The Calcutta High Court allowed an application for extension of mandate of an arbitrator after calling the respondent a “slumbering litigant who also made calculated moves to frustrate the arbitration.” The Court highlighted that “Section 29A underlines the distinction between an indifferent litigant who allows the mandate to terminate and a vigilant litigant who makes its best effort to meet the timelines but is caught in the games played by the opponent.”
Brief Facts of the Case:
The petitioner, invoking Section 29A(4) of The Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the 1996 Act'), sought for an extension of the arbitrator's mandate. The Pleadings concluded on 30th September 2022, and the 12-month period, per Section 29A(1) the1996 Act, concluded on 1st October 2023. Relying on Section 12 of The Limitation Act, 1963 and Section 9 of the General Clauses Act, 1897 the petitioner argued that the first day, i.e., 1st October 2023, should be excluded. The application was filed promptly on the next working day, 3rd October 2023.
Contentions of the Respondent:
The respondent opposed the extension asserting that the mandate terminated on 19th August 2023 since this application was filed 1 year after the filing of the Statement of Defence (SoD). The respondent argued that the petitioner's calculation is flawed and that even if 30th September 2023 is considered the completion of the 12-month period, the application was filed beyond statutory timelines. The respondent relied on Section 23(4) of the 1996 Act to determine the completion of pleadings.
Observations by the Court:
The issue for consideration before the High Court was to determine whether the petitioner had filed the application for extension of the mandate of the arbitrator within the timeline prescribed under Section 29A of the 1996 Act.
The High Court stated that the respondent had contended that the petitioner's rejoinder does not form a part of the pleadings under Sections 23(4) and 29A(1) of the 1996 Act, but the Court, considering the respondent's previous admission, disagreed with this. The Court said that the petitioner took steps for extension before the mandate expired and upon scrutinising the respondent's conduct, noted deliberate delays. This weakened the respondent's disavowal, highlighting inconsistency in their stance.
The Court noted that “the respondent failed to file its SoD within the time allowed by the learned arbitrator and filed two applications instead for extension of time for a period of 4 weeks. The High Court stated that the respondent had contended that the petitioner's rejoinder does not form a part of the pleadings, but the Court, considering the respondent's previous admission, disagreed with this. The Court said that the petitioner took steps for extension before the mandate expired and upon scrutinising the respondent's conduct, noted deliberate delays.”
The Court concluded that, despite a nine-day period of ambiguity, the petitioner successfully filed the extension application within the mandate's subsistence, justifying the extension under section 29A(4) of the 1996 Act.
The Decision of the Court:
The Court allows the application, extending the arbitrator's mandate for 6 months from 1st October 2023 to 31st March 2024. In its decision, the Court cited the petitioner's proactive approach and said that “the petitioner took due steps for extension of the mandate before the expiry of the period prescribed under section 29A(1). The present application was filed immediately after the respondent communicated that it was not agreeable to extension under section 29A(3).”
Case Title: Satnam Global Infraprojects Limited vs. Bharat Heavy Electricals Limited
Coram: Hon’ble Justice Moushumi Bhattacharya
Case no.: AP 716 of 2023
Advocates for the Petitioner: Mr. Priyankar Saha, Adv., Mr. Oman Ahmad, Adv., Mr. Vikram Shah, Adv., Mr. Hemant Tiwari, Adv., and Mr. Tuhin Dey, Adv.
Advocate for the Respondent: Mr. Rohit Das, Adv., Ms. Kishwar Rahman, Adv., Ms. Divya Jyoti Tekriwal, Adv., and Ms. Sristi Roy, Adv.
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