per the old Section 29A of the Act the arbitral tribunal
was supposed to declare award by 14th
August, 2019 but failed to do so. The
question therefore, which arises here is, whether the mandate of the arbitrator shall
be terminated or would continue till the time prescribed under the amendment
Section 29A(1) of the Act?
As noted hereinabove, w.e.f. 9th
August, 2019 time limit to pronounce the ward has
been enhanced and same is now twelve months from the date of completion of
pleadings under sub­section (4) of section 23 of the Act and not within a period of
twelve months from the date the arbitral tribunal enters upon the reference.
Admittedly, the time limit which was prescribed under the old Section 29A of the
Act has been enhanced and, therefore, in the situation described in the supra
illustration, the question may arise as to whether amendment of 2019 will apply
to the such pending arbitral proceeding (commenced after 23rd
October, 2015)
retrospectively or prospectively?
To answer this question reference may be made to ratio laid down by the Privy
Council in the case of Shahid Ganj Mosque v/s. Shiromani Gurdwara Prabandhak
Committee AIR 1940 PC 116 wherein it has been held that amendment in the rules
of limitation being a matter of procedure, shall apply prospectively. In the case of
the King v/s. Chandra Dharma [1905] 2 K.B. 335, Lord Alverstone, C.J., stated that
a law altering the time within which a proceeding may be taken and not altering a
right is "a mere matter of procedure". A Full Bench of this Court said in Bankey Lal
v/s. Babu, AIR 1953 All 747 (FB) that rules of limitation are rules of procedure and
do not create any right in favour of any person, nor define or create causes of action
but merely prescribe the period within which the remedy can be exercised.
Hon'ble Supreme Court in the cases C. Beepathuma v/s. Velsari Shankaranarayana
Kadambolithaya, AIR 1965 SC 241 and K. Kapen Chako v/s. The Provident
Investment Company (P) Ltd., 1977 (1) SCC 593, has held that the law of limitation
is a procedural law.
Wherein it has been held that...
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7. If the legislature forms a new procedure, alterations in the form of procedure are
retrospective unless there is some good reason or other why they should not be. In
other words, if a statute deals merely with the procedure in an action, and does not
affect the rights of the parties it will be held to apply prima facie to all actions,
pending as well as future.
If we applying the ratio laid down by in the above referred cases in the facts of the
supra illustration, the conclusion would be, if an arbitral tribunal fails to render an
award within 12 months i.e. 14th
August, 2019 from the date the arbitral tribunal
enters upon the reference (as per old Section 29A) then also the mandate of the
arbitrator shall not be terminated and period limitation to render an award would
be reckon from the date of completion of pleadings under sub­section (4) of section
23 of the Act i.e. 15th
January, 2019 and not from the date the arbitral tribunal
enters upon the reference (as per old Section 29A) i.e. 15th
August, 2018.
When the award is not rendered within the time period prescribed u/s 29A(1)
of the Act or the extended period specified u/s 29A(3) of the Act, the arbitral
tribunal loses its mandate and the parties are mandatorily required to
approach the courts for extension of the time limit beyond 12 months or 18
months, as the case may be?
Section 29B of the Act provides for fast track procedure. It provides that at any stage
either before or at the time of appointment of the arbitral tribunal, agree in writing
to have their dispute resolved by fast track procedure specified in sub­section (3) of
Section 29B of the Act. As per Section 29B of the Act parties are free to avail the
fast track procedure as an alternative which is not imposed on them and can be
chosen of their own volition, unlike Section 29A of the Act. Section 29B of the Act
requires the arbitration proceedings to be concluded within six months from the
date the tribunal has entered into reference. The adjudication is conducted on the
basis of written pleadings, documents and submissions filed by the parties, with no
oral hearings taking place in order to expedite the process.
Section 29A(4) of the Act of the Act provides that, if the award is not made within
the period specified in Section 29A(1) or the extended period specified under
Section 29A(3), 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.
