Section 29A Arbitration Mandate Extension: High Court's Own Appointees Only.

Introduction

In India, arbitration has become a popular dispute settlement process because of its effectiveness, cost-effectiveness, and party autonomy. However, the excessive time in ending processes has been a recurring criticism of arbitration in India. The Arbitration and Conciliation (Amendment) Act, 2015, addressed this issue by introducing Section 29A, which establishes a rigorous deadline for concluding arbitral proceedings and delivering the final verdict. Although it is obvious that the purpose of this clause is to impose a time limit on arbitration, its application has brought up significant jurisdictional issues.

One such question is who has the authority to prolong the arbitrator's mandate after the allotted period under Section 29A has passed. The judiciary has always maintained that the authority to prolong the mandate under Section 29A(4) is limited to the High Court that appointed the arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. According to the Act's framework, the application for an extension must be submitted to the relevant lower court if the arbitrator was not chosen by the High Court.

Understanding Section 29A of the Arbitration Act

The deadline for rendering an arbitral award is specified in Section 29A. Important aspects of the clause include:

• The arbitral tribunal has 12 months from the date the pleadings were completed, as specified in Section 23(4), to render its decision.

• If both parties agree, this time frame may be extended for an additional six months. 

• Unless the parties request an extension from the court under Section 29A(4), the arbitrator's mandate will immediately expire if the award is not made within the extended period. If necessary, the court may set limitations, grant such an extension, or even replace the arbitrator.

The clause requires parties to seek judicial intervention if the deadline is missed, even though it aims to establish discipline in arbitration processes. 

Jurisdiction Under Section 29A (4): A Question of Forum

Section 29A(4) gives "the Court" the authority to prolong the award-making period. However, in this context, what does "the Court" mean? According to the Arbitration Act's Section 2(1)(e), a "Court" is the chief Civil Court with original jurisdiction or the High Court with original jurisdiction over the arbitration's subject matter.

Courts have made a significant distinction on the extension of an arbitrator's mandate, nevertheless, depending on who nominated the arbitrator. If the High Court appointed the arbitrator under Section 11, it still has the authority to consider an application under Section 29A(4). If the arbitrator was chosen in another way, such as by a mutual agreement between the parties or by an arbitral institution, the Commercial Court or Civil Court specified under the Act is the proper court to use. 
In several rulings, this distinction was made clear, guaranteeing that the Act's procedural and hierarchical structure is upheld.

Judicial Interpretation and Key Case Laws

In a number of High Court rulings, the matter has been examined by judges. The Delhi High Court ruled in NHAI v. Gammon Engineers that it lacked authority to consider a Section 29A application if the appointment had not been made by the High Court under Section 11. In Cabra Instalaciones Y Servicios SA v. Maharashtra State Electricity Distribution Co. Ltd., the Bombay High Court adopted a similar stance, ruling that the court that appointed the arbitrator alone has jurisdiction under Section 29A.

Essentially, courts have adopted a stance that strikes a balance between the concept of minimal interference and the necessity of judicial monitoring. The courts have avoided a needless deluge of applications to higher forums by limiting the High Court's jurisdiction to situations in which it designated the arbitrator.

Practical Implications for Litigants and Practitioners

The jurisdictional interpretation of Section 29A(4) has significant practical consequences for parties involved in arbitration. These include:

• Strategic Appointment of Arbitrators: Parties must use Section 11 to request the appointment of arbitrators if they wish the High Court to maintain jurisdiction over the extension of the arbitrator's mandate. 
•  Appropriate Application Forum: Parties must submit any extension applications to the Commercial Court or Civil Court with authority under Section 2(1)(e), not the High Court, if an arbitrator is chosen by mutual consent or institutional regulations.
• Preventing Procedural Lapses: If an application is submitted to the incorrect forum, it may be denied or delayed, which may result in the arbitrator's mandate being terminated. 
•  Managing Arbitration Timelines: Parties and arbitrators need to make sure that deadlines are properly tracked. Without an extension, a delay could make the proceedings null and void, costing credibility, time, and resources.

Conclusion

A progressive clause called Section 29A was created to guarantee the effectiveness of arbitration in India. However, appropriate procedural compliance is directly linked to its efficacy. Clarity in jurisdiction and prevention of abuse of higher forums are ensured by the consistent judicial view that the High Court can only extend the arbitrator's mandate under Section 29A(4) if it made the appointment under Section 11.

The hierarchical balance intended by the Arbitration Act is maintained by this interpretation, which also emphasizes the significance of making strategic decisions during the arbitrator appointment process. It also restates the overarching objective of improving the timeliness, effectiveness, and accountability of arbitration in India. 
In order to safeguard their clients' interests and maintain the process's integrity, practitioners of arbitration in India need to be aware of these procedural subtleties as the practice develops.

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Disclaimer: Every effort has been made to avoid errors or omissions in this material in spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition In no event the author shall be liable for any direct indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information Many sources have been considered including Newspapers, Journals, Bare Acts, Case Materials , Charted Secretary, Research Papers etc

Prerna Yadav

LegalMantra.Net Team