Arbitration Issue- Wise Material

NOTE: This is in addition to the prescribed reading and books. Please refer to this with reference to
specific topics.

Arbitrability –
A fundamental concept in arbitration law jurisprudence Arbitration is a private
dispute resolution mechanism where two or more parties agree to resolve
their current or future disputes before an Arbitral Tribunal in an alternative to
adjudication by courts and other public fora established by law. The mutual
consensus of parties to resort to arbitration for resolving disputes is captured
in an arbitration agreement, where parties forego their legal right to have
their disputes adjudicated in other courts/public fora. Under international
arbitration law jurisprudence, it is widely recognised that the term “disputes”
only refers to matters that can be settled through arbitration. In other words,
arbitration has its own limitations and not all kinds of disputes are amenable
to arbitration are “arbitrable”. Arbitrability is a fundamental concept in
arbitration law as it relates to the very jurisdiction of an Arbitral Tribunal to
act upon a matter.

While non-arbitrability has several meanings, the Supreme Court in Booz

Allen & Hamilton Inc. v. SBI Home Finance Ltd. has referred to the
following three facets of non-arbitrability: (i) Whether the disputes are
capable of adjudication and settlement by arbitration? (ii) Whether the
disputes are covered by the arbitration agreement? That is, whether the
disputes are enumerated or described in the arbitration agreement as
matters to be decided by arbitration or whether the disputes fall under the
category of “excepted matters”, which are excluded from the purview of the
arbitration agreement. (iii) Whether the parties have referred the disputes to
arbitration? That is, whether the disputes fall under the scope of the
submission to the Arbitral Tribunal or whether such disputes do not arise from
the statement of claim and the counterclaim filed by the parties before the
Arbitral Tribunal. From a transnational perspective, non-arbitrability may
arise from seven distinct situations2, these include: (i) The underlying
contract itself being invalid for a reason which may not directly strike upon
the validity of the arbitration agreement. (ii) The non-existence of an
arbitration agreement between the parties. (iii) The arbitration agreement
being invalid under the applicable law. (iv) A disputed issue falling outside
the scope of the arbitration agreement. (v) The applicable law prohibits
arbitration of a disputed issue/subject-matter. In other words, concerns
pertaining to public policy under the mandatory law bars the arbitration of
disputes otherwise chosen by parties to be referred to arbitration. (vi) An
essential precondition or prerequisite for referring the matter to arbitration is
not met by either or both of the parties. (vii) The party seeking arbitration
has waived its right to arbitrate or is estopped from claiming that right.
Arbitration agreement and its link with arbitrability
For the purposes of arbitrability, it is essential to understand what constitutes
a valid arbitration agreement. Section 7 of the Arbitration and Conciliation
Act, 1996 (Arbitration Act) provides that an “arbitration agreement” means
an agreement by parties to submit to arbitration all or certain disputes which
have arisen, or which may arise between them in respect of a defined legal
relationship, whether contractual or not. As per the Arbitration Act, an
arbitration agreement has to be in writing, in the form of an arbitration clause
in a contract or a separate agreement. An arbitration agreement can also be
contained in exchange of letters, telex, telegrams, or other means of
telecommunication which sufficiently establish the record of the agreement.
Lastly, an arbitration agreement will be deemed to be in existence if two
parties exchange statements of claim and defence in which the existence of
the arbitration agreement is alleged by one party and not denied by the
other.
While the term “agreement” is not defined under the Arbitration Act, Section
10 of the Contract Act, 1872 (Contract Act) provides that all agreements are
contracts, if they are made by free consent of parties competent to contract,
for a lawful consideration and with a lawful object, and are not thereby
expressly declared to be void.7 The Supreme Court in Vidya Drolia v.
Durga Trading Corpn has held that an arbitration agreement, in addition to
the mandate under Section 7 of the Arbitration Act, must also satisfy the
statutory mandate under Section 10 of the Contract Act. An arbitration
agreement which is not enforceable in law is void and not legally valid. In
such a case, the disputes that may be sought to be referred to arbitration
would be rendered non-arbitrable on account of the non-existence of a valid
arbitration agreement. Arbitration and the reference of disputes to arbitration
is a matter of contract, where parties are entitled to fix boundaries to confer
and limit the jurisdiction and legal authority of the Arbitral Tribunal. An
arbitration agreement can be extensive and comprehensive, covering all
disputes, or it can be limited to specific disputes.

