Arbitration In IndiaMandate of an Arbitral Tribunal can be extended even after the expiry of Statutory Limit

The Delhi High Court in  “PSA Protech and Infralogistics Pvt. Ltd. Vs. Food Corporation of India” [O.M.P.(MISC.) (COMM.) 517/2023] held that the mandate of an Arbitral Tribunal can be extended even after the expiry of statutory limit for completion of Arbitral proceedings.

FACTS

PSA Protech and Infralogistics Pvt. Ltd. (hereinafter referred to as “the Petitioner”), has filed an application for seeking an extension of time for the completion  of arbitral proceedings against Food Corporation of India (hereinafter referred to as “the Respondent”) The statutory period of 12 months in terms of Rule 24A (1) of the International Centre for Alternative Dispute Resolution expired on 13.12.2019.

The Arbitral Tribunal vide order dated 23.11.2019, extended the mandate for a period of 6 months. Further due to Covid 19, the Hon’ble Supreme Court excluded the period of limitation till 15.03.2020. The benefit of the exclusion expired on 04.10.2023, however, the Arbitral Tribunal listed the proceedings on 18.02.2024.

Therefore, the Petitioner has filed the present application for extension of time period under Section 29A of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “A&C Act”)

ISSUES BEFORE THE DELHI HIGH COURT

1. Whether an application under Section 29A of the A&C Act can be allowed post expiry of the mandate of the Arbitral Tribunal?

CONTENTIONS OF THE PARTIES

The Petitioner contended that the statutory timeline for completion of arbitration proceedings can be extended under Section 29A of the A&C Act. It was also argued that the Petitioner had approached for extension soon after the expiry of the period.

The  Respondent contended that the mandate of the arbitral Tribunal can be extended only when sufficient cause is shown under Section 29A(5) of the A&C Act. The Respondent relied upon Skylark Cagers Inida Pvt. Ltd. VS. Institute of Liver and Biliary Science [(2023) SSC OnLine Del 1276] and argued that the Petitioner was not present on various video conference hearings and hence, the extension cannot be provided for the completion of Arbitration proceedings.

DECISION AND FINDINGS

The Delhi High Court observed that both the parties were participating in the Arbitral proceedings and the Arbitral Tribunal had provided date of next hearing even after the expiry of mandate of the Arbitral Tribunal.

The High Court relied upon Ats Infrastructure Ltd. And Anr. Vs. Rasbehari, [O.M.P. (T) (COMM.) 91/2023] and “Rohan Builders (India) (P) Ltd. vs. Berger Paints India Limited” [(2023) SCC OnLine Cal 2645] and held that the mandate of Arbitral Tribunal can be extended even after its expiry.

The High Court extended the mandate of the Arbitral Tribunal and directed for completion of the Arbitral proceedings within 3 months.

AMLEGALS REMARKS

The Delhi High Court in the present case observed the participation of both the parties in the arbitration proceedings. Moreover, due to mistake of the Arbitral Tribunal, the proceedings continued without extension of mandate. It was concluded that the mandate can be extended under Section 29A of the A&C Act.

The High Court has upheld the legislative intent of party autonomy and the decision of both the parties to carry on the proceedings, but also directed the Arbitral Tribunal to complete the proceedings in a time bound manner.

– Team AMLEGALS assisted by Mr. Utsav Sheth (Intern)