The Supreme Court, on Thursday, resolved a contentious issue concerning the extension of an arbitral tribunal’s tenure, ruling that the fixed term for passing an award can indeed be extended even after its initial expiry. This decision addresses previous conflicting judgments from various high courts across the country.
Several high courts, including the Calcutta High Court, had previously interpreted the Arbitration and Conciliation Act, 1996, to mean that applications for extension of an arbitral tribunal’s tenure must be filed before the original term or its extended period concludes. Contrarily, high courts in Delhi, Jammu and Kashmir, Bombay, and Madras had held that parties could seek such extensions even after these periods.
Justices Sanjiv Khanna and R Mahadevan, in their ruling, clarified the legal stance, stating, “We hold that an application for extension of the time period for passing an arbitral award under Section 29A(4) … is maintainable even after the expiry of the twelve-month or the extended six-month period, as the case may be.”
The Supreme Court emphasized the principle of sufficient cause in adjudicating extension applications, urging courts to adopt a practical and pragmatic approach when interpreting statutes. “While interpreting a statute, we must strive to give meaningful life to an enactment or rule and avoid cadaveric consequences that result in unworkable or impracticable scenarios,” Justice Khanna wrote in the judgment.
