The Supreme Court of India has affirmed that while the power to extend the mandate of an arbitral tribunal rests with the principal civil court of original jurisdiction, the appointment or previous judicial interference by a High Court does not invalidate proceedings that have already progressed through active party participation. In a significant ruling regarding the South Bihar Power Distribution Company Ltd., the bench led by Justice Ujjal Bhuyan and Justice Atul S. Chandurkar held that an appellant who participates in arbitration without raising timely objections is deemed to have waived their right to challenge the composition of the tribunal.

The legal dispute originated from a 2013 distribution franchisee agreement between the South Bihar Power Distribution Company and India Power Corporation Ltd., alongside its subsidiary, Vikriti Power Limited, formerly known as India Power Corporation (Bodhgaya) Ltd. When arbitration stalled, the Patna High Court had appointed a sole arbitrator, a decision that the power company eventually contested on the grounds that the contract mandated a three-member panel. The company further challenged the High Court’s subsequent decision to grant an extension of the arbitrator’s mandate under Section 29A of the Arbitration and Conciliation Act, 1996, arguing that the High Court lacked the requisite jurisdiction to act as the "court" defined in the statute for such purposes.

Addressing the jurisdictional question, the Supreme Court clarified that the power to extend the time limit under Section 29A lies exclusively with the principal civil court of original jurisdiction or a High Court exercising original civil jurisdiction, rather than a High Court exercising powers under Section 11. However, because the court had already directed the relevant District Court to consider the extension request on its merits, the apex court observed that the High Court’s procedural error did not warrant setting aside the entire arbitration, which had reached an advanced stage.

"The power under sub-section (4) of Section 29A vests in the ‘court’ as defined in Section 2(1)(e) of the 1996 Act ," the bench observed. "There is no residual supervisory or controlling power left with the High Court or the Supreme Court over the arbitral proceedings after the appointment is made." Despite this finding, the court determined that nullifying the proceedings would be counter-productive, especially given the clear evidence of consent and long-standing acquiescence by the parties.

The court emphasized the principle of party autonomy and the importance of preventing procedural delays in arbitration. By participating in hearings before the sole arbitrator, filing counterclaims, and twice consenting to the appointment of the tribunal, the appellant effectively waived its right to insist on a three-member panel . As the judgment noted: "A party who knows that any requirement under the arbitration agreement has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay shall be deemed to have waived his right to so object."

Further, the court addressed the appellant’s argument regarding the second respondent’s insolvency status under the Insolvency and Bankruptcy Code (IBC). The company had contended that the ongoing corporate insolvency resolution process against the subsidiary, Vikriti Power Limited, barred it from initiating or continuing the arbitration claim. The Supreme Court rejected this, ruling that the moratorium under Section 14 of the IBC does not prohibit a corporate debtor from pursuing recovery actions that could potentially increase the company's asset value for the benefit of creditors.

The judgment also reinforced the current interpretation of Section 29A, confirming that applications for extending an arbitrator's mandate remain maintainable even after the expiry of statutory time limits or the rendering of an award. The court highlighted that this flexibility is essential to ensure that arbitration remains a "litigant centric process" aimed at expediting disposal rather than inviting fresh, redundant litigation.

The bench concluded that the legal constraints imposed by the court on February 12, 2024—which had prevented the arbitrator from issuing a final award pending the Supreme Court's decision—should now be lifted. Consequently, the sole arbitrator has been directed to conclude the proceedings and pass the final award within six weeks from the date of the order. By dismissing the appeals, the Supreme Court has prioritized the continuity and finality of the existing arbitral process over technical jurisdictional challenges raised at a late stage of the proceedings. The decision serves as a firm reminder that conduct during arbitration, such as active participation and repeated consent, creates a binding waiver that prevents parties from later attacking the tribunal’s constitution or procedural history to delay the final adjudication of disputes.