Award Passed After Expiry Of Arbitrator's Mandate Is Non-Est, Court Can't Extend Mandate Post-Award: Delhi High Court

The Delhi High Court held that an award passed after expiry of the arbitrator's mandate is non-est and unforceable holding that the court has no power to extend the mandate post award if no application seeking extension of the mandate was pending before the award was passed. A Division bench of Justice V. Kameswar Rao and Justice Vinod Kumar held that the award becomes operational only when it is written,dated and signed by the arbitrator giving reasons on which it is based and the place of the Arbitration where it was made. All these acts were not done on or before 01.11.2024, but after the expiry of the arbitrator's mandate. Since all these actions occurred after the expiry of the mandate, the award was invalid. Background: The dispute arose out of a contract executed between Sarvesh Security Services Pvt. Ltd. (Appellant) and the Institute of Human Behaviour and Allied Sciences (IHBAS/Respondent) concerning outstanding dues for security services provided by Sarvesh Security at IHBAS's hospital. On failure of amicable resolution of dispute, the appellant approached the High Court under section 11(6) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) seeking appointment of the arbitrator. The court directed the Delhi International Arbitration Centre (DIAC) to appoint the arbitrator. The matter was reserved for award on May 13, 2024. The award was eventually signed and delivered after expiry of the arbitrator's mandate on November 9, 2024. After receiving the signed copy of the award, the appellant filed an application under section 29A(5) seeking extension of the arbitrator's mandate. In parallel, IHBAS raised objections stating that the award had been passed expiry of the arbitrator's mandate, it was non-est and unenforceable. Relying on Power Grid Corporation of India Ltd., the Single Judge held that an award passed after expiry of time period is void. The Court further held that since the award was passed 3 days after the expiry of the mandate and no petition seeking extension was pending at that time, the award was void. Aggrieved, Sarvesh Security Services had filed an appeal under section 37 of the Arbitration Act. The Appellant submitted that the award bore an internal date of October 31, 2024 which was within the arbitrator's mandate and that the subsequent pronouncement of the arbitral award on November 4 was merely a ministerial act due to holidays. It was further contended that the scheme of Sections 29A and 31 of the Act contemplates the making of the award within time and not its pronouncement and the finding to the contrary, is legally unsustainable. It relied on section 4 of the Limitation Act stating that any act done after the next working day after the closure of the court is deemed within limitation. Per contra, IHBAS submitted that section 29A of the Arbitration Act does not contain any provision which empowers the court to extend the arbitrator's mandate after expiry. Findings: The court held that the court under section 29A is not empowered to validate an award retrospectively when it is passed after the expiry of the arbitrator's mandate. The court further held that the arbitrator's mandate can be extended before or after the expiry of the time period provided under section 29A. It can be extended after expiry provided the arbitral proceedings are pending. “The consistent view taken by this Court is that Section 29A does not empower or enable the Court to grant extension of the mandate of the Arbitral Tribunal after the award is passed, unless the application for extension is filed prior thereto and the award is made during its pendency", the court held. Relying on Power Grid Corporation of India Ltd., the court held that where the petition seeking arbitrator's mandate is pending before the award is delivered, the award can be validated. However, if the petition is filed after the award is delivered, such petitions are not maintainable. The court distinguished Rohan Builders stating that the Apex Court held that the application could be filed after the expiry of the arbitrator's mandate but before the award was delivered. It had no bearing where the award was passed after the expiry of the mandate. On Applicability of section 4 of the Limitation Act, the court held that the present case concerned the existence of the arbitrator's mandate, not computation of the limitation period. It held that “the question is not of the applicability of the Limitation Act but whether the mandate of the learned Arbitrator to make the award exists or continues. It existed till 01.11.2024 and not thereafter.” The court further held that the award becomes operational only when it is written, signed and dated. Since all these actions occurred after the expiry of the mandate, the award was invalid. Accordingly, the court dismissed the present appeal holding that since the award had been ...

Award Passed After Expiry Of Arbitrator's Mandate Is Non-Est, Court Can't Extend Mandate Post-Award: Delhi High Court

Mohd Malik Chauhan

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Award Passed After Expiry Of Arbitrator's Mandate Is Non-Est, Court Can't Extend Mandate Post-Award: Delhi High Court

Mohd Malik Chauhan

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Mohd Malik Chauhan

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