The court maintains supervisory discretion under Section 29-A of the Arbitration and Conciliation Act, 1996, to determine the extension of an arbitrator's mandate based on the progress of proceedings and necessity, rather than granting extensions as a routine matter based solely on mutual party consent.

1. The present petition, under Section 29(A) of the Arbitration and Conciliation Act, 1996 [“the Act”] read with Section 151 of the Civil Procedure Code, 1908, has been filed seeking extension of the time of mandate of the learned Arbitral Tribunal.

2. The material on record indicates that the parties entered into an Accounting Service Agreement [“Agreement”] on 16.01.2018.

3. Thereafter, disputes arose between the parties and the Petitioner herein preferred CS (Comm) No.355/2021 before the learned Commercial Court-01 Saket Court, New Delhi [“Commercial Court”]. Consequently, the Petitioner preferred an application under Section 8 of the Act, which was allowed by the learned Commercial Court and the parties were referred to arbitration vide Order dated 14.11.2022.

4. Sh. V.K. Malhotra, learned ADJ (Retd.) was appointed as learned Sole Arbitrator on 26.12.2022.

5. It is stated that the pleadings in the arbitration proceedings were completed on 16.05.2024 and thus mandate for twelve months continued till 16.05.2025. In this case, thereafter, the mandate of the learned Sole Arbitrator was extended for a period of six months by mutual consent of the parties from 17.05.2025 to 16.11.2025.

6. It is stated that since the mandate of the learned Sole Arbitrator has come to an end, the Petitioner has approached this Court seeking an extension of the mandate for a period of twelve months for completion of proceedings and the rendering of the award.

7. Learned counsel appearing for the Respondent, who appears on advance notice, states that he does not have any objection to the extension of the mandate.

8. This Court has heard learned counsel for both parties and perused the record of the present petition.

9. Before proceeding further, it is necessary to note the relevant statutory provision. Section 29-A of the Act prescribes the timeline for making an arbitral award and stipulates the consequences of non-compliance. For clarity, Section 29-A of the Act is reproduced below:

“29-A. Time limit for arbitral award.— [(1) The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of Section 23:

(2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.

(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months.

(4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator(s) shall terminate unless the court has, either prior to or after the expiry of the period so specified, extended the period:

Provided that while extending the period under this sub-section, if the court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent for each month of such delay:

[Provided further that where an application under sub-section (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application:

Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced.]

(5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and condition