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Calcutta HC Provides Clarity on Arbitrator's Mandate Termination under Section 29A of the Arbitration Act

In a recent landmark ruling, the Calcutta High Court elucidated a crucial legal issue pertaining to the termination of an arbitral tribunal's mandate as outlined in Section 29A of the Arbitration & Conciliation Act, 1996. The ruling highlighted that the mandate of an arbitrator concludes under this section unless an extension is applied for and granted during its tenure, making the arbitrator inadmissible de jure.
The Legal Dispute in Focus

The Calcutta High Court addressed a pivotal legal question in three arbitration petitions, all questioning the possibility of extending an arbitrator's mandate under Section 29A(4) of the 1996 Act after its termination. The petitioners sought an extension to allow the arbitrators to make and publish awards, while the respondents opposed the plea. The crux of the matter revolved around the timing of the extension application, which had been filed after the expiration of the award-making period specified in Section 29A(1).

Diverging Legal Arguments

The petitioners argued that an extension request for the arbitrator's mandate could be entertained even after the statutory timeframe outlined in Section 29A(1). They contended that the Court had the authority, under Section 29A(4), to grant an extension before or after the period stipulated in Section 29A(1), provided sufficient cause was substantiated.

On the contrary, the respondents relied on the 176th Law Commission Report and Section 29A of the Arbitration Act, stating that an arbitrator's mandate would automatically terminate if an extension application was not filed within the stipulated period. They emphasized that the legislature's intention was to conclude proceedings if an award was not made within the statutory timeframe, as opposed to suspending the mandate.

The Court's Verdict

The Calcutta High Court meticulously examined Section 29 of the Arbitration Act, underscoring that Section 29A(4) and (5) did not offer additional opportunities for extending an arbitrator's mandate beyond the defined extension periods. The insertion of Section 29A in 2016 mandated specific timelines for award-making, altering the prior flexibility in granting extensions.

The Court emphasized that the word "extend" in Section 29-A(4) implied that the mandate of the tribunal must be active at the time of the extension application. Consequently, filing an application after the mandate had terminated was impermissible under Section 29-A. The Court reiterated the importance of parties taking timely steps to extend the arbitral tribunal's mandate within its subsistence.

The ruling clarified that an extension application for an arbitrator's mandate could only be made while the mandate was in effect, and not after its expiration. The statutory language in Section 29-A(4) clearly denoted the termination of the mandate if the application for extension was not made during its continuation.

Significance of the Ruling

This ruling by the Calcutta High Court holds substantial importance in the realm of arbitration and dispute resolution. It sets a clear precedent regarding the extension of an arbitrator's mandate, emphasizing the need for timely actions to expedite the arbitration process and ensure compliance with statutory timelines set by Section 29A of the Arbitration & Conciliation Act, 1996.

Arbitration is a vital tool for resolving disputes outside traditional court proceedings, ensuring confidentiality, efficiency, and specialized expertise. The strict timelines introduced by Section 29A were aimed at expediting the arbitration process and ensuring the timely resolution of disputes. This ruling reiterates the importance of adhering to these timelines and taking proactive steps to extend the mandate when necessary.

Legal Interpretation and Implications

The Court's interpretation of Section 29A(4) underscores the necessity of following the prescribed legal procedures in arbitration. It clarifies that an extension application can only be filed while the mandate of the tribunal is in effect. This interpretation aligns with the legislative intent of ensuring a streamlined arbitration process and discourages delays.

The ruling also emphasizes the significance of parties being vigilant and proactive in managing their arbitration proceedings. Parties must initiate extension requests in a timely manner, within the stipulated timelines, to maintain the continuity of the arbitral tribunal's mandate. Failure to do so could result in the termination of the mandate and potential delays in the resolution process.

The Calcutta High Court's recent ruling has clarified a crucial aspect of arbitration law, specifically relating to the termination and extension of an arbitrator's mandate under Section 29A of the Arbitration & Conciliation Act, 1996. The ruling underscores the need for parties and arbitrators to adhere to statutory timelines and ensure that extension applications are made within the subsistence of the mandate.

This legal interpretation serves as a guiding light for stakeholders in the arbitration process, reinforcing the importance of timely actions and adherence to the law to achieve efficient and expeditious dispute resolution.

Coram: Justice Moushumi Bhattacharya

Case: Rohan Builders (India) Pvt. Ltd. v Berger Paints India Limited & connected applications