Supreme Court of India· 05 January 2023

Under the Arbitration and Conciliation Act, 1996, does the twelve-month timeline in Section 29A(1) apply to an international commercial arbitration after the 2019 Amendment?

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

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Answer

No. The expression "in matters other than an international commercial arbitration" makes it abundantly clear that the timeline of twelve months stipulated in the substantive part of Section 29A(1), as amended, does not apply to international commercial arbitrations. The proviso requires only that the award "may be made as expeditiously as possible" and that an "endeavour may be made" to dispose of the matter within twelve months from the completion of pleadings. The twelve-month period is therefore only directory in nature for an international commercial arbitration.

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 25After the amendment, Section 29A(1) stipulates that 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 the completion of the pleadings under Section 23(4).[^10] The expression “in matters other than an international commercial arbitration” makes it abundantly clear that the timeline of twelve months which is stipulated in the substantive part of Section 29A(1), as amended, does not apply to international commercial arbitrations. This is further reaffirmed in the proviso to Section 29A(1) which stipulates that the award in the matter of an international commercial arbitration “may be made as expeditiously as possible” and that an “endeavour may be made to dispose of the matter within a period of 12 months” from the date of the completion of pleadings. The expression “as expeditiously as possible” coupled with the expression “endeavour may be made” demonstrate that the intent of Parliament is that the period of twelve months for making the award is not mandatory in the case of an international commercial arbitration. In an international commercial arbitration, the arbitral tribunal is required to endeavour, that is, make an effort to render the arbitral award within a period of twelve months or in a timely manner. In a domestic arbitration, Section 29A(1) stipulates a mandatory period of twelve months for the arbitrator to render the arbitral award. In contrast, the substantive part of Section 29A(1) clarifies that the period of twelve months would not be mandatory for an international commercial arbitration. Hence, post amendment, the time limit of twelve months as prescribed in Section 29A is applicable to only domestic arbitrations and the twelve-month period is only directory in nature for an international commercial arbitration.

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, 2016

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Also decided in this judgment

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?Whether the amended Section 29A of the Arbitration and Conciliation Act, 1996 would apply prospectively or retrospectively?In an international commercial arbitration, is a further extension of time for making the award within the arbitrator's own domain and jurisdiction?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Supreme Court of India. Corrections