What is the time limit for the arbitral tribunal to decide the arbitral award? Can this time be extended?
Section 29A of the Arbitration and Conciliation Act, 1996, provides for the time limit for making the arbitral award by the arbitration tribunal, which is twelve months from the date of the completion of the pleadings. After the completion of the pleadings, this provision states that the award must be made as swiftly as possible.
Under Section 29A (3) of the Act, the said time limit of 12 months may be extended by up to six months by way of the consent of the parties, in order to facilitate the completion of arbitral proceedings. Further, in the event of the expiry of the additional 6 months, the parties may file an application before the Court under Section 29A (5) to extend this time, if sufficient cause is provided for its extension. During the course of the pendency of this application, the mandate of the arbitrator continues to exist until the disposal of the said application under Section 29A (5) of the Act. Under Section 29A (4), even if the expiry date has passed, the Court can still have it extended.
In the recent case of ATC Telecom Infrastructure Pvt Ltd v. BSNL [O.M.P.(MISC.) (COMM.) 466/2023], the Hon’ble High Court of Delhi dealt with the issue of whether an application, for an extension of time for arbitration proceedings is maintainable beyond the collective expiry of time period involving the statutory time period of 12 months as well as the additional time period of 6 months. The High Court held the same in affirmative, whereupon the reading of Section 29A (4), it was clear that the Court can extend the time limit even after the expiry of the eighteen-month time period. The Court further observed that in the event such an application is found to be not maintainable, it is likely to reduce the efficacy of the arbitral proceedings.
Under Section 29A (4) of the A&C Act, what are the listed provisos?
Under Section 29A(4) of the A&C Act, if the arbitral award is not made within the prescribed time period as per Section 29A of the Act or for that matter even within the extended time period of 6 months as per Section 29A(3) of the Act, the mandate of the arbitrator shall stand terminated, unless the said time limit is extended by the Court prior or after the expiry of the said time period by entertaining an Application moved under Section 29A(5) of the Act, before it.
There are three provisos to Section 29A (4) of the Act.
Firstly, in the event, it is found by the Court that there was any delay in the proceedings due to any actions/inactions of the arbitrator(s), it may order the reduction of fees of the arbitrator(s) to the maximum of five percent for each month of delay that is caused.
Secondly, in relation to the first proviso, the arbitrator should also be given the chance to be heard on the reason for the delay before the Court decides to reduce their fees.
Thirdly, if the application under Section 29A (5) for the extension of the time period is still pending disposal, the mandate of the arbitrator will automatically continue until the disposal of the application.
References:
