Court Empowered To Extend Time For Passing Arbitral Award Even If It Is Already Passed: Kerala High Court

Brief Fact:

The matter pertained to an arbitral award for which the time allotted lapsed on 28.2.2022. However, the award was not rendered until 6.5.2023, without any formal extension of the tribunal's mandate. While one party to the arbitration, the 2nd respondent, complied with the award by paying the owed amount, the 1st respondent appealed the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 before the Commercial Court, alleging that the award was invalid as it was issued after the tribunal's mandate had terminated.

Subsequently, interlocutory applications (IAs) were submitted, arguing that the arbitral tribunal had overlooked the expiration of the allotted time on 1.3.2023, rendering the applications appropriate for consideration by the court. The Respondent in the I.A contended that applications for time extension could have been filed either before or after the expiry of the stipulated time, but crucially, before the issuance of the arbitral award. It argued that there exists a disparity in judicial opinions regarding the permissibility of filing time extension applications after the maximum period provided by Section 29A of the Arbitration Act, even with parties' consent.

Observations by the High Court:

Upon considering the arguments presented before the High Court, the primary question at hand pertains to the permissibility of filing an application under Section 29A(5) of the Arbitration and Conciliation Act, 1996, subsequent to the rendering of an arbitration award.

The contention raised by the respondent's counsel asserts that the arbitral tribunal's mandate terminates upon the expiry of the prescribed time for issuing the award, without extension by the parties as per Section 29A (3) of the Act. This position is supported with reference to Section 32 of the Act.

The High Court noted that Section 29A (3) and (4) of the Arbitration Act allows for the submission of an application for time extension either before or after the expiration of the stipulated time frame for concluding proceedings. It further observed that such applications are directed to the Court, and the decision to extend the time rests upon the Court's determination of the existence of genuine and justifiable reasons.

Moreover, the High Court highlighted the significance of the second proviso to Section 29A(4), emphasizing that the arbitrator's mandate continues until the disposition of the extension application, regardless of whether it is submitted before or after the expiry of the mandate. Additionally, a careful examination of Section 32 of the Act reveals that the termination of the arbitrator's mandate is not absolute, as it remains subject to other provisions of the Act, such as Section 33 and Sub-section 4 of Section 44 of the Arbitration Act.

Therefore, the High Court held that the termination of the arbitrator's mandate does not strip the Court of its authority to consider applications for extension under Section 29A(3) and (4). Rather, the termination is contingent upon the Court's power to extend the mandate, as provided by the Arbitration Act. The High Court held that it has jurisdiction to extend the time for passing the award even after its issuance, provided there exist sufficient grounds for such an extension.

The High Court found that the circumstances surrounding the COVID period, as stated in the interlocutory applications, constituted sufficient cause to justify an extension of the time for passing the award until 6.5.2023. Thus, the High Court affirmed its authority to intervene and extend the time limit even after the issuance of the award.

Case Title: Rkec Projects Limited Vs The Cochin Port Trust, The Office Of Chief Engineer And Another.

Case Number: IA.NO.1/2023 IN AR NO. 53 OF 2019

Advocate for the Petitioner: Sri. T. Krishnanunni, Senior Advocate Along With Sri. Jaykar K.S., Sri. V.S. Robin, Sri. G. Balu, Smt. M. Ramya Ramachandran, Sri. K.G. Jayaprakash Narayanan

Advocate for the Respondent: Sri. M.Gopikrishnan Nambiar, Sri. K.John Mathai, Sri. Joson Manavalan, Sri. Kuryan Thomas, Sri. Paulose C. Abraham

Click Here To Read/Download Order