IMPORTANT POINTS
(1) Extension of mandate of Arbitral Tribunal – Court has power and jurisdiction to extend period.
(2) Efficiency in conduct of arbitral proceedings is integral to effectiveness of dispute resolution remedy through arbitration – Efficiency is inextricably connected with expeditious conclusion of arbitral proceedings.

JUDGMENT :

PAMIDIGHANTAM SRI NARASIMHA, J.

1. Leave granted.

2. The short issue in this appeal is whether the application filed by the appellant under Section 29A(4) of the Arbitration and Conciliation Act, 1996¹ [Hereinafter “the Act”] for extension of the mandate of the Arbitral Tribunal ought to have been allowed by the High Court. The text of Section 29A was sufficient for us to come to the conclusion that the Court has the power and jurisdiction to extend the period. Further, in the facts and circumstances of the case, we found that there is ‘sufficient cause’ for the Court to extend the period for making the Award. Thus, we have allowed the appeal and extended the time till 31st December, 2024 to make the Award. In this context, we have also explained the purport of the expression sufficient cause employed in this section.

3. The brief facts are as follows. The appellant entered into a works contract with respondent no. 1. Subsequently when disputes arose, appellant sought resolution through arbitration by issuing a notice on 12.02.2018. Appellant’s application under Section 11 of the Act for appointment of a sole arbitrator was allowed by the High Court by orders dated 08.02.2019 and 15.02.2019.

3.1 After the first meeting of the Arbitral Tribunal on 24.06.2019, parties were given time to complete their pleadings, which were in- fact completed on 09.10.2019. The statutorily stipulated 12-month period under Section 29A(1) for making the award commences from this date, and would expire on 08.10.2020. Further, as the parties can extend this period by another 6 months by mutual consent as per Section 29A(3), upon such mutual extension the time for making the award got extended till 09.04.2021. Therefore, the 18-month period, which commenced from 09.10.2019, would have naturally expired on 09.04.2021.

3.2 However, before the expiry of the said period, in fact even before the first stretch of 12 months, the nation was affected by the COVID pandemic. Taking note of this situation, this Court in Re: Cognizance for Extension of Limitation by order dated 10.01.2022 passed orders declaring that the period between 15.03.2020 and 28.02.2022 shall be excluded in computing periods of limitation under Sections 23(4) and 29(A) of the Act.² [In Re: Cognizance for Extension of Limitation, (2022) 3 SCC 117] The relevant portion of the said order is as under:

“5. Taking into consideration the arguments advanced by the learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of MA No. 21 of 2022 with the following directions:

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5.4. It is further clarified that the period from 15-3-2020 till 28-2-2022 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29-A of the Arbitration and Conciliation Act, 1996, Section 12-A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.”

3.3 Returning to the arbitral proceedings, the Arbitral Tribunal framed issues on 21.11.2019 and posted the matter for arguments for December 2019 and January 2020 but was compelled to adjourn the proceedings due to the pandemic. The record reveals that the proceedings resumed in the year 2022, and in fact, the hearing was concluded on 05.05.2023. It is an admitted fact that the parties to the arbitration agreement have submitted before the Arbitral Tribunal that they would move the Court under Section 29A(4) of the Act for appropriate orders for extension of time for making the award. In furtherance of the undertaking, an application under Section 29A(4) was filed by the appellant before the Gujarat High Court on 01.08.2023.

4. By the order dated 03.11.2023 impugned before us, the H