Supreme Court of India· 05 January 2023
Does the consensual six-month extension under Section 29A(3) of the Arbitration and Conciliation Act, 1996 have any application to an international commercial arbitration?
TATA Sons Pvt. Ltd. v. Siva Industries and Holdings Ltd. & Ors.
2023 INSC 13 · Miscellaneous Application No. 2680 of 2019
Coram: Dr Dhananjaya Y Chandrachud; Pamidighantam Sri Narasimha
Answer
No. The rationale underlying sub-section (3) is that, despite the stipulation of twelve months for the making of an arbitral award in the domestic context, parties may by consent agree to an extension by a further period of six months. Such an extension is envisaged in the case of a domestic arbitration since there is a mandate that the award shall be made within a period of twelve months. Insofar as an international commercial arbitration is concerned, the timeline of twelve months is not applicable to it.
Headnote
Arbitration and Conciliation Act, 1996 — s. 29A — s. 29A(1), (3), (4) — 2019 Amendment Act — International commercial arbitration — Twelve-month timeline — Retrospectivity —
Arbitration and Conciliation Act, 1996 — s. 29A(1) — International commercial arbitration excluded from mandatory timeline —
Held: The expression "in matters other than international commercial arbitration" in the substantive part of amended Section 29A(1) excludes such arbitrations from the mandatory twelve-month timeline, which is only directory in nature for them. (¶25)
Arbitration and Conciliation Act, 1996 — s. 29A(3) — Six-month extension confined to domestic arbitration —
Held further: The consensual six-month extension under sub-section (3) is envisaged because a domestic award shall be made within a period of twelve months; insofar as an international commercial arbitration is concerned, that timeline is not applicable to it. (¶26)
Arbitration and Conciliation Act, 1996 — s. 29A — Remedial amendment applies to pending arbitrations —
Held further: The 2019 Amendment Act contains no provision equivalent to Section 26 of Act 3 of 2016 making it prospective, and the amendment, being remedial and conferring no rights or liabilities, applies to all pending arbitral proceedings as on 30 August 2019. (¶34)
Arbitration and Conciliation Act, 1996 — s. 29A — Extension of time within the arbitrator's domain —
Held further: In an international commercial arbitration a further extension of time lies within the domain and jurisdiction of the arbitrator and outside the purview of judicial intervention. Miscellaneous Application and Interlocutory Application allowed. (¶37, 38)
In the Court's own words
Paragraph 26Sub-section (3) of Section 29A empowers parties, by consent, to extend the period specified in sub-section (1) for making the award by a further period not exceeding six months. Thereafter, if the award is not made within the period which is specified in sub-section (1) or the extended period specified in sub-section (3), the mandate of the arbitrator shall terminate unless the court has extended the period either prior to or after the expiry of the period so specified. In other words, the timeline of twelve months for making the award (in matters other than international commercial arbitration), is qualified by the consensual entrustment to the parties under sub-section (3) to extend the period by six months after which the court is empowered in terms of sub-section (4) to extend the period for making the award. The submission of the second respondent is that the provisions of sub-section (3) and sub-section (4) must also apply to an international commercial arbitration. This would merit close scrutiny. The legislature has not expressly excluded the applicability of sub-sections (3) and (4) of Section 29A to an international commercial arbitration. But, at the same time, it must be noticed that the rationale underlying sub-section (3) is to ensure that despite the stipulation of twelve months for the making of an arbitral award in the domestic context, parties may by consent agree to an extension of time by a further period of six months. Such an extension of six months is envisaged in the case of a domestic arbitration since there is a mandate that the award shall be made within a period of twelve months. A further extension has, however, been entrusted to the court in terms of sub-section (4) of Section 29A. However, insofar as an international commercial arbitration is concerned, the statutory regime is clear by the substantive part of sub-section 1 of Section 29A in terms of which the timeline of twelve months for making an arbitral award is not applicable to it. In an international commercial arbitration, the legislature has only indicated that the award should be made as expeditiously as possible and that an endeavour may be made to dispose of the matter within a period of twelve months from the completion of pleadings.
Acts & Sections
s.29A Arbitration and Conciliation Act, 1996s.29A(1) Arbitration and Conciliation Act, 1996s.23(4) Arbitration and Conciliation Act, 1996s.11(6) Arbitration and Conciliation Act, 1996s.2(1)(f) Arbitration and Conciliation Act, 1996s.26 Arbitration and Conciliation (Amendment) Act, 2015Insolvency and Bankruptcy Code, 2016One judgment a day. That's the whole habit.
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