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IN THE HIGH COURT OF DELHI AT NEW DELHI
Sanjeev Narula, J.
M/s Bkfc And Co. - Appellant
Versus
M/s. Transparent Energy System Private Limited - Respondent
O.M.P.(Misc.)(Comm.) 104 of 2021
Decided On : 27-09-2021
Arbitration - Extension of Arbitral Tribunal's Mandate - Arbitration and Conciliation Act, 1996 - Section 29A(4) and (5) - Section 26 of the Amendment Act, 2015 - S. P. Singla Constructions Private Limited v. State o/H.P, 2019 2 SCC 488 - ABB India Limited v. BHEL - The judgment discusses the applicability of Section 29A of the Arbitration and Conciliation Act, 1996, and the interpretation of the arbitration clause in relation to the amended provisions. The court refers to the judgments in S. P. Singla Constructions Private Limited v. State o/H.P and ABB India Limited v. BHEL to analyze the legal question and concludes that the arbitration agreement does not satisfy the requirement of the applicability of the 2015 Amendment to the Act.
Fact of the Case:
The petition seeks an order of extension of the mandate of the Arbitral Tribunal by a period of six months for passing the arbitral award. The Respondent objects to the maintainability of the petition, contending that the amended Section 29A is not applicable to the arbitration proceedings which commenced before 23rd October 2015.
Finding of the Court:
The court finds that the arbitration agreement does not constitute an agreement under Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015. It dismisses the petition with costs for making frivolous submissions contrary to the existing position taken by the Courts.
Issues: The main issue is the applicability of Section 29A of the Arbitration and Conciliation Act, 1996, to the arbitration proceedings commenced before 23rd October 2015.
Ratio Decidendi: The court's decision is based on the interpretation of the arbitration clause and the applicability of the 2015 Amendment to the Act, as discussed in the judgments of S. P. Singla Constructions Private Limited v. State o/H.P and ABB India Limited v. BHEL.
Final Decision: The petition is dismissed with costs to be paid to the High Court of Delhi (Middle Income Group) Legal Aid Society.
JUDGMENT
Sanjeev Narula, J. (Oral). - The present petition under Section 29A(4) and (5) of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as 'the Act] seeks an order of extension of the mandate of the Arbitral Tribunal by a period of six months, for passing the arbitral award.
2. The Respondent, in its reply raises several objections, and particularly objects to the maintainability of the petition. It is contended that the petition is wholly unnecessary and misconceived; Section 29A is only applicable prospectively to the arbitration proceedings which commenced on or after 23rd October 2015. The constitution of the present arbitral tribunal as well as the commencement of the arbitration proceedings happened well before the aforementioned date. The parties have not expressly agreed to the amended provisions.
3. The Petitioner, on the other hand, insists that the present petition is maintainable and the amended Section 29A is applicable. On the strength of the expression - "This submission shall be deemed to be submissions to Arbitration within the meaning of the Indian Arbitration Act 1940 or any statutory modification thereof" - contained in the arbitration clause, it is argued that the parties have agreed to apply the statutory amendments to the Arbitration and Conciliation Act, 1996, and no fresh express agreement is necessary. Reliance is placed upon the judgment of this Court in Ratna Infrastructure Projects Private Limited v. Meja Urja Nigam Private Limited., 2017 SCC OnLine Del 7808.
4. The Court has heard the counsel for the parties. Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015, provides as follows:
"26. Nothing contained in this Act shall apply to the arbitral proceedings commenced, in accordance with the provisions of section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act. "
5. Subsequent to judgment relied upon by the Petitioner, there is an authoritative decision of the Supreme Court, in S. P. Singla Constructions Private Limited v. State o/H.P, 2019 2 SCC 488. which deals with the proposition in law advanced by the Petitioner. In the said judgment, the Supreme Court also had the occasion to consider the decision in Ratna Infrastructure (supra). The Court, however did not comment on the correctness of the judgment in Ratna Infrastructure (supra), yet decided the legal question by holding that the expression - "Subject as aforesaid the provision of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being shall apply to the arbitration proceeding under this clause'" - contained in an arbitration clause, is not indicative of an agreement between the parties to apply the provisions of the Amended Act.
6. The factual situation in the present case is somewhat similar to one that arose in the case of S. P. Singla (supra). The relevant portion of the arbitration agreement contained in clause 7.23 of the Tender document relied upon by the Petitioner to contend that there is an agreement, as contemplated under Section 26 of the Amendment Act of 2015, reads as under:
"Upon every or any such reference in the cost of and incidental to the reference in the award respectively shall be in the direction of the Arbitration, or Arbitrators or the Umpire who may determine the amount thereof or direct the same to be texted as between attorneys and client or between attorney and client or such between party and party, and shall direct by whom and to whom and in what manner the same shall be borne and paid. This submission shall be deemed to be submissions to Arbitration within the meaning of the Indian Arbitration Act 1940 or any statutory modification thereof. The award of the Arbitrator, Arbitration Act 1940 or any statutory modification thereof. "
In S. P. Si
The judgment establishes the principle that the applicability of amended provisions to arbitration proceedings depends on the interpretation of the arbitration agreement and the specific language use....
The Court may extend the mandate of an arbitral tribunal even without consent from all parties if justified by sufficient cause, emphasizing the importance of continuity in arbitration proceedings.
(1) 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 af....
The Amendment Act, 2015 is prospective in nature and will apply to arbitral proceedings commenced after its commencement. The notice invoking arbitration issued prior to the Amendment Act, 2015 and t....
The Court established the applicability of section 14 of the Limitation Act, 1963 to The Arbitration and Conciliation Act, 1996, and affirmed its jurisdiction to extend the arbitral tribunal's mandat....
The court's power to extend an arbitrator's mandate under Section 29-A is not limited by the timing of the application, allowing for extensions even after termination.
Extension of Sole Arbitrator's mandate under the Arbitration Act requires sufficient cause, unaffected by procedural misconduct by arbitrator, especially when delays arise from the respondent's actio....
Arbitration awards must comply with current procedural amendments; pandemic delays affecting timeliness must be considered.
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