The Supreme Court has authoritatively settled a significant question of law regarding the jurisdiction of Courts to extend the mandate of an Arbitral Tribunal under Section 29A of the Arbitration and Conciliation Act, 1996. The Court held that an application for the extension of time for making an arbitral award lies before the “Court” as defined in Section 2(1)(e) of the Act—typically the Principal Civil Court of original jurisdiction—even in cases where the Arbitral Tribunal was constituted by the High Court under Section 11(6).
A Bench comprising Justice Pamidighantam Sri Narasimha and Justice R. Mahadevan set aside the judgment of the High Court of Bombay at Goa, which had held that if an arbitrator is appointed by the High Court, the application for extension must also lie before the High Court.
The primary question before the Supreme Court was framed as follows: “If an arbitral tribunal – appointed by the High Court or by the parties concerned – does not complete proceedings within the required or extended time limit, can an application to extend time under Section 29A of the Act can be filed before the High Court or the Civil Court?”
Background of the Case
The dispute arose from a Memorandum of Family Settlement (MFS) executed between members of the ‘Chowgule’ family. Arbitration was invoked under the MFS.
- On August 5, 2023, Respondent No. 2 filed an application for extension under Section 29A before the Commercial Court.
- Subsequently, due to the resignation of the presiding arbitrator, the High Court appointed an arbitrator under Section 11 on October 31, 2023.
- The Commercial Court allowed the Section 29A application on January 2, 2024.
- Respondent No. 1 challenged this before the High Court, arguing the Commercial Court lacked jurisdiction due to the High Court’s appointment of the arbitrator.
A Single Judge of the High Court referred the matter to a Division Bench. The Division Bench held that in domestic arbitrations where the Tribunal is constituted by the High Court under Section 11(6), an application under Section 29A(4) would lie to the High Court. Consequently, the Single Judge quashed the Commercial Court’s order. The appellant approached the Supreme Court challenging this view.
Divergent Views of High Courts
The Supreme Court noted two conflicting streams of High Court judgments:
- Stream A (Upheld): Courts including the Allahabad and Andhra Pradesh High Courts held that ‘Court’ in Section 29A refers to the Court defined in Section 2(1)(e), irrespective of whether the appointment was made under Section 11.
- Stream B (Rejected): Courts including Gujarat, Bombay, Delhi, and Calcutta High Courts adopted a “contextual” interpretation. They reasoned that a Civil Court, being inferior to the High Court, should not extend the mandate or substitute an arbitrator appointed by the High Court, citing potential “jurisdictional anomaly” or “conflict of power.”
Supreme Court’s Analysis
1. Jurisdiction under Section 11 is Limited The Apex Court emphasized that the power of the High Court or Supreme Court under Section 11 is “special and limited” to the appointment of arbitrators. Citing SBP and Co. v. Patel Engineering Ltd. (2005) and State of Jharkhand v. Hindustan Construction Co. Ltd. (2018), the Court reiterated that once the appointment is made, the referral Court becomes functus officio.
The Court observed: “It is a misconception to assume that the Supreme Court or the High Court keeps a watch on the Conduct of Arbitral Proceedings or on Making of the Arbitral Award like the Orwell’s ‘Big Brother is watching you’. The referral Court becomes functus officio once appointment has been made, it has no role or function as a Subjudice Sentinel.”
2. Text and Context of Section 29A The Bench analyzed the scheme of the Act, noting that Section 29A is located in the chapter dealing with the conduct of proceedings and making of awards, distinct from the appointment process. The Court held that the expression “Court” in Section 29A(4) and 29A(6) (regarding substitution of arbitrators) must be guided by the definition in Section 2(1)(e).
3. Rejection of Hierarchy and Status Arguments The Court explicitly rejected the reasoning that a Civil Court cannot entertain Section 29A applications due to “hierarchical difficulties” or “conflict of power.” Relying on A.R. Antulay v. R.S. Nayak (1988), the Bench stated: “We have no hesitation in holding that interpretation based on a perception of status or hierarchy of Courts is opposed to the fundamental conception of rule of law… Law, and law alone is the source of power.”
4. Section 2(1)(e) Definition is Exhaustive Citing State of West Bengal v. Associated Contractors (2015) and Nimet Resources Inc. v. Essar Steels Ltd. (2009), the Court affirmed that Section 2(1)(e) contains an exhaustive definition. Unless the context strictly requires otherwise, “Court” means the Principal Civil Court of original jurisdiction (or the High Court only if it exercises ordinary original civil jurisdiction).
The Court clarified: “The extension of mandate or substitution of an arbitrator under Section 29A does not partake the character of ‘appointment’ under Section 11, but is a measure designed to ensure timely conclusion of arbitration. Absence of any contextual indicia to the contrary, the expression ‘Court’ in Section 29A must, therefore, be accorded the meaning assigned to it under Section 2(1)(e).”
5. Applicability of Section 42 The Court also addressed Section 42 (Jurisdiction), affirming that applications under Section 11 are not made to a “Court” as defined in the Act, but to the Chief Justice or their designate (now the Court). Therefore, Section 42 does not apply to Section 11 proceedings, and subsequent applications need not be filed in the High Court solely because the appointment was made there.
Decision
The Supreme Court allowed the appeals and held that the Commercial Court had the correct jurisdiction.
- The reference of the Division Bench of the High Court of Bombay at Goa was set aside.
- The judgment of the Single Judge dated August 21, 2024, was set aside.
- The order of the Commercial Court dated January 2, 2024, extending the time, was restored.
The Court granted liberty to the parties to move the Commercial Court for any further extension under Section 29A(5).
Case Details:
Case Title: Jagdeep Chowgule v. Sheela Chowgule & Ors.
Case No.: Civil Appeal No. of 2026 (Arising out of SLP (C) No. 10944-10945 of 2025)
Coram: Justice Pamidighantam Sri Narasimha and Justice R. Mahadevan