Simple reading of the above provisions would show that in case the mandate of the
arbitrator terminates due to non­passing of the award within the period of 12
months, the parties may by consent, extend the period for making of the award by a
further period not exceeding six months. In case of failure of a party to give consent
to such extension or where the arbitral award is not made even after the expiry of
the extended period, the Court may, on an application being made by any of the
parties to the arbitration proceedings, grant further extension of the period for
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8. making of the award.
A settled principle of the interpretation of statute is contained in the Latin maxim
Expressio unius est exclusion alterious. Explanation of this principle is that, when
statute requires a thing to be done in a particular manner, it must be done in that
manner or not at all. Section 29A(6) of the Act empowers the Court to substitute
one or all of the arbitrators while extending the period for making of the award.
Hon'ble Supreme Court in he case of State of Bihar v/s. Bihar Rajya Bhumi Vikas
Bank Samiti, 2018 (9) SCC 472 while interpreting Section 34(6) of the Act has held
in para 24 as under...
It will be seen from Section 29A of the Act that, unlike Section 34(5) and (6), if an
Award is made beyond the stipulated or extended period contained in the Section,
the consequence of the mandate of the Arbitrator being terminated is expressly
provided. This provision u/s 29A of the Act is in stark contrast to Section 34(5) and
(6) where, if the period for deciding the application under Section 34 has elapsed,
no consequence is provided.
Therefore, answer to the above referred query is, when the award is not rendered
within the time period prescribed u/s 29A(1) or the extended period specified u/s
29A(3) of the Act, the arbitral tribunal loses its mandate and the parties are required
to approach the Court for extension of the time limit beyond 12 months [under
section 29A(1)] or 18 months [under section 29A(3)], as the case may be.
It has been held by the Hon'ble Delhi High Court in the case of Avneet Goyal v/s.
Union of India, 2019 SCC Online Del 8796 that as per Section 29A of the Act, on the
expiry of the period mentioned therein, it is the mandate of the Arbitrator that
terminates and not the arbitration proceedings themselves.
The ancillary question which may arise here is, whether in terms of Section
29A(1) of the Act, the time for making of the arbitral award even with respect
to the counter claim stood expired with after the completion of period
prescribed under Section 29A(4) of the Act?
In the case of Angelique International Ltd. v/s. SSJV Projects Pvt. Ltd., 2018 SCC
OnLine Del 8287 this issue has also been decided.
It was argued before the Hon'ble Delhi High Court by the Ld. Counsel for the
respondents that, as the limitation period for the purpose of the counter claim is to
be considered right till the date of the filing of counter claim itself, equally, for the
purpose of counting 12 months period under Section 29A of the Act, the time of the
actual filing of the counter claim should be considered as the date the Arbitrator
enters upon the reference qua the counter claim.
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9. Relying upon the ratio laid down by the Hon'ble Supreme Court in the case of State
of Goa v/s. Praveen Enterprises 2012 (12) SCC 581, Hon'ble Delhi High Court in the
case of Angelique International Ltd. (supra) has held that as no separate notice was
required for the purpose of the filing of the counter claim, the period for making of
an award even with respect to the counter claim would stand expired after a period
of 12 months prescribed u/s 29A(1) of the Act. Even the order passed by High Court
while appointing the Arbitrator u/s 11 of the Act has granted liberty to the parties to
file their respective claims and counter claims before the Arbitrator. Therefore, this
order of the High Court u/s 11 of the Act would, therefore, amount to a reference of
the counter claim as well and the Arbitrator cannot proceed with the counter claim
after the expiry of 12 months from the date of entering the reference.
Finally it has been held that the respondent, therefore, was not obligated to wait for
the petitioner to have filed its claim before making the counter claim. The object of
providing for counter claims is to avoid multiplicity of proceedings and to avoid
divergent findings, however, once the mandate of the arbitrator terminates under
Section 29A of the Act, the same cannot be held to have terminated only in part or
only with respect to the claim filed by the Claimant and not with respect to the
counter claim. The mandate terminates for the entire proceeding before the
Arbitrator. Therefore, the Arbitrator could not have decided to continue with the
counter claim once his mandate had terminated under Section 29A of the Act on the
expiry of 12 months from the date of his entering upon the reference.