The question of the Arbitral Tribunal’s jurisdiction emerges when the parties
in their arbitration agreement decide to carve out arbitrable disputes or
exclude matters which are not amenable to arbitration. C. Subject-matter
arbitrability The Supreme Court in Vidya Drolia while referring to the decision
in SBP & Co. v. Patel Engg. Ltd. opined that there is a difference between
a “non-arbitrable claim” and “non-arbitral subject-matter”. The former may
arise on account of scope of the arbitration agreement and also when the
claim is not capable of being resolved through arbitration. However, non-
arbitrable subject-matter would generally refer to the non-arbitrability of
disputes under the applicable provisions of law. The provisions of the
Arbitration Act provide much needed guidance and recognise that certain
kinds of disputes or subjects may not be amenable to arbitration.

The general principle is that where the jurisdiction of an ordinary civil court is
excluded by conferment of exclusive jurisdiction on a specified court or
tribunal as a matter of public policy, then such a dispute would not be
capable of resolution by arbitration. For instance, in Vimal Kishor Shah v.
Jayesh Dinesh Shah, the disputes relating to private trusts, trustees, and
beneficiaries of trust under the Trusts Act were held to be non-arbitrable..
Hence, consumer disputes under the Consumer Protection Act were held not
amenable to arbitration. Inasmuch as why disputes pertaining to rights in rem
are typically non-arbitrable, the Supreme Court in Vidya Drolia21 explained
that the distinction between judgments in rem and judgments in personam
turns on their power as res judicata. A judgment in rem would operate as res
judicata against the world, and judgment in personam would operate as res
judicata only against the parties in dispute. The Supreme Court in Vidya
Drolia also provided a cautionary note stating that the use of expressions
rights in rem and rights in personam may not be the precise threshold for
determining non-arbitrability. This was because many a times, a right in rem
results in a subordinate enforceable right in personam. From the above, it is
clear that arbitration is unsuitable when rendering a decision has an erga
omnes effect, that is, it affects the rights and liabilities of persons who are
not bound by the arbitration agreement.

Interplay of arbitrability and public policy concerns A controversy erupted as

the Supreme Court rendered its decision in N. Radhakrishnan v. Maestro
Engineers holding that matters relating to serious allegations of fraud were
non-arbitrable. The Supreme Court in N. Radhakrishnan v. Maestro
Engineers further opined that if justice demands, then notwithstanding the
arbitration clause, the dispute would be tried in an open court. In the
subsequent decision in Vidya Drolia, it was held that to accept the reasoning
in N. Radhakrishnan, one would have to agree that arbitration is a flawed and
compromised dispute resolution mechanism that could be forgone when
public interest or public policy demands that the matter must be tried in a
court of law. The Supreme Court in Vidya Drolia continuing with its analysis of
N. Radhakrishnan held that the public policy argument proceeded on the
principle that arbitration is inferior to court adjudication as: (i) fact-finding
process in arbitration is not equivalent to judicial fact-finding, which is far
more comprehensive and in-depth; (ii) there is limited or lack of reasoning in
arbitral awards; (iii) arbitrators enjoy and exercise extensive and unhindered
powers and therefore are prone in making arbitrary and despotic decisions;
(iv) there is no appeal process in arbitration which combined with point (iii)
above and the limited review of arbitral award in post-award court
proceedings, may have devastating consequences for the losing party and
undermine justice; (v) arbitration proceedings are usually private and
confidential; (vi) arbitrators are unfit to address issues arising out of the
economic power disparity and social concerns; (vii) business and industry, by
adopting and compulsorily applying arbitration process, leave the vulnerable
 and weaker sections with little or no meaning choice but to accept
arbitration; and (viii) arbitration is expensive and costly in comparison to
court adjudication.

