The Supreme Court of India has held that a Court can entertain an application under Section 29A(5) of the Arbitration and Conciliation Act, 1996 to extend the mandate of an arbitrator, even if an award has already been rendered after the expiry of the statutory time limit.
A Bench comprising Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar set aside a Madras High Court order which had held that an application for extension was not maintainable once an award—albeit a “nullity”—had been passed. The Apex Court clarified that the power of the Court to extend the mandate is “not impaired by the indiscretion of the arbitrator in rendering an ‘award’ without a mandate.”
Background of the Case
The dispute arose from three agreements to sell between the appellant, C. Velusamy, and the respondent, K. Indhera. On April 19, 2022, the High Court appointed a sole arbitrator. The pleadings were completed on August 20, 2022, marking the commencement of the twelve-month period under Section 29A(1) of the 1996 Act.
The parties subsequently extended the mandate by six months by consent, with the period ending on February 20, 2024. Although arguments were concluded and the matter was reserved for the award, proceedings were reopened due to settlement talks. The mandate expired on February 20, 2024, but the arbitrator continued with the proceedings and eventually passed the award on May 11, 2024.
Aggrieved, the respondent filed an application under Section 34 of the Act to set aside the award on the ground that the mandate had expired. Conversely, the appellant filed an application under Section 29A on November 12, 2024, seeking an extension of the mandate. The High Court dismissed the Section 29A application as not maintainable, relying on the reasoning that an award passed after the expiry of the mandate is a nullity and the Court cannot extend time post-award.
Submissions of the Parties
Mrs. V Mohana, learned Senior Counsel for the appellant, relied on the Supreme Court’s decision in Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd. (2024), contending that an application under Section 29A is maintainable even after the expiry of the prescribed period. She argued that the Court retains the power to extend the mandate either before or after the expiry of the period under Sections 29A(1) and 29A(3).
Mr. M. Vijayan, learned counsel for the respondent, distinguished Rohan Builders, arguing that it did not cover situations where an award had already been passed. He relied on the Madras High Court judgment in Suryadev Alloys & Power Private Ltd. v. Sh. Govindaraja Textiles Pvt. Ltd., which held that there is no provision empowering the Court to enlarge time after the award is made and that such an award is a nullity.
Court’s Analysis and Observations
The Supreme Court examined the text and context of Section 29A, the legislative intent, and international perspectives on arbitral timelines.
On Section 29A and Court’s Jurisdiction: The Court observed that Section 29A does not explicitly bar an application for extension in the event of the delivery of an award. The Bench stated:
“We have considered the text as well as the context in which Parliament introduced Section 29A to the Act, empowering the Court to extend the mandate of the arbitrator. The power and the jurisdiction of the Court are not impaired by the indiscretion of the arbitrator in rendering an ‘award’ without a mandate, particularly when such an award does not partake the character of a decree and is unenforceable under Section 36.”
On the Nature of a Post-Mandate Award: The Court acknowledged that an award made after the expiry of the mandate is “non est” or, more accurately, “unenforceable under Section 36.” However, the Court emphasized that this “indiscretion of the arbitrator” does not denude the Court of its jurisdiction.
“We have more hesitation in concluding that the Parliament has never intended that the act of an arbitrator in delivering an award when the mandate had expired would denude the power and jurisdiction vested in the Court.”
Reaffirming Rohan Builders: Approving the observations made in Rohan Builders, the Court reiterated that the expression “terminate” in Section 29A(4) is not absolute but is subject to the Court’s power to extend the period. The Court noted that the termination is “transitory and is subject to the exercise of power by the Court.”
International Perspective: The judgment referenced the English Arbitration Act and international cases such as Oakland Metal Co Ltd. v. D. Benaim & Co. Ld. and Alphamix Ltd v District Council of Rivière du Rempart, noting that courts in other jurisdictions often retain discretion to extend time retroactively to prevent arbitration from being defeated by technical non-compliance.
Balancing Efficiency and Justice: The Bench highlighted that the Court plays an important role in balancing the interests of securing a remedy and ensuring integrity in conduct. The Court listed the “empowerments” available under Section 29A, including the power to reduce the arbitrator’s fees, impose exemplary costs, or substitute the arbitrator if necessary.
Conclusion and Decision
The Supreme Court concluded that provisions of the Act must not be interpreted to infer a threshold bar for a Section 29A(5) application merely because an award was passed.
The Court held:
“In conclusion, we hold that an application under Section 29A(5) for extension of the mandate of the arbitrator is maintainable even after the expiry of the time under Sections 29A(1) and (3) and even after rendering of an award during that time. Such an award is ineffective and unenforceable. But the power of the court to consider extension is not impaired by such an indiscretion of the arbitrator.”
The Court further directed that if the mandate is extended, “the arbitral tribunal will pick up the thread from where it was left, and seamlessly continue the proceeding from the stage at which the mandate had expired, and conclude within the time granted.”
The appeal was allowed, the High Court’s order dated January 24, 2025, was set aside, and the application for extension was restored to the High Court for disposal in accordance with the principles laid down in the judgment.
Case Details:
- Case Title: C. Velusamy v. K. Indhera
- Case No.: Civil Appeal No. OF 2026 (Arising out of SLP (C) No. 6551 of 2025)
- Coram: Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar
