The Hon’ble Delhi High Court ruled that Section 29A(4) contemplates two situations i.e., one where the mandate is not extended and the time of 12 months has expired as per Section 29 (1) or second where the mandate has been extended for a further six months by consent of parties under Section 29 (3).
It was opined that In either situation, the Court has the power to extend the mandate of the Arbitral Tribunal. The consent of parties is only contemplated under Section 29A (3) and not under Section 29A(4).
Brief Facts:
The 4 petitions raise issue regarding interpretation of Section 29A of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘A & C Act’).
Brief Background:
1. O.M.P.(MISC.) (COMM.) 426/2023
As per the Petitioner, the project was completed however payments due were not paid by the Respondents. Therefore, Arbitration was invoked.
Shortly after issues were framed, Respondent (IICL) entered into insolvency, and a moratorium was imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016.
Since, tribunal’s mandate expired after leading of evidence, consent for extension was not obtained and hence, Arbitral Tribunal's mandate had effectively ended.
The Petitioner sought the consent of IICL’s Liquidator for a six-month extension of the Arbitral Tribunal's mandate under Section 29A(3) of the 1996 Act. However, as per the petition, the IICL did not reply to their request. Hence the present petition, seeking extension of the mandate of the Tribunal in terms of Section 29A(4) of the A&C Act.
Similar facts in other three petitions.
Contentions of the Petitioner:
It was submitted that the scheme of Section 29A (4) does not require the consent of all parties for the Court to extend the mandate of the Arbitral Tribunal.
Observations of the Court:
The Court listed out the possibilities of different scenarios under Section 29A (4):
1. Under Section 29A(1), the award in all arbitration matters except international commercial arbitration matters is to be made within 12 months from the date of completion of pleadings under Section 23(4).
2. Under Section 29A(2), if the award is made within six months, the Arbitral Tribunal is given an incentive of payment of additional fee. Section 29A(2) would have no application in the present case.
3. Under Section 29A(3) the parties, by consent can extend the period of 12 months by another six months i.e. the mandate would be valid for a period of 18 months.
4. Section 29A(4) however, contemplates two situations i.e.,
- where the mandate is not extended and the time of 12 months has expired as per Section 29 (1) or
- where the mandate has been extended for a further six months by consent of parties under Section 29 (3).
It was opined that In either situation, the Court has the power to extend the mandate of the Arbitral Tribunal. The consent of parties is only contemplated under Section 29A (3) and not under Section 29A(4).
The decision of the Court:
Based on the aforementioned reasoning, the Court accordingly allowed the petitions and extended the mandate of the Arbitral Tribunal.
Case Title: Larsen And Toubro Limited v. IIC Limited & Anr. with other connected matter
Case No.: O.M.P.(MISC.)(COMM.) 426/2023 with other connected matter
Coram: Hon'ble Ms. Justice Prathiba M. Singh
Advocates for Petitioners: Advs Mr. J. P. Singh, Mr. Subhash Gulati, Mr. Shashank Sharma,
Advocates for Respondents: Advs. Mr. Rajat Navet, Mr. Shashi Kant, Mr. Kushagra Pandit, Mr. Harshpal Singh Negi, Mr. Utkarsh Singh, Mr. Abhishek Anand, Mr. Sikhar Tiwari
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