Appointment of Arbitrator-
Introduction
Section 11 of the Arbitration and Conciliation Act 1996 (the Arbitration Act)
has been subject to various interpretations and a couple of amendments in
recent years. The Indian courts had maintained that the scope of inquiry,
under section 11 of the Arbitration Act, is limited to the examination of the
existence of an arbitration agreement. The scope of the judiciary to ascertain
the details of the dispute, when approached under section 11 of the
Arbitration Act, was well established as being limited to the prima facie
identification of the arbitration agreement and the dispute. An application
under section 11 restricts the courts intervention to examine whether:
 there is a valid arbitration agreement between the parties; and
 any dispute has arisen between them out of such agreement which may call
for the appointment of an arbitrator to decide such disputes.
However, lately the courts have been reviewing the established principle.
They have not only been identifying the arbitration agreement, but also
examining it and determining related prima facie questions.
Legislative intent and scrutiny
The 176th Law Commission Report (the 176th LC Report) pointed out that
divergent views have been expressed as to the stage at which jurisdictional
issues could be decided. Divergent views have also been expressed as to
whether orders of the Chief Justice of India or his nominee, or that of the
Chief Justice of the High Court or his nominee, regarding appointing an
arbitrator should be treated as administrative orders or judicial orders.
Treating the orders under section 11 of the Arbitration Act as administrative
has led to several writ petitions being filed before various high courts raising
jurisdictional objections and, consequently, stay of arbitration proceedings
being obtained. While discussing the above, the Law Commission also
discussed whether the Chief Justice of India or the Chief Justice of the High
Court are persona designata and whether the exclusion of remedy is
available under article 226 of the Constitution of India 1950.
It was further pointed out that there are diverging views as to the mandatory
nature of the timelines prescribed by sections 11(4) and (5) of the Arbitration
Act. It was also stated that section 11(6) of the Arbitration Act does not
stipulate any time limit. Besides discussing the advantages and
disadvantages of an order under section 11 of the Arbitration Act to be an
administrative or judicial order, the 176th LC Report also discussed the
difficulties which arise if the preliminary issues are not decided under section
11 of the Arbitration Act. The 176th LC Report also held that preliminary
issues are to be decided only if some conditions are satisfied.
Thereafter, the 246th Law Commission Report suggested that section 11 of
the Arbitration Act be amended such that reference by the high court to any
person or institution designated by it shall not be regarded as a delegation of
judicial power. An affirmative judicial finding regarding the existence of
arbitration agreement and the administrative act of appointing arbitrator are
final and non-appealable.
It was also proposed that the high courts should be given liberty to frame
their own rule in relation to the fees of the arbitration in accordance with the
Sixth Schedule of the Arbitration Act.
In order to tackle the delay before the courts, the Arbitration and Conciliation
(Amendment) Act, 2015 (the 2015 Amendment) amended section 11 so that
the delegation of power of appointment would not be regarded as a judicial
act. This was to substantially cut down the time taken at the threshold of the
arbitration, arising from the failure of a party to appoint an arbitrator.
Consequently, section 11(6A) was introduced to the Arbitration Act. However,
owing to judicial precedent, the subsection did not stay for long and was
omitted by the Arbitration and Conciliation (Amendment) Act 2019 (the 2019
Amendment).
Interpretation and application by courts
In Duro Felguera v Gangavaram Port Ltdthe Supreme Court of India (the
Supreme Court) held that as per the section 11 of the Arbitration Act, the
power of court is confined to examining the existence of the arbitration
agreement. It was held that a bare reading of section 11(6) of the Arbitration
Act clearly shows that the courts should only need to investigate one aspect –
that is, the existence of an arbitration agreement. The Supreme Court further
held that in making this determination, it needs to be established whether
the agreement contains a clause which provides for arbitration pertaining to
the disputes which have arisen between the parties to the agreement. It is
relevant to note that despite the omission of section 11(6A) by the 2019
Amendment, the judicial intent behind the provision is still to be the guiding
force for the courts while examining an application under section 11 of the
Arbitration Act. Therefore, under section 11, the court's jurisdiction is
confined to just identifying the existence of the arbitration agreement and an
arbitral dispute.
A revolutionary judgment passed by the Supreme Court declared unilateral
appointments, notwithstanding an arbitration agreement between the
concerned parties, to be bad law. While propounding the decision in the case
of Perkins Eastman Architects DPC v HSCC (India) Ltd, the Court held
that a party to the agreement would not be entitled to make any
appointment of an arbitrator on its own. This is because in a case where only
one party has a right to appoint a sole arbitrator, the party to the
agreement's choice will always have an element of exclusivity in determining
or charting the course for dispute resolution. Such an exclusive and unilateral
power of appointment is in contravention of the provisions of the Arbitration
Act. As a result, an appointment made following such a procedure would be
outside the Arbitration Act.
The existence of an arbitration agreement and the extent of judicial review
necessary and essential therein has always been a conundrum under the
Arbitration Act.

