TaxTMI 
TaxTMI 
2024 (11) TMI 1111
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....ws. 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 expire on 08.10.2020. Further, as the parties can extend this period by another 6 months by mutual consent as per Section 29A(3), upon such mutual extension the time for making the award got extended till 09.04.2021. Therefore, the 18-month period, which commenced from 09.10.2019, would have naturally expired on 09.04.2021. 3.2 However, before the expiry of the said period, in fact even before the first stretch of 12 months, the nation was affected by the COVID pandemic. Taking note of this situation, this Court in Re: Cognizance for Extension of Limitation....
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....od 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 determining the date on which the Tribunal's mandate stood terminated. Further, he submits that the respondent had agreed to apply for extension of time before the Arbitral Tribunal, as is recorded in the Minutes of Arbitral Meeting dated 05.05.2023. 5.2 Mr. Vikramjit Banerjee, ASG, submits that even if the benefit of this Court's order is considered, the Tribunal's mandate expired on 31.10.2022, and there is still a nine-month delay in filing the application. Further, placing reliance on a recent decision of this Court in Rohan Builders (....
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....er 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 will terminate, unless the court either prior or after the expiry of the period, extends it. The wording of subsection (4) clearly and explicitly enables a court to extend the Tribunal's mandate after expiry of the statutory and extendable period of 18 months. 9. This Court in Rohan Builders (supra) 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). Rohan Builders (supra), para 6 Even if sub-section (4) provides for the term....
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.... 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. However, it is apposite to note that under Section 29A(5), the power of the court to extend the time is to be exercised only in cases where there is sufficient cause for such extension. Such extension is not granted mechanically on filing of the application. The judicial discretion of the court in terms of the enactment acts as a deterrent against any party abusing the process of law or espousing a frivolous or vexatious application. Further, the court can impose terms and cond....
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....hat 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 statute incorporates party autonomy even with respect to the conduct and conclusion of arbitral proceedings, there is a statutory recognition of the power of the Court to step in wherever it is necessary to ensure that the process of resolution of the dispute is taken to its logical end, if according to the Court, the circumstances so warrant. It is in this context that the Arbitration and Conciliation Act adopts the well-known language of limitation statutes and provides....