Arbitral mandate extension under section 29A(5) granted despite insolvency-related objections to the Resolution Professional's petition.

In proceedings under section 29A(5) of the Arbitration and Conciliation Act, the Delhi High Court rejected the maintainability objection to a Resolution Professional's petition, holding that it was unnecessary to decide the wider insolvency-related controversy at that stage and that no provision shown barred the filing. As the arbitration was still pending, the tribunal's mandate had expired, and no sustainable ground was shown to refuse relief, the Court extended the arbitral tribunal's mandate. Collateral questions concerning the insolvency process, the Resolution Professional's authority, and the effect of NCLT or NCLAT orders were left open for determination in the appropriate forum.

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Issues: (i) whether the petition filed by the Resolution Professional was maintainable; and (ii) whether the mandate of the arbitral tribunal should be extended under section 29A(5) of the Arbitration and Conciliation Act, 1996.

Issue (i): whether the petition filed by the Resolution Professional was maintainable.

Analysis: The objection to maintainability was founded on the corporate insolvency regime and on the contention that the Resolution Professional lacked authority to institute the petition. The Court held that it was unnecessary, in proceedings under section 29A(5), to enter into the wider controversy regarding the Resolution Professional's status or the effect of the insolvency proceedings. On the face of the record, the petition could not be rejected as not maintainable. The Court also held that the Resolution Professional's authority was not shown to be excluded by any provision of the insolvency invoked.

Conclusion: The maintainability objection was rejected, in favour of the petitioner.

Issue (ii): whether the mandate of the arbitral tribunal should be extended under section 29A(5) of the Arbitration and Conciliation Act, 1996.

Analysis: The arbitral proceedings were undisputedly pending and the mandate of the tribunal had expired. No other sustainable ground was shown to deny extension. The Court held that questions concerning the impact of the insolvency proceedings, the status of the Resolution Professional, and the effect of the NCLT or NCLAT orders were matters better left to the arbitral tribunal and did not bar relief under section 29A(5). In view of the continuing arbitration and absence of a decisive objection, extension was warranted.

Conclusion: The mandate of the arbitral tribunal was extended by 12 months with effect from 8 September 2020, in favour of the petitioner.

Final Conclusion: The petition succeeded and the arbitral tribunal was permitted to continue for the extended period, while issues concerning the insolvency process and the resolution professional's authority were left open for determination in the appropriate forum.

Ratio Decidendi: In proceedings under section 29A(5), the Court may extend the mandate of the arbitral tribunal where the arbitration remains pending and no sustainable ground is shown to deny extension, while collateral disputes concerning insolvency-related authority are left open for decision in the appropriate forum.

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