It has also been noted by the courts that the limitation period is normally a
mixed question of fact and law, and hence should be left at the decision of
the arbitral tribunal. In view thereof, it is a well-established proposition that
the question of the limitation period should be left for the arbitral tribunal to
ascertain. Consequently, the Supreme Court in BSNL v Nortel Networks
(India) (P) Ltd discussed the issue of limitation and held that the limitation
is normally a mixed question of fact and law and would lie within the domain
of the arbitral tribunal. The Court further distinguished between the
jurisdictional and admissibility issues, stating that the jurisdictional issues
include objections to the competence of the arbitrator or tribunal to hear a
dispute, such as lack of consent, or a dispute falling outside the scope of the
arbitration agreement. On the other hand, the admissibility issues relate to
procedural requirements, such as a breach of pre-arbitration requirements –
for instance, a mandatory requirement for mediation before the
commencement of arbitration or a challenge to a claim or a part of the claim
being either time-barred or prohibited, until some pre-condition has been
fulfilled. An admissibility issue is not a challenge for the jurisdiction of the
arbitrator to decide the claim.

However, the limitation period in case of issuing the notice invoking

arbitration (NIA) begins when and whether the court can determine it to be
barred by limitation and so forth. The courts, under section 11 of the
Arbitration Act, do not have the power to determine the question of limitation
or the validity of the NIA with respect to limitation period. The Court in Nortel
Networks held that the issue of limitation which concerns the "admissibility"
of the claim must be decided by the arbitral tribunal either as a preliminary
issue, or at the final stage after evidence is led by the parties.
In the recent case of Swadesh Kumar Agarwal v Dinesh Kumar Agarwal
& others, the Supreme Court of India dwelt upon the situation of absence of
written arbitration agreement and the powers of the High Court under section
11(6) of the Arbitration Act. One of the parties filed an application under
section 11(6) with the High Court of Delhi to terminate the mandate of the
sole arbitrator, who had been appointed with the consent of the parties. It
was held that where there is no written agreement between the parties on
the procedure for appointing an arbitrator(s), the parties are free to agree on
a procedure by mutual consent or inclusive agreement and the dispute can
be referred to an arbitrator(s) who can be appointed by mutual consent. In
the event of a failure to arrive at an agreement, the matter can proceed as
per section 11(2) or 11(5) of the Arbitration Act. It was further held and
clarified that, in such a situation, the application for appointment of an
arbitrator(s) shall be maintainable under section 11(5) of the Arbitration Act
and not under section 11(6). The Court held that where there is a dispute on
the mandate of the arbitrator being terminated on the ground(s) mentioned
in section 14(1)(a), the dispute must be raised before the court, as defined
under section 2(e) of the Arbitration Act. Such a dispute cannot be decided on
an application filed under section 11(6) of the Arbitration Act.

Kompetenz-Kompetenze-
A matter of paramount significance within the realm of international
arbitration is the authority vested in an Arbitral Tribunal to deliberate upon
and resolve conflicts pertaining to its jurisdiction encompassing matters like
the presence, validity, legality, and ambit of the parties’ arbitration
agreement. This particular issue forms the core of the competence-
competence doctrine, which is alternatively known as the kompetenz-
kompetenz principle. The competence-competence doctrine profoundly
connects with laws across jurisdictions governing the distribution of
jurisdictional authority between Arbitral Tribunals and domestic courts.
Almost all advanced legal systems, especially those that have adopted the
UNCITRAL Model Law, recognise the power of the Arbitral Tribunal
(competence-competence or kompetenz-kompetenz) to examine and rule on
challenges to its own jurisdiction, with the possibility of subsequent judicial
review during annulment or recognition proceedings.8 In numerous legal
systems, the prevailing consensus is that when parties submit their
disagreements and disputes stemming from the primary contract to
arbitration, they also consent to present the jurisdictional issues to the
Arbitral Tribunal. In essence, the principle of competence‑competence
denounces the notion that an Arbitral Tribunal may not be capable of
rendering a fair and independent decision on its jurisdiction to adjudicate the
disputes referred by the disputants.