Another question which needs to be answered here is whether the Arbitrator can
continue with the sittings of arbitral proceedings even after the expiry of the
period prescribed either u/s 29A(1) or extended period u/s 29A(3) of the Act?
Hon'ble Kerala High Court in the case of Union of India v/s. Advanced Polymer
Technology, 2019 1 KHC 234 = 2019 1 KLJ 894 = 2019 1 KLT(SN) 68 = 2018 0
Supreme(Ker) 914 has held that admittedly after the period prescribed u/s 29A of
the Act arbitrator has passed the interim orders and in the absence of any order
granting enlargement of time, the Arbitrator did not have any authority to hold
sittings or pass orders. Arbitrator becomes functus officio on expiry of the period
prescribed u/s 29A(1) or 29A(3) of the Act, and no arbitral sittings can be held after
the prescribed period provided u/s 29A of the Act till enlargement of time is granted
by the Court.
If the mandate of the arbitral tribunal is terminated in accordance with Section
29A(4) of the Act, the arbitrator becomes functus officio or de jure/de facto (u/s
14 of the Act) unable to perform his function or the aggrieved party has to
move an application u/s 15 of the Act?
This issue is no more res integra in view of the ratio laid down by the Kerala High
Court in the case of Advanced Polymer Technology (supra). Facts of the case before
the Hon'ble Delhi High Court in the case of Angelique International Ltd. (supra)
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10. were, the Arbitrator has terminated the proceedings with respect to the claims of the
petitioner on the ground that the petitioner is not proceeding with the arbitration
proceeding.
Hon'ble Delhi High Court has held that, in the presence of the specific provisions
and powers of the Court in a situation where the mandate of the arbitral tribunal
terminates due to non­making of the award within the prescribed time as contained
in Section 29A of the Act, the Court cannot resort to Section 14 of the Act for
substituting the Arbitrator or the Arbitrators. Section 14 of the Act would have to be
read along with Sections 12 and 13 of the Act and would, therefore, be applicable
only in a case where there is a challenge made to a particular arbitrator or
arbitrators and where due to such challenge, the arbitrator becomes de jure or de
facto unable to perform his functions. Section 14 would have no application in a
case where the mandate of the Arbitral Tribunal terminates due to the expiry of the
time for making of the Award under Section 29A(4) of the Act and, therefore, the
application under Section 14 read with Section 15 of the Act, would in fact not even
be maintainable.
The impugned order in the case of Angelique International Ltd. (supra) shows that
the Arbitrator has terminated the proceedings with respect to the claims of the
petitioner on the ground that the petitioner is not proceeding with the arbitration
proceeding and ultimately arbitrator terminated the claim u/s 25(a) of the Act.
Wherein, it has been observed that the Scheme of Section 25 of the Act clearly
indicates that on sufficient cause being shown, the statement of claim can be
permitted to be filed even after the time as fixed by Section 23(1) has expired. Thus,
even after passing the order of terminating the proceedings, if sufficient cause is
shown, the claims of statement can be accepted by the arbitral tribunal by accepting
the show­cause and there is no lack of the jurisdiction in the arbitral tribunal to
recall the earlier order on sufficient cause being shown.
It has been further held that, the principle of Expressio unius este xclusio alterius
which means that when a statute requires a thing to be done in a particular manner,
it must be done in that manner or not at all. It has been further held that a conjoint
reading of Section 14 and Section 29A of the Act is not possible. When the delay is
attributable to the tribunal, the Court can order reduction of fees of the arbitrator,
or substitute the arbitrator. Section 14 of the Act, on the other hand, must be read
with Sections 12 and 13 of the Act and invoked only in cases where there is a
challenge made to the arbitrator on the grounds of de jure or de facto inability to
perform their functions, and not in case of expiry of time limit prescribed under
Section 29A of the Act.
