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Exercising Power of Sec. 29A lies with Court which has power vested under Sec.11 of the Act.
Introduction
With Amendment Act 3 of 2016, the legislature added Section 29A to the Arbitration and Conciliation Act, 1996 (“the Act”). The above-mentioned change took effect on October 23, 2015. In the year 2019, Section 29A of the Act was modified once again. The overall consequence of the two modifications is that a time restriction for the conclusion of arbitration proceedings has been established in the case of arbitrations other than International Commercial Arbitration. In its current form, Section 29A of the Act mandates that an arbitral tribunal publish its award within twelve months of the end of pleadings under Section 29A.
Which is the Competent “Court”?
Section 23(4) mandates that the pleading, which includes the statement of claim and defense, be completed within six months of the date the arbitrator, or all arbitrators received written notice of their appointments. Section 29A(3) further provides that, with the permission of the parties, the term for making the award might be extended for a further period of not more than 6 months. The tribunal's mandate will be terminated if the award is not made within one and a half years. The "Court" does, however, have the authority to extend the time limit. One of the most crucial problems that arise is which court has the authority to extend the time for the arbitral panel to make its decision under Section 29A. (4).
The Hon'ble Delhi High Court answered this question in the matter of DDA vs. M/s Tara Chand Sumit Construction Co.,[1] which was resolved on May 12, 2020. The Hon'ble High Court held, after considering the relevant statutory provisions as well as the precedents cited by the parties, that the expression "Court" as used in Section 29A must be read in light of the context as provided in Section 2(1) of the Act, which begins with the phrase "in this part unless the context otherwise requires."
The Hon'ble High Court concluded that, based on Section 29A (4), it is reasonable to assume that the ability to prolong the arbitrator's mandate would be vested in the primary civil court. However, a close examination reveals that such an interpretation would cause confusion and would be contrary to the “Court's” authority under Section 11 of the Act. The Delhi HC then relied on judgments like Nilesh Ramanbhai Patel and Ors. v. Bhanubhai Ramanbhai Patel and Ors.[2] and Cabra Instalaciones Y Servicios, S.A. v. Maharashtra State Electricity Distribution Company Ltd[3], to reach the conclusion that an application under Section 29A of the Act requesting an extension of the arbitrator's mandate should be filed with the Court that has the jurisdiction to appoint the arbitrator under Section 11 of the Act, not the Civil Court.
The Hon'ble Delhi High Court decided that a civil court should not accept an application under Section 29A since the clause allows the court to extend the period for substituting the arbitrator. As a result, if the arbitrator was chosen by the high court, only the high court, not the district court, will have the authority to replace the arbitrator while exercising Section 29A powers. The HC opined that, in International Commercial Arbitration, the power to appoint arbitrator vests with the Supreme Court and High Courts would not be competent to substitute an arbitrator appointed by the Apex Court.
As a result, it was determined that an application under Section 29A would only be heard by the court, which has the authority to appoint an arbitrator. The high court's decision establishes beyond a shadow of a doubt that an application under Section 29A cannot be brought before the district court because it lacks the authority to select the arbitrator.
Conclusion
Therefore, regarding the competency of courts to deal with the application under Sec.29A would never lie before District Courts. In domestic arbitration, Sec.29A applications would lie with High Courts and in international arbitration, the applications under Sec.29A would lie with the Hon’ble Supreme Court.
[1] OMP (MISC.) (COMM) 236/2019.
[2] Misc. Civil Application (O.J.) No. 1 of 2018 in Petition under Arbitration Act No.56 of 2016.
[3] 2019 SCC Online Bom 1437
(This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, or Religion, Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre Foundation shall not be responsible for any errors caused due to human error or otherwise.)
- Introduction
- Which is the
- Conclusion
