Introduction:
The Hon'ble Supreme Court of India in Rohan Builders (India) Pvt. Ltd. vs Berger Paints India Ltd. (Civil Appeal No. 23320 of 2023 arising from Special Leave Petition (Civil) No. 23320 of 2023) addressed the issue of whether an application for the extension of mandate under Section 29A of the Arbitration and Conciliation Act 1996 could be entertained after the period for making an arbitral award had expired. The Calcutta High Court previously ruled that such an application must be filed before the expiry of the arbitral tribunal’s mandate. However, other High Courts such as Delhi, Bombay, Kerala, and Madras had adopted an alternative stance, allowing such applications post-expiry.

Key Findings of the Supreme Court
The High Court of Calcutta in Rohan Builders (India) Pvt. Ltd. vs Berger Paints India Ltd. held that such an application could not be entertained after the expiry of the arbitral tribunal’s mandate. Against the order of the Calcutta High Court the petitioners had preferred an SLP which was then converted into a Civil Appeal. The Hon’ble Supreme Court while deciding the matter referred to the conflicting views and accepted the reasoning of the High Courts that supported a broader interpretation of Section 29A. The Supreme Court clarified that:

• Section 29A(4) empowers the court to extend the time for making an arbitral award, even if the application is filed after the expiration of the original or extended mandate.
• The term "terminate" used in the provision should not be interpreted strictly, as it would lead to impractical consequences. Instead, the Court interpreted the word in a conditional sense, making it dependent on whether or not an extension application is filed.
• The Court’s discretion to extend time, as provided by Section 29A(5), is based on the existence of sufficient cause, ensuring that frivolous or vexatious applications are not entertained.

Conclusion
The Supreme Court traced the legislative history of Section 29A noting that the introduction of time limits for arbitral awards was aimed to curb delays in arbitration. However, the provision also includes safeguards, allowing the court to step in and prevent the termination of proceedings when there is sufficient cause for delay. The Court also referred to the Law Commission of India’s 176th Report which had recommended that the arbitral tribunal’s mandate be suspended rather than terminated in such situations.

The Supreme Court in paragraph 15 of its judgment further held that the Calcutta High Court’s judgment in Rohan Builders (India) Pvt. Ltd. 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. The Supreme Court further noted that 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 conditions while granting an extension. Delay, even on the part of the arbitral tribunal, is not countenanced. The first proviso to Section 29A(4) permits a fee reduction of up to five percent for each month of delay attributable to the arbitral tribunal.

The Supreme Court finally held that an application for extension of the time period for passing an arbitral award under Section 29A(4) read with Section 29A(5) is maintainable even after the expiry of the twelve-month or the extended six-month period, as the case may be. The court while adjudicating such extension applications will be guided by the principle of sufficient cause and our observations in paragraph 15 of the judgment ¹.

By - Chaitanyaa Bhandarkar