The insertion of Section 29A in the Arbitration and Conciliation Act, 1996[1] (Act) through the Amending Act 2015, fixes the time limit for completion of arbitral proceedings. The time limit fixed is of 12 months from the date of completion of pleadings. In case if an arbitral award is not made within twelve months from the date the arbitral tribunal enters upon the reference, or within an extended period agreed upon by the parties (not exceeding six months), the mandate of the arbitrator(s) shall terminate. To extend the mandate, Section 29 A (4) of the Act[2] prescribes that the parties must file an application for extension before the Court, which can extend the time limit if sufficient cause is shown.
According to Section 2(1)(e) of the Act,[3] the term “Court” is defined as follows: (i) In the case of an arbitration other than international commercial arbitration, it refers to the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes; (ii) In the case of international commercial arbitration, it refers to the High Court in exercise of its ordinary original civil jurisdiction, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court.[4]
The interpretation of “Court” in this context has led to divergent views among various High Courts in India. The Delhi High Court in the case of DDA v. Tara Chand Sumit Construction Co. 2020 SCC Online Del 2501,[5] held that the term ‘Court’ in Section 29A should be interpreted as the Court which has the power to appoint an arbitrator under Section 11 of the Act.[6] Under Section 11(6) of the Arbitration Act,[7] this power is vested only in the Supreme Court and the High Courts. Contrastingly, the Allahabad High Court in A’Xykno Capital Services Private Ltd. v. State of U.P.[8] held that “the concept of ‘Court’ under Section 29A read with Section 2(1) (e)[9] does not include a High Court without original civil jurisdiction, as in the case of the Allahabad High Court. Therefore, an application under Section 29A should be made only to the Principal Civil Court of original jurisdiction in a district”.
These contrasting views taken by various High courts had created a grey area in respect of the interpretation of definition of ‘Court’ given in the Act. On one hand applications for extension of the mandate of the tribunal were being filed before the Principal Civil Court of original jurisdiction in a district, which is the Commercial Court and on the other hand, various parties approached the High Courts for such applications and in many of the cases, the concerned High Court did not exercise original civil jurisdiction.
Recently, in the case of Chief Engineer (NH) PWD v. M/s BSC & C JV, 2024 SCC Online Megh 284,[10] the issue of jurisdiction under Section 29A(4) of the Arbitration and Conciliation Act, 1996, was examined by the Meghalaya High Court. The Respondent had applied for an extension of the arbitral tribunal’s mandate before the Commercial Court in Shillong. The Petitioner challenged this, arguing that the Commercial Court did not have jurisdiction. However, the Commercial Court upheld its authority to decide on the application.
The Petitioner then appealed to the Meghalaya High Court, which affirmed that the term ‘Court’ under Section 29A refers to the Principal Civil Court of original jurisdiction in a district. The Petitioner further challenged this decision before the Supreme Court in Chief Engineer (NH) PWD v. M/s BSC & C and C JV, Special Leave to Appeal (C) No.10544/2024.[11] The Supreme Court dismissed the appeal, affirming that the ‘Court’ under Section 29A (4) includes the Principal Civil Court of original jurisdiction in a district, and may include a High Court if it has ordinary original civil jurisdiction. Additionally, the Supreme Court clarified that the power to substitute arbitrators under Section 29A (6)[12] should be exercised by the same Court that has the authority to extend the time under Section 29A (4).
The Supreme Court’s decision has streamlined the diverging views taken by various High Courts in interpreting the term ‘Court’ for the purpose of Section 29 A (4) of the Arbitration Act. As arbitration has become a popular and preferred medium of dispute resolution, this decision of the Supreme Court provides the clarity which is necessary for the parties so that the proceeding does not be protracted. However, now a shadow of doubt loom over the cases where the parties have obtained extension under Section 29 A (4) of the Act, from the High Courts which does not exercise Original Civil jurisdiction.
[1] Arbitration and Conciliation Act, 1996, § 29A, No. 26, Acts of Parliament, 1996 (India).
[2] Arbitration and Conciliation Act, 1996, § 29A (4), No. 26, Acts of Parliament, 1996 (India).
[3] Arbitration and Conciliation Act, 1996, § 2 (1) (e), No. 26, Acts of Parliament, 1996 (India).
[4] 1 Dr. P C Markanda, Naresh Markanda, Rajesh Markanda, Law Relating to Arbitration and Conciliation (2020).
[5] DDA v. Tara Chand Sumit Construction Co. 2020 SCC Online Del 2501.
[6] Arbitration and Conciliation Act, 1996, § 11, No. 26, Acts of Parliament, 1996 (India).
[7] Arbitration and Conciliation Act, 1996, § 11 (6), No. 26, Acts of Parliament, 1996 (India).
[8] A’Xykno Capital Services Private Ltd. v. State of U.P., 2023: AHC – LKO: 37194.
[9] Arbitration and Conciliation Act, 1996, § 2 (1) (e), No. 26, Acts of Parliament, 1996 (India).
[10] Chief Engineer (NH) PWD v. M/s BSC & C JV, 2024 SCC Online Megh 284.
[11] Chief Engineer (NH) PWD v. M/s BSC & C and C JV, Special Leave to Appeal (C) No.10544/2024.
[12] Arbitration and Conciliation Act, 1996, § 29A (6), No. 26, Acts of Parliament, 1996 (India).