Arbitration awards must comply with current procedural amendments; pandemic delays affecting timeliness must be considered.

JUDGMENT :

Bhaskar Raj Pradhan, J.

The learned Commercial Court at Gangtok, has set aside the arbitral award dated 23.02.2023 on the ground that the sole Arbitrator had become functus officio after the period provided under section 29(A)(4) of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act) [as amended by the Arbitration and Conciliation (Amendment) Act, 2015 (for short, the 2015 Amendment)] was over and the arbitral award passed on 23.2.2023 was consequently non- est in law and unenforceable. The learned Commercial Court relied upon the judgment of the High Court of Telangana at Hyderabad in the matter of Roop Singh Bhatty vs. Shriram City Union Finance Limited, [2022 SCC OnLine TS 1049], in support of its opinion.

2. The Union of India is aggrieved by the impugned judgment and order dated 09.02.2024 passed by the learned Commercial Court at Gangtok. It is submitted that since the arbitration proceeding was pending as on 30.8.2019 when the Arbitration and Conciliation (Amendment) Act, 2019 (for short, the 2019 Amendment) came into force, section 29-A as amended by the 2019 Amendment, would be applicable.

3. As per the petition, on 15.12.2009, the appellant and the respondent entered into an agreement for formation and surfacing work on Gangtok - Nathula road, Sikkim. On 12.12.2013, the agreement was terminated by the appellant as the work could not be completed within the period of extension. The respondent invoked the arbitration clause and approached the appellant for appointment of an arbitrator. On 21.03.2019, the sole Arbitrator was appointed. On 18.04.2019, communication with regard to the appointment of the arbitrator was made to the parties. On 27.01.2022, pleadings in the arbitration proceeding was completed.

4. On 07.02.2023, according to the appellant, the respondent gave consent for extension of time to complete the arbitration proceedings till 30.03.2023. The respondent contests this and submits that the consent was conditional with a caveat.

5. On 23.02.2023, the arbitral award was passed in favour of the appellant and against the respondent. On 14.07.2023, the respondent filed a petition under section 34 of the Arbitration Act before the learned Commercial Court at Gangtok, challenging the arbitral award. On 09.02.2024, the impugned judgment and order was passed by which the arbitral award was set aside.

6. Elaborate and extensive arguments were made by the learned Deputy Solicitor General of India and the learned Counsel for the respondent. Essentially, these arguments are all on whether section 29-A(1) as amended by the 2015 Amendment or the 2019 Amendment would be applicable to the facts of the case. While the Deputy Solicitor General of India relied upon the judgment of the Hon’ble Supreme Court in Tata Sons Pvt. Ltd. vs. Siva Industries and Holdings Ltd., [2023 INSC 13], the learned Counsel for the respondent distinguished the judgment as it related to international commercial arbitration and relied upon judgments passed by the Delhi High Court in National Skill Development Corporation vs. Best First Step Education Private Limited & Others, [2024:DHC:1676]; Bombay High Court in Mahaveer Realities & Ors. vs. Shirish J. Shah, [2023:BHC-AS:21586]; and High Court of State of Telangana in Roop Singh Bhatty (supra). The judgment of the High Court of Telangana was also the judgment referred to by the learned Commercial Court in the impugned judgment.

7. We will first examine whether the respondent had given consent for extension of time to complete the arbitration proceeding till 30.03.2023 as pleaded by the appellant