The Delhi High Court in a bench, presided over by Justice Sachin Datta, underlined that the essence of Section 29A of the Arbitration and Conciliation Act (A&C Act) is not to constrain the parties or the court from extending the period when it is justified, merely because the petition under Section 29A(4) of the A&C Act was filed a few days after the expiry of the deadline prescribed under Section 29A(1) or Section 29A(3) of the A&C Act.
Brief Facts of the Case:
In the case of O.M.P.(MISC.)(COMM.) 466/2023 & 467/2023, ATC Telecom Infrastructure Private Limited filed two petitions under Section 29A(4) of the Arbitration and Conciliation Act, 1996 (the 'A&C Act'). These petitions sought more time to finish an ongoing arbitration process and to issue the final arbitration decision.
The case started when a Sole Arbitrator was appointed by the court to resolve disputes between the parties based on their contract. The first reference (Arb.P. No. 527/2021) began on May 19, 2021, and the second reference (Arb.P. No. 660/2022) was initiated on May 27, 2022, to address additional issues related to the same contract. As of the time when these petitions were filed, both arbitration processes were at an advanced stage.
The main issue in these petitions was the expiration of the time allowed for completing the arbitration proceedings. The first reference's time limit ran out on August 28, 2023, and the second reference's time limit expired on September 29, 2023. However, both petitions requesting an extension under Section 29A(4) of the A&C Act were submitted on September 26, 2023.
Contentions of the Parties:
ATC Telecom Infrastructure Private Limited argued that the court had the authority to grant an extension even after the time limit had expired. It relied on Section 29A(4) of the A&C Act, which permits the court to extend the period, either before or after it has ended.
On the other hand, Bharat Sanchar Nigam Limited, the respondent, objected to the second petition (O.M.P.(MISC.)(COMM.) 467/2023), stating that it was filed after the first reference's time limit had already expired. It argued that the court couldn't consider the petition under Section 29A(4) of the A&C Act once the arbitrator's authority had ended.
Observations by the Court:
In its analysis, the Court noted that the arbitration proceedings were at an advanced stage, and the arbitrator had conducted the process promptly. The Court ruled that Section 29A does not establish an inflexible outer deadline for the completion of arbitration proceedings and allows for flexibility in extending the period in appropriate situations, benefiting both the contracting parties and the Court.
The Court disagreed with the perspective taken by the Calcutta High Court in the case of Rohan Builders (India) (P) Ltd. v. Berger Paints India Ltd, which held that the arbitrator's mandate ceases upon the expiration of the time limits specified under Section 29A, and it cannot be revisited through a subsequent application. Consequently, the Court found that it was not obligatory for a party to file an application during the subsistence of the specified period.
The Court emphasized that interpreting the requirement to make an application within the said period only would not only contradict the clear language of the Section but also undermine the effectiveness of the arbitral process.
The decision of the Court:
Accordingly, the Court rejected the respondent's objection regarding the maintainability of the application seeking an extension of time, even though it was filed a few days after the expiration of the period established under Section 29A for concluding the arbitral proceedings and issuing the consequent award.
Case Name: ATC Telecom Infrastructure Pvt Ltd v. BSNL
Coram: Hon’ble Mr. Justice Sachin Datta
Case No.: O.M.P.(MISC.)(COMM.) 466/2023
Advocates of the Petitioner: Mr. Piyush Sharma, Mr. Aditya N. Prasad, Mr. Subhoday Banerjee and Mr. Nishank Bhardwaj, Advs.
Advocates of the Respondent: Ms. Leena Tuteja and Ms. Ishita Kadyan, Advs.
Read Judgment @LatestLaws.com
Picture Source :
