Failing Timelines under Section 29-A of the Arbitration and Conciliation Act, 1996 — A Practitioner’s Insight

Introduction

Section 29-A¹ of the Arbitration and Conciliation Act, 1996 (1996 Act)² inserted by the Arbitration and Conciliation (Amendment) Act, 2015 (2015 Amendment)³ was envisioned as a discipline-enforcing provision. By capping the period for making an arbitral award to 12 months from the date of completion of pleadings and making it extendable by a further period of 6 months with consent of the parties, the legislature aimed to transform arbitration into a genuinely time-bound process.

Nearly a decade later, the provision’s practical impact tells a different story. Real-world delays, procedural complexities, and evolving judicial interpretations have chipped away the intended rigour.

This article examines how and why Section 29-A’s timelines are faltering in practice and highlights structural and operational defects that undermine its purpose in India’s arbitration landscape.

Delay by design and default

From a practitioner’s perspective, while the idea of wrapping up arbitral proceedings within a 12-month framework may appear to be attractive at first glance, it often proves impractical when tested against the complex and layered realities of intricate and multilayered commercial disputes. The legislature has not fully accounted for factors such as: (i) multiparty proceedings; (ii) voluminous evidence both documentary and oral; (iii) procedures based on principles of the Civil Procedure Code, 1908⁴ and the Evidence Act, 1872⁵ (now the Sakshya Adhiniyam, 2023⁶); (iv) frequent adjournments on account of the parties; and (v) absence of specific timelines for the Tribunal to decide interim or procedural applications (for instance, the ones filed under Sections 16⁷, 17⁸, 26⁹ and 27¹⁰ of the 1996 Act).

Collectively, these issues tend to push the proceedings well beyond the statutory limits. Meanwhile, the judiciary has liberally exercised its discretion in extending the timelines under Section 29-A(4), sometimes without imposing any meaningful cost on the parties or reducing the fees of the Tribunal or substituting the Tribunal (in case of latter’s fault). The judicial leniency, though justified in certain cases, has resulted in dilution of the timelines and in turn made it an aspirational benchmark rather than a mandate.

Evolution of Section 29-A: From rigid timelines to judicial calibration

The courts have played a pivotal role in shaping how Section 29-A operates, exposing both its strengths and structural limitations.

(1) Jurisdictional ambiguity

Early cases grappled with the “correct court” to extend the arbitrator’s mandate:

In URC Construction (P) Ltd. v. BEML Ltd.¹¹, the Kerala High Court held that only the Principal Civil Court of Original Jurisdiction could entertain Section 29-A extension, excluding non-charter High Courts. This narrow definition was overruled in Lots Shipping Co. Ltd. v. Cochin Port Trust¹², where the Kerala High Court adopted a purposive reading, extending jurisdiction to High Courts that appointed arbitrators under Section 11¹³.

The Gujarat High Court in Nilesh Ramanbhai Patel v. Bhanubhai Ramanbhai Patel¹⁴ explicitly rejected the URC ruling¹⁵, holding that when arbitrators are appointed by the High Court or Supreme Court, the appointing court and not the District Court has extension jurisdiction.

The aforesaid reasoning was endorsed by the Delhi High Court in DDA v. Tara Chand Sumit Construction Co.¹⁶ and by the Bombay High Court in Cabra Instalaciones Y. Servicios v. Maharashtra State Electricity Distribution Co. Ltd.¹⁷ and Indicus Software (P) Ltd. v. Infinite Uptime India (P) Ltd.¹⁸

Finally, the Supreme Court in State of Meghalaya v. BSC-C & C JV¹⁹ conclusively held that Section 29-A(4) jurisdiction lies only with the “Court” as defined under Section 2(1)(e)²⁰ i.e. the Principal Civil Court of Original Jurisdiction, or a High Court only if the latter exercises ordinary original civil jurisdiction. Any substitution under Section 29-A(6) must follow from this Court’s extension power. This aligns with the Kerala High Court’s later purposive approach, while affirming that not every High Court qualifies unless it has original jurisdiction.

The practical implications of the aforesaid ambiguity may have resulted in delay in passing the awards and created a procedural limbo, thereby undermining the goal of the legislature to expedite the proceedings.

(2) Timing of extension applications

Apart from the jurisdictional aspect, the courts also took a divergent view on when an application for extension of mandate is to be preferred.

The Calcutta High Court in Rohan Builders (India) (P) Ltd. v. Berger Paints India Ltd.²¹ and the Patna High Court in South Bihar Power Distribution Co. Ltd. v. Bhagalpur Electricity Distribution Co. (P) Ltd.²², had held that an application for extension of time under Section 29-A sub-sections (4) and (5) can only be made before the expiry of the mandate of the Tribunal. Once the mandate comes to an end on account of efflux of time of 12 months (or additional 6 months) the Court loses its powers to further extend the mandate.