However, it is important to recognise that not all jurisdictions support the

competence-competence principle with equal fervour. The issue of how
thoroughly a court should examine the validity of an arbitration agreement
comes into play when one party seeks the court’s intervention to refer the
matter to arbitration. The level of scrutiny applied in such cases largely
depends on the substantive law of the relevant jurisdiction.

The doctrine of competence‑competence plays a pivotal role in guiding the

court’s approach to determine whether it should conduct an exhaustive
review or a preliminary assessment of the arbitration agreement’s validity. In
jurisdictions that have adopted the UNCITRAL Model Law, arbitrators typically
hold the ultimate authority to decide on the validity of the arbitration
agreement in most instances. Competence-competence in Indian law The
Arbitration and Conciliation Act, 1996 (Arbitration Act) in India is based on the
UNCITRAL Model Law. Section 16 of the Arbitration Act bestows statutory
acknowledgement to the principle of competence-competence and confers
the Arbitral Tribunal with the important power to adjudicate on matters
pertaining to the Arbitral Tribunal’s jurisdiction. This includes the authority to
address any objections raised concerning the existence or validity of the
arbitration agreement.

The provision also contains two fundamental principles that guide this
process. Firstly, it recognises that an arbitration clause — a provision
specifying arbitration as the method of resolving disputes within a contract, is
to be treated as an independent agreement distinct from the other terms and
conditions of the contract itself. This means that even if there are disputes or
challenges regarding the overall contract, the arbitration clause remains
enforceable, and the Arbitral Tribunal can proceed to arbitrate the issues
outlined within it. Secondly, Section 16 establishes that if the Arbitral Tribunal
determines that the entire contract is null and void, this decision does not
automatically result in the arbitration clause being considered invalid. In
other words, the invalidity of the contract as a whole does not ipso jure, or
automatically, lead to the invalidation of the arbitration clause. This ensures
that disputes regarding the contract as a whole and the arbitration clause
within it can be addressed separately, and the arbitration process can
continue even if the contract is found to be void.

Court Intervention & Period of Limitation-

In Uttrakahand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field
Ltd. the Supreme Court of India dealt with an important question — whether
a court acting under Section 11 of the Arbitration Act could, at the pre-
reference stage, consider the issue of limitation. While answering the moot
question, the Supreme Court referred to the observations in the 246th Report
of the Law Commission of India (Report). In the Report, the Law Commission
of India (Commission), while explaining the rationale behind the amendments
suggested to Sections 8 and 11 of the Arbitration Act, observed that the
amendments pertain to limiting judicial intervention. This limited judicial
intervention was envisaged only when the court or judicial authority
determined that the arbitration agreement was non-existent or invalid. The
Commission believed that if the court or judicial authority is reasonably
convinced on a prima facie basis against arguments challenging the
arbitration agreement’s validity, it should refer the matter to arbitration. The
proposed amendment required that the court or judicial authority will refrain
from referring the parties to arbitration only when it concludes that there is
no valid arbitration agreement in place. If the court or judicial authority, at
first glance, is of the view that the arbitration agreement is valid, it should
then direct the dispute to arbitration and defer the final determination of the
arbitration agreement’s existence to the Arbitral Tribunal. Based on the
above observations, Section 11 of the Arbitration Act came to be amended
substantially by the Arbitration and Conciliation (Amendment) Act, 2015
(2015 Amendment). In the 2015 Amendment, sub-section (6-A) was added to
Section 11, which prescribed that the Supreme Court or the High Court, as
the case may be while considering an application seeking reference to
arbitration, shall confine its examination to the existence of an arbitration
agreement.

The introduction of sub-section (6-A) had the effect of legislatively overruling

the judgments of the Supreme Court in SBP & Co. v. Patel Engg. Ltd.13
and National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd. and other
similar decisions which prescribed a much wider scope of judicial intervention
at the pre-reference stage. The Supreme Court in Uttrakahand Purv case
observed that the doctrine commonly known as “competence-competence”,
or “competence de la recognised”, confers authority upon the Arbitral
Tribunal to decide matters concerning its own jurisdiction. This includes
adjudicating all questions related to jurisdiction and assessing the existence
and validity of the arbitration agreement.

