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TMI Blog2024 (11) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the statutory and extendable period of 18 months. The issue is no longer res integra in view of a recent decision of this Court in Rohan Builders [ 2024 (10) TMI 1393 - SUPREME COURT (LB) ] The case squarely covers the issue against him - This Court in Rohan Builders has held that the application for extension of time can be filed even after the expiry of the period in sub-sections (1) and (3). Even if sub-section (4) provides for the termination of the Tribunal s mandate on the expiry of the period, it recognises party autonomy to move an application before the Court for further extension. Thus, the termination of mandate under the provision is only conditional on the non-filing of an extension application, and cannot be taken to mean that the mandate cannot be extended once it expires. The wording of Section 29A(4) and the decision in Rohan Builders clearly answer the first issue in favour of the appellant, i.e., an application for extension can be filed either before or after the termination of the Tribunal s mandate upon expiry of the statutory and extendable period. Whether an extension of time should be granted in the present case? - HELD THAT:- As per Section 29A(5), th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed by the High Court. The text of Section 29A was sufficient for us to come to the conclusion that the Court has the power and jurisdiction to extend the period. Further, in the facts and circumstances of the case, we found that there is sufficient cause for the Court to extend the period for making the Award. Thus, we have allowed the appeal and extended the time till 31st December, 2024 to make the Award. In this context, we have also explained the purport of the expression sufficient cause employed in this section. 3. The brief facts are as follows. The appellant entered into a works contract with respondent no. 1. Subsequently when disputes arose, appellant sought resolution through arbitration by issuing a notice on 12.02.2018. Appellant s application under Section 11 of the Act for appointment of a sole arbitrator was allowed by the High Court by orders dated 08.02.2019 and 15.02.2019. 3.1 After the first meeting of the Arbitral Tribunal on 24.06.2019, parties were given time to complete their pleadings, which were infact completed on 09.10.2019. The statutorily stipulated 12-month period under Section 29A(1) for making the award commences from this date, and would expi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at High Court on 01.08.2023. 4. By the order dated 03.11.2023 impugned before us, the High Court dismissed the application. The High Court reasoned that the initial statutory period of 12 months expired on 08.10.2020, and the same was extended by the mutual consent of the parties till 09.04.2021. Noting that the application for extension was preferred only in August 2023, High Court held that there is no explanation for a delay of more than 2 years, 4 months in approaching it. The High Court held that the mandate of the Arbitral Tribunal stood terminated on 09.04.2021, at which point there was not even an application for extension of time pending before it. In this view of the matter, the application was found to be misconceived, and was dismissed by the order impugned before us. 5. We have heard Mr. Gaurav Agrawal, learned senior counsel for the appellant, and Mr. Vikramjit Banerjee, learned ASG for the respondents. 5.1 Relying on this Court s declaration Re: Cognizance for Extension of Limitation dated 10.01.2022 extending limitation on account of the pandemic, ibid Mr. Agrawal submits that the High Court ought to have excluded the period between 15.03.2020 and 28.02.2022 while d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder sub-section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period: Provided that while extending the period under this subsection, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent. For each month of such delay: Provided further that where an application under sub-section (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application: Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced. (5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court. ( emphasis supplied ) 8. The effect of the provision is that if the arbitral award is not made within 12 months from when the pleadings are completed, extendable by a further 6 months by mutual consent of parties, the Tribunal s mandate wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time is an exercise of discretion by the court and must be done on sufficient cause being shown, and on such terms and conditions that the court deems fit. ibid, para 15 This Court, in Rohan Builders (supra), has held: 14. In our opinion, a restrictive interpretation would lead to rigour, impediments and complexities. A party would have to rush to the court even when the period of arbitral mandate of twelve months has not expired, notwithstanding the possibility of a consent-based extension of six months under Section 29A(3). Narrow interpretation presents an additional challenge by relegating a faultless party to a fresh reference or appointment of an arbitrator under the A C Act, 2015, thereby impeding arbitration rather than facilitating it. The legislature vide the 2015 Amendment envisions arbitration as a litigant-centric process by expediting disposal of cases and reducing the cost of litigation. A narrow interpretation will be counterproductive . 15. Rohan Builders (India) Pvt. Ltd. (supra) highlights that an interpretation allowing an extension application post the expiry period would encourage rogue litigants and render the timeline for making the award inconsequential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 14. We will have to consider if there is sufficient cause for not filing the application before 31.03.2023. In the application for extension, the appellant has submitted that the reasons for extension of time are as follows: (i) the Arbitral Tribunal proceeded with online hearings in 2022, but was required to adjourn the proceedings on several occasions at the request of the respondents counsel as the panel from which the arbitrator was appointed had been changed. (ii) That the dispute involved technical and legal questions, and the record of the case is bulky. (iii) That the delay is neither attributable to the parties, nor to the Arbitral Tribunal, who have acted in a prompt and cautious manner. (iv) The hearing is complete, and only the award needs to be declared, thereby leading to hardship to the parties if the time for making the award is not extended. On these grounds, the appellant prayed for a onemonth extension under Section 29A(4). 15. Efficiency in the conduct of arbitral proceedings is integral to the effectiveness of the dispute resolution remedy through arbitration. Efficiency is inextricably connected with expeditious conclusion of arbitral proceedings. While the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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