The court affirmed that an application for extension of the arbitral mandate under Section 29-A(5) can be granted for sufficient cause, even after the expiration of the initial period, emphasizing the importance of timely objections.

ORAL ORDER

The petitioners are before this Court challenging the order passed by the LXXXVI Addl. City Civil Judge (Commercial Court - CCH No. 87), Bengaluru wherein the application filed under Section 29 A (5) of the Arbitration and Conciliation Act, 1996 came to be allowed vide order dated 10.09.2024 in Comm. A.A. 184/2023.

2. In short, the petitioners herein who had not tendered their consent for extension of the mandate of the arbitral tribunal, under Section 29-A(3) of the Act, had unsuccessfully resisted the respondent No.1’s application made under Section 29-A(5) of the Act, wherein the Trial Court has granted an extension of the arbitral mandate on grounds of sufficient cause of the demise of the then presiding arbitrator, and on account of the insolvency proceedings initiated against respondent No. 2 herein (who was the respondent No.1 in the Comm. A.A. 184/2023 and the borrower). Furthermore, the Ld. Commercial Judge has noted in the above that in view of the first proviso appended to Section 29-A(4) of the said Act, the arbitral tribunal was deemed to be continued till the passing of the impugned order.

3. However, the petitioners contend that the same is untenable in light of the fact that an application under Section 29- A(5) came to be filed only as of 19.04.2023, i.e., almost five months subsequent to the termination of the mandate, unaccompanied with any reasons in support of condonation of the purported delay. The mandate of the Arbitral Tribunal, comprising three retired judges of the Hon’ble Supreme Court of India, stood terminated on expiry of twelve (12) months from the date of completion of pleadings on 22.11.2021.

4. It would suffice to observe here that the respondent No. 1 had invoked the arbitration against the petitioners under a composite transaction of a Brewing Agreement executed between the respondents herein on 06.02.2015, and several alleged guarantees executed by the petitioners herein in favour of the respondent No. 1 to ensure due performance of the obligation incumbent upon the respondent No. 2 under the said Brewing Agreement.

4.1. The said Brewing Agreement had come to be terminated, and the advance of INR 17.50 crores earlier lent by respondent No. 1 to respondent No. 2 under the Agreement dated 06.02.2015 having become due, the respondent No.1 invoked arbitration to recover the same. The same was, however, challenged before this Court in CMP No. 304/2018 on grounds that the petitioners herein were non-signatories to the Agreement dated 06.02.2015. Dismissing the same, this Court vide order dated 31.03.2021 had referred all parties herein to arbitration.

5. The time period for making of an award under Section 29-A the said Act had lapsed on 21.11.2022 and the Arbitral Tribunal had called upon the parties to communicate the consent for extension of time on 18.03.2023, as required under Section 29- A(3) of the Act. The petitioners refused to provide consent as regards the continuation of the same on 26.03.2023. Subsequently, the respondent No. 1 had made an application under Section 29- A(5) of said Act, which came to be allowed vide order dated 22.09.2023 in Comm. A.A. No. 184/2023. This Court however, in an appeal preferred by the petitioners, remanded the same to the Ld. Commercial Court, vide order dated 13.08.2024 in COMAP No. 383/2023.

6. Subsequently, the Ld. Commercial Court has passed the order impugned herein, extending the mandate of the Ld. Arbitrators. The same, however, was challenged and this Court vide order dated 30.09.2024 in COMAP No. 380/2024 dismissed the same on grounds of maintainability. Thereafter, the Ld. Tribunal had passed an order scheduling cross-examination of witnesses in December, 2024. Aggrieved, the petitioners have filed the instant petition on 15.10.2024, impugning the order of the Ld. Commercial Court extending the mandate of the Arbitral Tribunal.

7. Sri K N Phanindra, learned Senior Counsel representing the petitioner's counsel primarily contended that whe