The purpose of this doctrine is to minimise judicial interference, ensuring that

the arbitration process is not hindered at the threshold, especially when a
preliminary objection is raised by one of the parties. There are, however,
exceptions to the general application of this doctrine, as acknowledged by
the Supreme Court. The principle does not hold in cases where the arbitration
agreement itself is impeached on the grounds of fraud or deception. Further,
the principle would also not apply to cases where the parties in the course of
negotiations may have entered into a draft agreement as a step before the
execution of the final contract.

While concluding, the Supreme Court in Uttrakahand Purv case observed that
the point of limitation was a mixed question of fact and law and is also a
question of jurisdiction18. In this regard, the Supreme Court relied on the
decision in NTPC Ltd. v. Siemens Atkeingesellschaft to opine that the
Arbitral Tribunal would deal with limitation under Section 16 of the Arbitration
Act. Hence, the Arbitral Tribunal’s competence to rule upon its jurisdiction
was upheld.

The decision in Bharat Broadband Network Ltd. v. United Telecoms

Ltd. — carving out an exception The general rule in India suggests that the
question of limitation is to be referred to the Arbitral Tribunal. But what if the
very invocation of the arbitration itself appears to be time-barred? In BSNL v.
Nortel Networks India (P) Ltd., the Supreme Court of India dealt with a
peculiar case. The issue involved in the appeal was whether an application
filed under Section 11 of the Arbitration Act was liable to be rejected on
grounds of (i) the application being time-barred; and (ii) the claims being ex
facie time-barred. While allowing the appeal, the Supreme Court held that the
object of the Arbitration Act is to resolve disputes expeditiously. While
Section 11 of the Arbitration Act did not prescribe any period for filing an
application under sub-section (6) for appointment of an arbitrator, the
Supreme Court opined that Section 43 of the Limitation Act, 1963 (Limitation
Act) clearly provided that the provisions of the Limitation Act would apply to
arbitrations as well.

Further, since none of the articles in the Schedule to the Limitation Act
provided for a time period for filing an application for the appointment of an
arbitrator under Section 11, the residual provision under Article 137 was held
to be applicable. In terms of Article 137, the limitation for filing an application
under Section 11(6) was held to be of three years which would trigger from
the date of refusal to appoint the arbitrator, or on the expiry of 30 days in
terms of Section 11, whichever is earlier. While rendering these observations,
the Supreme Court was careful to point out that the period of limitation for
filing a petition seeking appointment of arbitrator(s) could not be confused or
conflated with the period of limitation applicable to substantive claims made
under the underlying contract.

The period of limitation for such claims would be prescribed under various
articles of the Limitation Act. The limitation for deciding the underlying
disputes was therefore, held to be necessarily distinct from that of filing an
application for the appointment of an arbitrator. On whether the court acting
under Section 11 of the Arbitration Act was mandated to appoint an arbitrator
even in a case where the claims are ex facie time-barred, the Supreme Court
observed that in view of the legislative mandate contained in amended
Section 11(6-A), a court was required to only examine the existence of the
arbitration agreement and all other preliminary or threshold issues were left
to be decided by the arbitration under Section 16 which enshrined the
principle of kompetenz-kompetenz. The Supreme Court concluded that it is
only in a very limited category of cases, where there is not even a vestige of
doubt that the claim is ex facie time-barred or that the dispute is non-
arbitrable that the Court may decline to refer the disputes to arbitration.
However, if there is even the slightest doubt, the general rule would continue
to apply, and the matter would be referred to arbitration
 ‘Court ‘under the Act -

In K.I.P.L. Vistacore Infra Projects J.V v. Municipal Corporation of the

City of Ichalkarnji (2024), a disagreement arose amongst the parties and
the arbitrator, whom the High Court nominated as per Section 11 of the Act.
Subsequently, an application for an extension of the mandate of an arbitral
tribunal as per Section 29A of the Act was submitted to the court. An
objection was raised on the validity of the petition. The Court said that in
relation to Section 29A as far as domestic arbitrations are concerned, the
“Court” mentioned in Section 2(1)(e) is the High Court that has the authority
to extend the mandate of the arbitrator and replace the arbitrator. The word
“Court” used in this provision must be construed in a contextual sense to
conform with the objective of the legislature and to avoid conflict with
Section 11.

