No Section 29A Extension For Terminated Arbitration: Madras High Court

The Madras High Court has clarified the limits of judicial intervention in arbitral proceedings, ruling that an application for the extension of time under Section 29A of the Arbitration and Conciliation Act, 1996 , cannot be entertained if the arbitral proceedings have already faced formal termination.

Case Background

The dispute between Sally Thermoplastic India Limited (Applicant) and the Learning Leadership Foundation (Respondent) had been referred to a sole arbitrator. Following the completion of pleadings in April 2021, the mandate period under the Act eventually expired. In December 2022, the sole arbitrator communicated via email that, due to personal health conditions, they were unable to continue the proceedings and requested that the parties approach the High Court for the appointment of a substitute arbitrator.

For reasons including the Managing Director’s accident and the previous counsel’s health issues, the applicants failed to move the Court for a substitution. It was not until 2025, after engaging new counsel, that the applicant attempted to treat the tribunal as merely time-barred rather than terminated, filing an application under Section 29A for an extension of time.

The Legal Conflict

The Applicant argued that arbitration is a vital tool for resolving high-value disputes—citing a claim of approximately Rs. 6.5 crores against a counter-claim of Rs. 3.25 crores. They relied on Supreme Court precedents, such as Rohan Builders (India) Private Limited v. Berger Paints India Limited , to assert that Section 29A extensions remain maintainable even after the prescribed duration has passed.

Conversely, the Respondent contended that the proceedings were not merely delayed but had effectively terminated in 2022. They argued that the tribunal had become functus officio (having fulfilled its office/authority), and therefore, there was no active tribunal to which an extension could be granted.

Court’s Reasoning and Analysis

Justice N. Anand Venkatesh observed that the email sent by the arbitrator on December 1, 2022, clearly indicated an unequivocal withdrawal from the office. Under Section 32 (2)(c) of the Act, if a tribunal finds that the continuation of proceedings has become "impossible," the mandate terminates.

The Court distinguished the present matter from Rohan Builders . It clarified that while the law allows for time extensions when proceedings are "in seisin" (currently ongoing), it cannot revive a proceeding that has already been abandoned by the tribunal.

Key Observations

> "The e-mail dated 01.12.2022 issued by the sole Arbitrator, in no uncertain terms, makes it clear that his health condition is preventing him from continuing as an Arbitrator and therefore, he has requested the parties to take steps to get a new Arbitrator appointed."

> "There is no question of filing an application seeking for extension of time for a non-existent Arbitral Tribunal."

> "This Court would have accepted the said submission if the respondent had consented for the order. Learned counsel for the respondent, on instructions, submitted that the respondent is not consenting for any order."

Decision and Implications

The Madras High Court dismissed the application, noting that the applicant’s failure to seek a substitution at the appropriate time had rendered the current attempt to secure an extension legally untenable. This judgment serves as a stern reminder to legal practitioners: when an arbitrator withdraws due to incapacity, the correct remedy is to apply for the appointment of a substitute arbitrator, not to ignore the termination and attempt a retroactive extension of time under Section 29A . The ruling reinforces the principle that judicial intervention is limited to managing active arbitrations, not resurrecting those that have legally lapsed.