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SUPREME COURT OF INDIA
PAMIDIGHANTAM SRI NARASIMHA, ATUL S. CHANDURKAR, JJ.
C. Velusamy – Appellant
Versus
K. Indhera – Respondent
Civil Appeal No(s). 696 of 2026 Arising out of SLP (C) No(s). 6551 of 2025
Decided On : 03-02-2026
(A) Arbitration and Conciliation Act, 1996 – Section 29A(5) – Extension of mandate of Arbitrator(s) – Application under Section 29A(5) for extension of mandate of Arbitrator is maintainable even after expiry of time under Sections 29A(1) and (3) and even after rendering of award during that time – Such award is ineffective and unenforceable – But power of court to consider extension is not impaired by such an indiscretion of Arbitrator – While considering application, Court will examine if there is sufficient cause for extending mandate, and in process, it may impose such terms and conditions as situation demands – Court will also take into account other factors such as reduction of fee of Arbitrator under proviso to Section 29A(4) and also impose costs on parties if fact situation so demands – If mandate is extended, Arbitral Tribunal will pick up thread from where it was left, and seamlessly continue proceeding from the stage at which mandate had expired, and conclude within time granted – Party autonomy, coupled with minimal intervention of judicial authorities, has been guiding principle for 1996 Act. (Paras 9, 12 and 23)
(B) Arbitration and Conciliation Act, 1996 – Section 8 – Contract Act, 1872 – Section 28 – Arbitration – Access to justice constitutes very foundation of democratic governance, serving as linchpin of a fair and equitable society – Beyond realm of public law and ordinary civil/criminal remedies, parties to dispute may elect to resolve their differences through mutually agreed procedures, crystallised in the form of contractual agreements – It is permissible in law to have such alternative dispute resolution mechanisms through contract – Arbitration and Conciliation Act, 1996 provides a simple, efficient, cost-effective, confidential, and fair dispute resolution remedy by empowering parties to choose their Arbitrators and also the procedure for the conduct of the arbitral proceedings – Efficiency in conduct of arbitral proceedings is integral to effectiveness of dispute resolution remedy through arbitration. (Paras 7, 7.1 and 7.2)
Facts of the case:
The following question of law has arisen for consideration: –
Whether Court can entertain application under Section 29A(5) of Arbitration and Conciliation Act, 1996 to extend mandate of Arbitrator(s) for making the award even after an ‘award’ is rendered, though after expiry of statutory limit of eighteen-month period?
Findings of Court:
Appeal against judgment and order dated 24.01.2025 in Application No. 5993 of 2024 passed by High Court of Judicature at Madras is allowed. Application No. 5993 of 2024 is restored to its original number and High Court will proceed with said application and dispose it of as per principles laid down in this Judgment.
Result : Appeal allowed.
The grounds of this judgment are based on the following key legal principles and interpretations:
The maintainability of applications under Section 29A(5) for extending the mandate of an arbitrator even after the expiry of the statutory time limits specified in Sections 29A(1) and (3), and even after the rendering of an award during that period. The court clarified that such awards are considered ineffective and unenforceable, but the court's power to consider extension remains intact, and the arbitrator's act of passing an award post-mandate does not impair the court's jurisdiction (!) .
The court emphasized that the power of the court to extend the mandate of arbitrators is not limited by the fact that an award has already been passed after the expiry of the arbitrator's mandate. The court can, on sufficient cause, extend the mandate and facilitate the continuation and conclusion of arbitral proceedings from the point where the mandate expired (!) .
The judgment underscores that the arbitral process must be conducted efficiently and that the legislative intent behind the provisions is to prevent delays and ensure that arbitration proceedings are completed within a reasonable timeframe, with judicial oversight available to prevent indiscipline or undue delay (!) .
The court clarified that the extension of time and substitution of arbitrators are discretionary powers vested in the court, which must be exercised with caution and circumspection, and that the proceedings can be continued seamlessly upon such extension or substitution (!) (!) .
The interpretation of the statutory provisions indicates that the absence of a strict bar on applications for extension after an award is passed supports the view that the arbitration process should be preserved and advanced, even in cases of delay or delay-related issues, to uphold the integrity and purpose of arbitration as a dispute resolution mechanism (!) .
The court also highlighted that the expression "terminate" in the relevant provisions is transitory and conditional, and does not imply a final or absolute end to proceedings if an application for extension is pending or filed, reinforcing the principle that arbitration should be continued to its logical conclusion (!) .
In essence, the grounds of the judgment rest on the interpretation that the court has the inherent authority and discretion to extend the mandate of arbitrators after the expiry of the statutory period, even if an award has been rendered, provided there is sufficient cause, to uphold the efficacy and purpose of arbitration proceedings.
JUDGMENT :
| Contents I. Question of Law II. Facts III. Judgment of High Court IV. Submission V. Timelines for commencement, conduct, conclusion and termination of arbitral proceedings VI. Timelines under the 1940 Act VII. Timelines under the 1996 Act VIII. The felt need for the prescription of timelines for making the award and the recommendation of the law commission IX. Introduction of Section 29A & its interpretation X. International perspective on the validity of the arbitral award rendered after the stipulated statutory time limit XI. Conclusions |
1. Leave granted.
I. Question of Law
The following question of law has arisen for our consideration.
Whether a Court can entertain an application under Section 29A(5) of the Arbitration and Conciliation Act, 1996 to extend the mandate of the arbitrator(s) for making the award even after an ‘award’ is rendered, though after the expiry of the statutory limit of eighteen-month period?
2. 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. We have also explained the important role that the Court plays while balancing the twin interests - of securing the remedy of resolution of disputes through arbitration and ensuring integrity in its conduct. Though, the questions that we are required to consider had not arisen for consideration in Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd., 2024 SCC Online SC 2494, we approve the observations made therein that the Court can entertain an application under Section 29A(5) and pass appropriate orders under Section 29A(4) for extension of the mandate of the arbitrator even after the award is rendered in the meanwhile.
II. Facts
3. The contractual relationship between the appellant and the respondent is governed by three agreements to sell2[Agreements to sell dated 19.12.2015, 31.07.2018 and 24.03.2021.]. As disputes arose, the appellant filed an application under Section 11 of the Act and the High Court, by its order dated 19.04.2022, 3[Order dated 19.04.2022 in Arb.O.P.(Com.Div) No.2 of 2022.] appointed a sole arbitrator. The arbitrator issued notice on 04.05.2022 and convened the first meeting on 28.05.2022, and the pleadings were completed on 20.08.2022, which date marked the commencement of the period of twelve months provided under Section 29A(1) of the 1996 Act for the making the Award. Before the conclusion of twelve months, parties filed a joint memo under Section 29A(3) and extended the mandate of the arbitrator by a further period of six months, ending on 20.02.2024. Arguments concluded, and the matter was reserved for final award on 09.09.2023.
3.1 Events that unfolded thereafter are indicative of myriad instances when real life fails to keep pace with human discipline for timelines. Despite the award being indicated to be almost ready, the proceedings were reopened on the representation of the parties. On the basis of emails from the respondent that settlement discussions are ongoing and are expected to be finalised by 15.11.2023, the matter was adjourned to 07.01.2024 and thereafter to 27.01.2024. However, when it was reported that the discussions did not fructify into a settlement, the arbitrator reserved the matter for award on 30.01.2024. Notwithstanding the reservation, discussions continued until March 2024, when a tripartite agreement was entered into between the appellant, the respondent, and a third party, M/s G Square Realtors Private Limited, which agreement was, however, not placed before the arbitrator. We are informed that the matter was adjourned to 27.04.2024 and thereafter to 04.05.
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