In D.D.A v. Tara Chand Sumit Construction Co. (2020), the Court ruled
that Section 29A empowers the “Court” to adjudicate the application for an
extension to replace the arbitrator. Thus, if the appointment of the arbitral
tribunal was made by the High Court, it would be the High Court that would
be able to replace the arbitrator and not the District Court. As far as
international commercial arbitrations are concerned, such authority is
bestowed upon the Supreme Court.

Section 29A –

In Tata Sons Pvt. Ltd. v. Siva Industries and Holdings Ltd. (2023) The issue raised
was whether the amended Section 29A of the Act applicable prospectively or
retrospectively? The provisions of Section 29A, added in 2015, were prospective in
character on account of Section 26 of the 2015 Amendment Act. However, the Court said
that Section 29A gave rise to new conditions in relation to a proceeding that had already
begun because it laid down a stringent time limit for delivering the arbitral award. The
amendment is remedial in character as it makes an exception for international commercial
arbitrations from the restrictive timeline of 6 months. International commercial
arbitrations may be excluded from the scope of time frames stipulated in Section 29A.
However, the legislature has not explicitly excluded the applicability of subsection (3)
and (4) of Section 29A to international commercial arbitration.
The Supreme Court ruled that the amended Section 29A applies retrospectively to this
case. The sole arbitrator may lay down suitable procedural instructions for an extension
of time while trying to dissolve the dispute quickly. Further, the respondent’s contention
that the amended Section 29A would not apply to international commercial arbitration
was deemed invalid by the Supreme Court. The substantive portion of Section 29A(1)
makes it clear that the period of twelve months is not compulsory for international
commercial arbitration but is directory in nature.

In Rohan Builders (India) Private Limited v. Berger Paints India Limited (2023)
The issue raised was whether the Court can extend the decision of the arbitrators as per
Section 29A(4) after the mandates have expired? The Supreme Court noted that the 176th
Report of the Law Commission envisaged introducing the idea of “suspension of
mandate” to the proposed Section 29A and being applied for the intervening period
between “termination of mandate” and “filing of an application for the extension of the
mandate.” The Law Commission therefore put forward that subsequent to the cessation of
the arbitrator’s mandate to deliver an award as per Section 29A (1) or (3), the mandate
would remain deferred till an application is presented for extension of the mandate under
Section 29A (4). The “suspension of mandate” was, however, removed from the
subsequent Law Commission Report and finally from the Section as amended on
23.10.2015. A simple interpretation of Sub-Sections (5) and (6), together with the use of
the term “extend” in its various forms in Section 29A(4), means that the mandate of the
arbitral tribunal should be in existence at the time of submitting the application for
extension of the mandate under Section 29A(4). The terms applied in a statute should be
interpreted in their literal sense, giving due consideration to the “contextual placement”
as well as the legislative intent.

It was observed by the Court that Sub-Section (4) refers to the power of the court to
extend the “period so specified” either before or subsequent to the expiry of the period, as
stated in Sub-Section (1) or Sub-Section (3). There are two significant characteristics in
Section 29A(4) :-

 The phrase “unless the court has either prior to or after the expiry extended the
period” is not in respect to any application presented for extending the arbitrator’s
mandate.
 The court can extend the term when the application for extension has been filed while
the mandate of the arbitrator is still in force. This elucidation is in consonance with
the second proviso to Section 29A (4).
The scheme of Section 29A of the Act increases the pace of the arbitration proceedings.
The purpose of the Act in general and this Section is to expedite the arbitration
proceedings and to ensure that the arbitral award is delivered in a timely manner. This
provision contemplates the delivery of the arbitral awards within the stipulated statutory
time limits. The time limits should be interpreted as compulsory limits and the arbitrators
as well as the parties should be observant of the cut-off dates while applying for the
extension of the mandate of the arbitral tribunal. The court can pass an order allowing
extension only on sufficiency of cause. The Supreme Court held that the mandates, in this
case, ceased prior to the applications for extension being presented. The Court is therefore
precluded from extending the mandate.