Section 29A of the Arbitration and Conciliation Act, 1996 was introduced to ensure that arbitration in India remains efficient. It imposes a fixed time limit for an arbitral tribunal to deliver its award. But does this mean that if the arbitral tribunal fails to meet the provided time frame given, it will automatically end the process of arbitration?
In this case, the Supreme Court was requested to interpret and clarify the scope of Section 29A, particularly the question as to the power of a court to extend time even after the period given in the statute has expired. The decision makes it clear that timelines are always provided to discipline the process, not to destroy it.
The dispute arose because of particularly three agreements to sell between the parties. These differences led to invocation of the arbitration clause. Since the parties could not agree on appointment of an arbitrator, the appellant approached the High Court under Section 11 of the Act.
By order dated 19 April 2022, the High Court appointed a sole arbitrator. The arbitration moved forward, and upon completion of pleadings, the timeline given under Section 29A commenced. The parties later mutually decided to extend the time period in accordance with Section 29A(3), fixing the final deadline for making the award to be 20 February 2024.
Although arguments were concluded, the matter remained reserved, and the award was finally delivered on 11 May 2024, after the extended period had expired. The respondent challenged the award under Section 34 of the Act, arguing that once the mandate had expired, the arbitrator became functus officio and lacked jurisdiction to deliver the award. The appellant, in turn, filed an application under Section 29A seeking extension of the mandate.
The High Court dismissed the extension application of the appellant and allowed the Section 34 petition, setting aside the award on the ground that it had been passed after expiry of the decided timeline. Aggrieved, the appellant approached the Supreme Court.
Legal Issues
Decision
The Supreme Court set aside the High Court’s decision and held that Section 29A must be read in its entirety. While it provides for fixed timelines to ensure efficiency, it also empowers courts to extend these timelines. The provision does not state that such extension must be granted before expiry of the mandate. Therefore, courts have the authority to revive and extend it even after it has technically lapsed.
The Court emphasised that the objective of Section 29A is to prevent any delay, and not to invalidate arbitral proceedings only on technical grounds. If every award delivered by the tribunal after the expiry of the timeline was treated as void, the purpose of arbitration as an effective dispute resolution mechanism would not be fulfilled.
At the same time, the Court clarified that extensions are not to be granted lightly. Courts must examine whether sufficient cause exists and whether the delay is justified.
In restoring the arbitral process, the Supreme Court reaffirmed that procedural timelines must serve justice, not obstruct it.
Case Reference:- Civil Appeal No. (s) of 2026 Arising Out of SLP (C) No.(s). 6551 of 2025 (Before P.S. Narasimha and A.S. Chandurkar, JJ.) C. Velusamy Vs. K. Indhera
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