Above referred observations have been arrived at by the Hon'ble Delhi High Court by
relying on the following ratios
­ The India Trading Company v/s. Hindustan Petroleum Corporation Ltd., 2016 SCC
Online Cal 479.
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11. ­ Joginder Singh Dhaiya v/s. M.A.Tarde Thr Lrs, 2017 SCC Online Del 12559.
­ Srei Infrastructure Finance Ltd. v/s. Tuff Drilling Pvt. Ltd., 2018 (11) SCC 470.
­ Indian Farmers Fertilizer Cooperative Limited v/s. Bhadra Products, 2018 (2) SCC
534.
In the case of Economic Transport Organisation v/s. Splendor Buildwell Pvt. Ltd.,
2018 0 Supreme (Del) 1200 the arbitral tribunal has observed, in the impugned
order that the claimant was neither interested in final submission of the claims nor
desired to withdraw the claims from the arbitral tribunal and was only interested in
delaying the proceedings on one pretext or the other. Accordingly, the arbitral
tribunal terminated the arbitral proceedings under Section 25(a) of the Act, in view
of the failure of the claimant to file the Statement of Claims despite several
opportunities.
Hon'ble Delhi High Court was poised with a question as to whether the above
referred order of the arbitral tribunal can be challenged u/s 14 or 29A or 34 of the
Act?
While answering this question, Hon'ble Delhi High Court has relied upon the ratio
laid down in the case of Lalitkumar Sanghavi v/s. Dharamdas Sanghavi, 2014 (7)
SCC 255, and it has been held that, as is apparent from the relevant extract of the
judgment quoted above, the Supreme Court had held that an order of the arbitral
tribunal terminating the arbitral proceedings for want of the claimant pursuing
its claims would be an order under Section 32(2) of the Act and the remedy
available to a party against such an order terminating the arbitral proceeding
would be under Section 14 of the Act and not under any other provision. A
challenge under Section 34 of the Act was not contemplated for the obvious reason
that an order under Section 32(2) of the Act is not an award. And finally held that
such an award can be challenged u/s 14 of the Act.
The ratios laid down by the Delhi High Court in the case of Angelique International
Ltd. (supra) and Economic Transport Organisation (supra) leads to serious
confusion.
In the case of Angelique International Ltd. (supra) it was a case where the Arbitrator
has terminated the proceedings with respect to the claims of the petitioner on the
ground that the petitioner is not proceeding with the arbitration proceeding and
ultimately arbitrator terminated the claim u/s 25(a) of the Act. Whereas, in the case
of Economic Transport Organisation (supra) it was a case where the claimant was
neither interested in final submission of the claims nor desired to withdraw the
claims from the arbitral tribunal and accordingly, the arbitral tribunal terminated
the arbitral proceedings under Section 25(a) of the Act.
In the case of Angelique International Ltd. (supra) it has been held that when
arbitrator terminates the claim u/s 25(a) of the Act such order would be akin to the
dismissal of a suit, on a technical ground may be, of non­prosecution and, therefore,
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12. on sufficient cause being shown, the statement of claim can be permitted to be filed
even after the time as fixed by Section 23(1) has expired. Thus, even after passing
the order of terminating the proceedings, if sufficient cause is shown, the claims of
statement can be accepted by the arbitral tribunal by accepting the show­cause and
there is no lack of the jurisdiction in the arbitral tribunal to recall the earlier order
on sufficient cause being shown.
Whereas, in the case of Economic Transport Organisation (supra) it has been held
that when that an order of the arbitral tribunal terminating the arbitral
proceedings for want of the claimant pursuing its claims would be an order
under Section 32(2) of the Act and the remedy available to a party against such
an order terminating the arbitral proceeding would be under Section 14 of the
Act and not under any other provision.
