C. Velusamy vs K Indhera

Held: Provisions of the Act, particularly s.29A, must not be interpreted to infer a threshold bar for an application u/s.29A(5) for extension of the mandate of the arbitrator even when an award is passed, though after the expiry of the mandate – Court can entertain an application u/s.29A(5) and pass appropriate orders u/s.29A(4) for extension of the mandate of the arbitrator even after the award is rendered in the meanwhile – Thus, an application u/s.29A(5) for extension of the mandate of the arbitrator is maintainable even after the expiry of the time u/ss.29A(1) and (3) and even after rendering of an award during that time – Such an award is ineffective and unenforceable – But the power of the court to consider extension is not impaired by such an indiscretion of the arbitrator – While considering the application, the Court will examine if there is sufficient cause for extending the mandate, and in the process, it may impose such terms and conditions as the situation demands – It will also take into account other factors such as reduction of the fee of the arbitrator under proviso to s.29A(4) and also impose costs on parties if the fact situation so demands – Substitution is an option for the Court as the provision itself says, “it shall be open for the Court to substitute”, and it will be exercised carefully – If the mandate is extended, the arbitral tribunal will pick up from where it was left, and seamlessly continue the proceeding from the stage at which the mandate had expired, and conclude within the time granted – Appeal against the judgment in Application No. 5993 of 2024 passed by the High Court is allowed – Application is restored to its original number – High Court will proceed with the said application and dispose it of as per the principles laid down in the present judgment. [Paras 2, 20, 21, 23, 24] Arbitration and Conciliation Act, 1996 – s.29A – Interpretation: Held: Sub-section (1) of s.29A mandates that the award shall be made within 12 months of the completion of pleadings before the Arbitral Tribunal – While sub-section (2) incentivises expeditious making of the Award, proviso to sub-section (4) and sub-section

(8) authorises the Court to impose penalty for delay in making the award – Sub-section (3) enables parties, by consent, to extend the period of 12 months for making the award by a further period not exceeding 6 months – If the award is not made within the stipulated period of 12 months or the extended period of 6 months, the mandate of the arbitrator(s) shall terminate – This termination is subject to the power of the Court to extend the period – The ‘Court’ u/s.29A shall be the Civil Court of ordinary original jurisdiction in a district and includes the High Court in exercise of its original civil jurisdiction u/s.2(1)(e), and shall not be the High Court or the Supreme Court u/s.11(6) of the Act – s.42 of the Act relating to jurisdiction for applications will also not apply to s.11 of the Act – There is no statutory prescribed time limit for the Court to exercise the power u/s.29A(4) for extending the period, except for its own discretion – Court can exercise the power before or after the expiry of the period u/sub-sections 29A(1) or (3) – Further, there is no prescription of an outer limit for extending the time for the conclusion of arbitral proceedings – Given this power, the Court will exercise it with circumspection, balancing the remedy with the rights of other stakeholders – The power of the Court to extend the time u/sub-section (4) may be exercised on an application by any of the parties – Once such an application for extension of time is pending, the mandate of the arbitrator shall continue till the disposal of such application u/sub-section (9) – The Court shall endeavour to dispose of such an application within 60 days – Delay in the delivery of an arbitral award, by itself, is not sufficient to set aside that award – It is only when the effect of the undue delay in the delivery of an arbitral award is explicit and adversely reflects on the findings therein, such delay and, more so, if it remains unexplained, can be construed to result in the award being in conflict with the public policy of India – Under s.29A(6), while exercising the power of extension, it shall be open to the Court to substitute one or all the arbitrators – This is a discretionary power that the Court would exercise in the facts and circumstances of the case – Upon substitution, the reconstituted tribunal shall be deemed to be in continuation of the previously appointed tribunal as per s.29A(7) and shall continue from the stage already reached and on the basis of evidence already on record – The newly appointed arbitrators shall be deemed to have received the evidence and materials – Vesting of the power of substitution, u/s.29A(6), is on the “Court” and this Court is the “Court” as defined in s.2(1)(e) – The text, as well as the context for identifying the Court in s.29A(6), as well as in s.29A(4), is the Court in s.2(1)(e) – The expression ‘Court’ in other provisions must be guided by the meaning given in s.2(1) (e). [Paras 13 I-X]

Arbitration and Conciliation Act, 1996 – Arbitration Act, 1940 – Timelines for commencement, conduct, conclusion and termination of arbitral proceedings under both the Acts – Need for the prescription of timelines for making the award; recommendation of the law commission – International perspective on the validity of the arbitral award rendered after the stipulated statutory time limit – Discussed. [Paras 7-10] Arbitration and Conciliation Act, 1996 – s.29A, (4), (6) – “if an award is not made”:

Held: s.29A does not, in terms, bar an application for extension of the mandate of an arbitrator in the event of the delivery of an award – There is no such prescription anywhere in the section – In the first place, if an award is made after expiry of the mandate, then there is no doubt about the fact that such an award is non est – A better expression would be to hold that such an award would be unenforceable u/s.36 – Such an award need not be challenged u/s.34 – A unilateral act or the indiscretion of the arbitrator in making such an award will have no bearing on the power and jurisdiction vested in the Court u/s.29A – It cannot be that the Parliament has never intended that the act of an arbitrator in delivering an award when the mandate had expired would denude the power and jurisdiction vested in the Court – This power and jurisdiction stand on its own footing and is uninfluenced by the act of the arbitrator in passing an award without mandate – Further, the expression, “if an award is not made” in sub-section (4) is employed in the context of enabling the Court to extend the mandate of the arbitrator – The context in which the phrase is used makes it clear that the subsection is not addressing a situation where an arbitral award has been rendered after the mandate of the arbitrator has expired, but rather to declare that the Court can extend the period before or after the expiry of the mandate – ss.29A(4), (6) make it evident that the intention of the Parliament is to safeguard the conduct and conclusion of arbitral proceedings. [Paras 15, 16, 18] Arbitration and Conciliation Act, 1996 – ss.29A(4), 29A(5), 29A (6), 29A(8) – Empowerments thereunder, in the nature of instruments in s.29A, enable the courts to deploy them as and when the factual matrix demands – Stated. [Para 20] Interpretation of Statutes – Statute providing legal remedies for the resolution of disputes – Duty of constitutional court: Held: While interpreting an enactment providing legal remedies for the resolution of disputes, a constitutional court has the obligation to ensure that the provision is: (a) accessible, (b) affordable, (c) expeditious and (d) cohesive – Accessibility requires the remedy to be easily available – Affordability is an aspect that is related to the cost of availing the remedy, it must be at a reasonable price – Expeditious nature of a remedy is concerned with the quick disposal and abhors unreasonable delays – Yet another facet of effective remedy is in its cohesiveness. [Para 22]