10 Sep 2023 6:17 AM GMT
The Arbitration and Conciliation Act, 1996 amended in 2015 first introduced section 29A which prescribed the time limit of 12 months for an Arbitral Tribunal to conclude the proceedings and pass an award from the date it enters reference. The objective of the amendment was to expediate the arbitration proceedings and to make them more time efficient and desirable to the...
The Arbitration and Conciliation Act, 1996 amended in 2015 first introduced section 29A which prescribed the time limit of 12 months for an Arbitral Tribunal to conclude the proceedings and pass an award from the date it enters reference. The objective of the amendment was to expediate the arbitration proceedings and to make them more time efficient and desirable to the parties.
In the year 2019 another amendment was made to Section 29A after which the time limit of 12 months for passing the award now begins to run from the date of completion of pleadings as per section 23(4) of the Act. Section 23(4) of the Act provides that the filing of the Statement of Claim and Statement of Defense shall be completed within the period of 6 months from date on which the arbitrator(s) receive notice of appointment.
From the plain reading of the two provisions, it can be deduced that the award shall be made by the Arbitral Tribunal within 12 months of completion of pleadings which includes Statement of Claim and Statement of Defense, which also have to be concluded within the time frame of six months from the date on which Arbitral Tribunal receives notice of appointment. Hence ideally as per the provisions of the law, an arbitration proceeding must be concluded within 18 months from the date on which the arbitrator(s) receive notice. As per section 29A court has discretion to further extend this period up to 6 months if required so.
Even though it has been a commendable step taken by the legislature to make arbitration proceedings more expedient, the provisions still require more clarity for their true and intended implementation. The onus of such implementation through proper interpretation of the provisions falls on the judiciary.
One of such impediments has been of ascertaining the meaning of the phrase ‘completion of pleadings’. It has not been discussed actively by the courts as to what shall be considered the part of the pleadings and when shall pleadings be considered complete. Therefore the question subsists :-
Shall Counterclaim and Defense to Counterclaim be considered part of pleadings while calculating the date from which the 12-month period will run?
As per section 2(9) of the Act every provision that is applicable to Claim and Defense is applicable to Counterclaim and Defense to such Counterclaim and same was iterated by the Supreme Court in the case of State Of Goa v. Praveen Enterprises but the question whether it can be extended to section 23(4) and 29A hasn’t been categorically dealt by the Court. Hence it cannot be said that there is clarity as to whether to Counterclaims and Defense to Counterclaims shall be considered part of pleadings or not.
In a recent Delhi High Court judgement Harkirat Singh Sodhi v. Oram Foods Pvt. Ltd., issue pertaining to the same was raised by the respondent. The respondent argued that the pleadings shall be considered concluded upon filing of Statement of Claim and Statement of Defense. The counsel made submission that any subsequent filing of Counterclaim and Defense to Counterclaim filed after statement of Defense shall not be considered as part of pleadings for the purposes of section 23(4) and 29A of the Act while calculating the beginning point of the 12-month period.
The Court while deciding the issue, considered the subsequent date of filing of the Counter-Claim and Defense to Counter Claim for purpose of calculating the 12 month period, however, the court did not go into merits of arguments of respondent and commented: -
“ In these circumstances, this court sees no reason to delve any further into the hyper-technical legal objections raised on behalf of respondents Nos. 1 and 2 as to whether the phrase „completion of pleadings" as contained in section 29A of the A&C Act is to include or exclude the time for filing of rejoinders, based on the wording of section 23(4) of the A&C Act which refers to filing only of the statement of claim and statement of defence. This court is constrained to note that regrettably, the conduct of respondents Nos. 1 and 2 betrays an effort to nullify arbitral proceedings that have now finally come to fruition with the arbitral award having been rendered….”
Even though it is the duty of the Courts to interpret and give meaning to the provisions for their proper implementation, the Court avoiding to delve into such issues of interpretation merely on the grounds of them being “Hyper-technical” does not provide clarity to the law that is so required. Hence in the absence of any active discussion regarding the same, since Court while considering the date of completion of pleadings included the time period for filing the Counterclaim and Defense to the Counterclaim, only an indicative assessment can be made as to the phrase “completion of pleadings” and inclusion of subsequent filling of Counterclaim and its Defense within its ambit.
Arbitration is still a developing law and latest 2019 amendment to section 29A is a commendable step which provided for expedient award in arbitration cases. Although for its proper implementation, the gaps that are left for interpretation by courts needs to be addressed. In absence of any direct explanation or active discussion in legislature or judiciary, such case laws as discussed above only provides some limited insight of how courts apply the provision and interpret it.
Views are personal.
 2011 AIR SC 3814
 2023 DHC 4317