It is not in dispute that in both the above referred cases, the arbitrators terminated
the claims u/s 25(a) of the Act, as in both the cases claimants failed to submit
statement of claims within time as envisaged by Section 23 of the Act . In the case of
Angelique International Ltd. (supra) it has been held that even after passing the
order of terminating the proceedings, if sufficient cause is shown, the claims of
statement can be accepted by the arbitral tribunal by accepting the show­cause and
there is no lack of the jurisdiction in the arbitral tribunal to recall the earlier order
on sufficient cause being shown. Whereas, in the case of Economic Transport
Organisation (supra) it has been held that remedy against such order would be u/s
14 of the Act.
If we read the ratio laid down in the case of Economic Transport Organisation
(supra) it becomes clear that the (supra) has not been taken into consideration. In
the case of Srei Infrastructure Finance Ltd. (supra) after taking into consideration
the ratio laid down in the case of Lalitkumar Sanghavi (supra) and S.B.P. & Co. v/s.
Patel Engineering Ltd., 2005 (8) SCC 618 have been taken into consideration. And,
thereafter, it has been held in para 21 and 22 as under...
21. When the arbitral tribunal without sufficient cause being shown
by the claimant to file the claim statement can terminate the
proceedings, subsequent to termination of proceedings, if the
sufficient cause is shown, we see no impediment in the power of the
arbitral tribunal to accept the show­cause and permit the claimant to
file the claim. The Scheme of Section 25 of the Act clearly indicates
that on sufficient cause being shown, the statement of claim can be
permitted to be filed even after the time as fixed by Section 23(1)
has expired. Thus, even after passing the order of terminating the
proceedings, if sufficient cause is shown, the claims of statement can
be accepted by the arbitral tribunal by accepting the show­cause and
there is no lack of the jurisdiction in the arbitral tribunal to recall the
earlier order on sufficient cause being shown.
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13. 22. Section 32 contains a heading “Termination of Proceedings”.
Sub­section (1) provides that the arbitral proceedings shall be
terminated by the final arbitral award or by an order of the arbitral
tribunal under sub­section(2). Sub­section(2) enumerates the
circumstances when the arbitral tribunal shall issue an order for the
termination of the arbitral proceedings. The situation as
contemplated under Section 32(2)(a) and Section 32(2)(b) are not
attracted in the facts of this case. Whether termination of
proceedings in the present case can be treated to be covered by
Section 32(2)(c) is the question to be considered. Sub­clause(c)
contemplates two grounds for termination, i.e.; (i) the arbitral
tribunal finds that the continuation of the proceedings has for any
other reason become unnecessary or (ii) impossible. The eventuality
as contemplated under Section 32 shall arise only when the claim is
not terminated under Section 25(a) and proceeds further. The word
‘unnecessary’ or ‘impossible’ as used in sub­clause (3) of Section
32(2) cannot be said to be covering a situation where proceedings
are terminated in default of the claimant. The word unnecessary or
impossible has been used in different contexts than to one of default
as contemplated under Section 25(a). Sub­section (3) of Section 32
further provides that the mandate of the arbitral tribunal shall
terminate with the termination of the arbitral proceedings subject to
Section 33 and sub­section (4) of Section 34. Section 33 is the power
of the arbitral tribunal to correct any computation errors, any clerical
or typographical errors or any other errors of a similar nature or to
give an interpretation of a specific point or part of the award. Section
34(4) reserves the power of the Court to adjourn the proceedings in
order to give the arbitral tribunal an opportunity to resume the
arbitral proceedings or to take such other action as in the opinion of
arbitral tribunal will eliminate the grounds for setting aside the
arbitral award. On the termination of proceedings under Section
32(2) and 33(1), Section 33(3) further contemplates termination of
the mandate of the arbitral tribunal, whereas the aforesaid words are
missing in Section 25. When the legislature has used the phrase “the
mandate of the arbitral tribunal shall terminate” in Section 32(3),
non­use of such phrase in Section 25(a) has to be treated with a
purpose and object. The purpose and object can only be that if the
claimant shows sufficient cause, the proceedings can be re­
commenced.
