Supreme Court of India· 05 January 2023

Whether the amended Section 29A of the Arbitration and Conciliation Act, 1996 would apply prospectively or retrospectively?

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

It applies to pending proceedings. The 2019 Amendment Act contains no provision equivalent to Section 26 of Act 3 of 2016 evincing a legislative intent making the application of the amended provision prospective. The amended provision is remedial in nature, carving international commercial arbitrations out of the rigour of the timeline, and its removal of the mandatory time limit does not confer any rights or liabilities on any party. Since Section 29A(1), as amended, is remedial in nature, it should be applicable to all pending arbitral proceedings as on the effective date, 30 August 2019.

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 34The 2019 Amendment Act does not contain any provision equivalent to Section 26 of Act 3 of 2016 evincing a legislative intent making the application of the amended provision prospective. The amended provisions of Section 29A, in terms of which the arbitral tribunal has to endeavour to dispose of the proceedings in an international commercial arbitration as expeditiously as possible within a period of twelve months from the completion of the pleadings are remedial in nature. The amended provision has excepted international commercial arbitrations from the mandate of the twelve- month timeline which governs domestic arbitrations. The amendment is intended to meet the criticism over the timeline in its application to international commercial arbitrations. The amendment is remedial in that it carves out international commercial arbitrations from the rigour of the timeline of six months. This lies within the domain of the arbitrator and is outside the purview of judicial intervention. The removal of the mandatory time limit for making an arbitral award in the case of an international commercial arbitration does not confer any rights or liabilities on any party. Since Section 29A(1), as amended, is remedial in nature, it should be applicable to all pending arbitral proceedings as on the effective date i.e., 30 August 2019.

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

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?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?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