Award Passed After Arbitrator's Mandate Expiry Not Void If Court Extends Time: Supreme Court

In a notable development, the Supreme Court on Tuesday (February 3) held that where an arbitral award is rendered beyond the statutory period prescribed under Section 29A, such an award, though rendered after the tribunal's mandate has technically terminated, can be given effect if an application is filed before the competent court under Section 29A seeking extension of the arbitral tribunal's mandate. “…we are of the opinion that provisions of the Act, particularly Section 29A, must not be interpreted to infer a threshold bar for an application under Section 29A(5) for extension of the mandate of the arbitrator even when an award is passed, though after the expiry of the mandate.”, observed a bench of Justices PS Narasimha and Atul S. Chandurkar. The dispute stemmed from three sale agreements, leading to the appointment of a sole arbitrator by the Madras High Court on April 19, 2022. After pleadings concluded on August 20, 2022, the 12-month period under Section 29A commenced and was extended by six months with the parties' consent, fixing February 20, 2024 as the deadline. Although the matter was reserved for award in September 2023, it was reopened for settlement talks, which failed. The arbitrator eventually delivered the award on May 11, 2024, after the mandate had expired. This prompted parallel proceedings, with the respondent challenging the award under Section 34, arguing that the award passed beyond the statutory time limit and expiry of the arbitral tribunal's mandate was non-est. The Appellant, on the other side, sought an extension of the mandate under Section 29A(5). By its order, the Madras High Court dismissed the Appellant's extension plea, but allowed the Respondent's plea for setting aside the award, prompting the Appellant to move to the Supreme Court. The issue was “whether a Court can entertain an application under Section 29A(5) of the Arbitration and Conciliation Act, 1996 to extend the mandate of the arbitrator(s) for making the award even after an 'award' is rendered, though after the expiry of the statutory limit of eighteen-month period?” Answering positively, the Court disagreed with the High Court's approach and held that Section 29A does not impose any statutory bar on courts extending the mandate after an award has been delivered. The Court observed that the termination of an arbitrator's mandate under Section 29A(4) is not absolute and is expressly made subject to the court's power to extend time “prior to or after the expiry” of the prescribed period, as held in Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd. (2024). The Court held that an award passed after expiry of the mandate is ineffective and unenforceable, but not a nullity that automatically deprives the court of jurisdiction to revive the arbitral process. Such an award, the Bench clarified, does not require to be set aside under Section 34 if the mandate is subsequently extended. “…we hold that an application under Section 29A(5) for extension of the mandate of the arbitrator is maintainable even after the expiry of the time under Sections 29A(1) and (3) and even after rendering of an award during that time. Such an award is ineffective and unenforceable. But the power of the court to consider extension is not impaired by such an indiscretion of the arbitrator.”, the court observed. “If the mandate is extended, the arbitral tribunal will pick up the thread from where it was left, and seamlessly continue the proceeding from the stage at which the mandate had expired, and conclude within the time granted.”, the court added. In support, the Court relied on some foreign precedents where the Courts have retroactively extended timelines and even upheld awards rendered outside agreed deadlines where it was necessary to preserve justice and prevent the arbitration from being defeated by technical non-compliance. Accordingly, the appeal was allowed, and Appellant's application for extension was restored before the High Court. Cause Title: C. VELUSAMY VERSUS K INDHERACitation : 2026 LiveLaw (SC) 105Click here to download judgmentAppearance: For Petitioner(s) :Mrs. V Mohana, Sr. Adv.(arguing counsel) Mr. B Ragunath, Adv. Mr. Pranav V Shankar, Adv. Mrs. N C Kavitha, Adv. Mrs. Nimisha Thomas, Adv. Mr. Vijay Kumar, AOR Ms. Runjhun Garg, Adv. For Respondent(s) :Mr. M. Vijayan, Adv.(arguing counsel) Mr. M. Harish Kumar, Adv. Mr. P. S. Sudheer, AOR Mr. Rishi Maheshwari, Adv. Ms. Anne Mathew, Adv. Mr. Bharat Sood, Adv. Mr. Jai Govind M J, Adv. Mr. Jashan Vir Singh, Adv.

Award Passed After Arbitrator's Mandate Expiry Not Void If Court Extends Time: Supreme Court

Yash Mittal

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Award Passed After Arbitrator's Mandate Expiry Not Void If Court Extends Time: Supreme Court

Yash Mittal

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

This is a premium content
Available exclusively to
Our subscribers