Since, in the case of Economic Transport Organisation (supra) it becomes clear that
the (supra) the ratio laid down in the case of Srei Infrastructure Finance Ltd. (supra)
has not been taken into consideration, in my respectful view the ratio laid down in
the case of Economic Transport Organisation (supra) amy not be taken into
consideration.
H S Mulia 13

14. However, the imponderabilia surrounding the observations and conclusions made in
the cases of Angelique International Ltd. (supra) and Economic Transport
Organisation (supra) has to be resolved by the Hon'ble Supreme Court and one has
to wait for the final decision of the Hon'ble Supreme Court on this point.
Hon'ble Division Bench of the Himachal Pradesh High Court in the case of P. K.
Construction Com. v/s. Shimla Municipal Corporation, AIR 2017 HP 103 has held
that in the event of termination of mandate of Arbitrator, aggrieved party can resort
to Section 15 of the Act.
Is there any is time limit prescribed under Section 29A(5) of the Act for making
an application for extension of time?
In the case of FCA India Automobiles Pvt. Ltd. v/s. Torque Motor Cars Pvt. Ltd.,
2018 SCC OnLine Bom 4371, Hon'ble Bombay High Court has held that there is no
time limit prescribed under Section 29A of the Act for making an application for
extension of time, but such an application must be made within a reasonable time.
The extension of time under Section 29A(5) of the Act can be granted for how
much period?
Bare reading of Section 29A(5) of the Act provides that the extension of period may
be granted only for sufficient cause and on such terms and conditions as may be
imposed by the Court. It does no speak about the time period for how much period
the time limit to pronounce the award can be extended.
As discussed hereinabove, the Rule 3 of the First Schedule under the Arbitration and
Conciliation Act, 1940 prescribed a time limit of 4 months to render the award, after
the tribunal had entered into reference to render the award. Even under the 1940
Act the Court had the discretion to extend this time, and no upper limit was
prescribed for the same under the 1940 Act. Same analogy would apply in cases of
the 1996 Act.
Whether the extension of period referred to in Section 29A(5) of the Act may
be on the application of any of the parties or upon the oral request Court can
extend the time?
In the case of Chandok Machineries v/s. SN Sunderson & Co., 2018 SCC OnLine Del
11000 the issue before the Hon'ble Delhi High Court was, an award which was
passed after the prescribed time limit provided under Section 29A(1) of the Act and
same was challenged for being issued after the expiry of the 12 months limit. The
petitioner also refused to give consent for extension of time to render the award,
under Section 29A(3) of the Act.
H S Mulia 14

15. Answering this issue Hon'ble Division Bench of the Delhi High Court has held that
even though there was no written application for extension of time under Section
29A(5) of the Act, the Court deemed it fit to exercise its powers under Section
29A(4) and place the burden on the petitioner to show why the time limit should
not be extended by the court. The ambit of Section 29A(4) was expanded by ruling
that such application need not only be in writing, but can also be made orally. It is
further held that after extension of time by the Court under Section 29A(4), any
proceedings undertaken by the tribunal after the expiry of the statutory time limit,
will stand validated.
What are going to be consideration for the Court to impose actual or exemplary
costs upon any of the parties under Section 29A(8) of the Act?
To answer this question one has to take into account the report of the Law
Commission Of India , Report No.176, the Arbitration And Conciliation
(Amendment) Bill, 2001, at page No. 127. Wherein the guidance as to the factors
which should be taken into account while passing an order for costs in relation to
such delays and the future procedure to be followed by the arbitral tribunal. They
are as under:­
a) extent of work already done;
b) reasons for delay;
c) conduct of the parties or of any person representing the parties;
d) the manner in which proceedings were conducted by the arbitral tribunal;
e) further work involved;
f) amount of money already spent by the parties towards fee and expenses of the
arbitration; and
g) any other relevant circumstances.
H S Mulia 15