However, the Delhi High Court in ATC Telecom Infrastructure (P) Ltd. v. BSNL²³, Wadia Techno-Engg. Services Ltd. v. Married Accommodation Project Directorate²⁴, ATS Infrastructure Ltd. v. Rasbehari Traders²⁵, Power Mech Projects Ltd. v. Doosan Power Systems India (P) Ltd.²⁶, KMP Expressways Ltd. v. IDBI Bank Ltd.²⁷ and Reliance Infrastructure Ltd. v. Madhyanchal Vidyut Vitran Nigam Ltd.²⁸; the Bombay High Court in Nikhil H. Malkan v. Standard Chartered Investment and Loans (India) Ltd.²⁹; the Kerala High Court in Hiran Valiiyakkil Lal v. Vineeth M.V.³⁰; the Jammu and Kashmir and Ladakh High Court in H.P. Singh v. Railways³¹ and the Madras High Court in G.N. Pandian v. S. Vasudevan³² have taken a view that an application for extension of mandate can be filed even after the expiry of 12 months (or extended period of 6 months) as contemplated under Section 29-A. The Calcutta High Court in its subsequent decision in Ashok Kumar Gupta v. M.D. Creations³³ has changed its stance to suit the above views of the various High Courts.

The Supreme Court in Rohan Builders (India) (P) Ltd. v. Berger Paints India Ltd.³⁴, has settled the law and accepted the aforesaid views of the Delhi, Bombay, Madras and Kerala High Courts and held that: (i) the courts have the power to extend the period for making an award at any time before or after the mandated period; (ii) the arbitral proceedings can continue during the pendency of an application to extend the mandate. However, the arbitrator ”may not” pronounce her award till the time the Court has decided upon its Section 29-A application; (iii) the extension of time is to be granted if “sufficient cause” is shown by the parties; and (iv) the extension is not to be granted mechanically, but it is a judicial exercise of discretion vested in the courts.

The practical implication of the Supreme Court’s judgment³⁵ is that it preserves flexibility, whilst making the deadlines under Section 29-A merely aspirational. This judgment³⁶ highlights the tension between the legislative intents and arbitral realities.

Exceeding litigation expense by creating parallel proceedings

Extending the Tribunal’s mandate often triggers additional legal cost. Parties may file multiple applications after the expiry of the initial period of 18 months, eroding arbitration’s promise as a quicker, cost-effective alternative to litigation.

Way forward: Strengthening Section 29-A

(1) Party-driven extensions based on dispute complexity

Parties, by mutual consent, should be allowed to extend the Tribunal’s mandate.

The duration of such extensions should reflect the complexity of the dispute, restore party autonomy while minimising judicial intervention.

(2) Flexible, non-uniform extension periods

There cannot be a rigid formula granting 6-month extensions for all arbitrations. Parties should be allowed to determine the extension period appropriate to their case, allowing for greater procedural efficiency.

(3) Judicial remedies for aggrieved parties

An aggrieved party should be able to approach the Court under:

(a) Section 12 read with Section 13; or

(b) Section 15 (to terminate the arbitrator’s mandate); or

(c) Section 37 (to challenge procedural orders extending the mandate).

Courts should ensure fast-track hearings for such proceedings to reduce delay.

(4) Accountability mechanisms

Parties causing delays should bear exemplary costs. If the Tribunal is responsible for delays, a reduction in fees (e.g. 15% per month of delay) could be imposed, reinforcing compliance with statutory timelines.

(5) Procedural and administrative reforms

(a) Periodic reporting: Tribunals could periodically report to the appointing court, creating empirical data for effective monitoring.

(b) Standardised templates: Courts may standardise applications under Section 29-A to reduce voluminous pleadings.

(c) Mandatory disposal timeline: Courts could be mandated to decide Section 29-A applications within 30 days from filing, ensuring timely judicial intervention.

The practical impact of these reforms would be combining flexibility, accountability and procedural efficiency, it can transform Section 29-A from a symbolic benchmark into a practical tool for expeditious arbitration. Addressing these structural and procedural defects requires a combination of legislative refinement, tribunal autonomy and judicial efficiency.

Conclusion: Section 29-A — A lion without teeth

Nearly a decade in, Section 29-A remains a paradox: a speed gun without radar, a lion without teeth. Unless the legislature recalibrates timelines to match the dispute complexity, grants tribunals to manage procedures and enforce consequences for delay, the provisions will continue as a symbolic benchmark rather than a practical instrument for expedited arbitration.