Court can extend arbitration mandate even after 180-day period under Section 29A expires: Bombay High Court

The Bombay High Court recently held that applications under Section 29A of the Arbitration Act to extend the time to complete the arbitration beyond the statutory limit can be entertained even after such period has expired [Nikhil Malkan & Ors v. Standard Chartered Investment and Loans (India) Ltd]..Section 29A states that an arbitration award must be rendered within twelve months (extendable at the first instance by six months) from the date of completion of pleadings. Section 29A(4) permits a jurisdictional court to further extend the period of the arbitral tribunal’s mandate either before or after the expiry of the eighteen-month time period specified under Section 29A (1) and (3) of the Act..Justice Manish Pitale observed that the object of Section 29A would be defeated if courts cannot exercise their power to extend the mandate of the arbitrator under Section 29(4) after the expiry of the period stipulated."This Court finds that the purpose for which Section 29A was introduced in the aforesaid Act would be defeated, if it is to be held that the Court could exercise power to extend the mandate of the learned Arbitrator even after expiry of the extended period only if the application or petition for extension of mandate is filed prior to expiry of such mandate. There is nothing in the provision to indicate that if such an application or petition is not filed before the expiry of the mandate of the learned Arbitrator, the Court would be rendered powerless to exercise its authority," the order stated. .The Court added that no purpose would be served by holding that a Section 29A application to extend the mandate of the arbitrator cannot be filed after the mandate has expired. "Any apprehension regarding inordinate and unexplained delay on the part of the party approaching the Court can be addressed by holding that the Court would extend the mandate only when it is satisfied that sufficient grounds are made out for granting an extension of mandate of the learned Arbitrator," the judge further reasoned. .The petitioner before the Court, Nikhil Malkan, had sought an extension of the mandate of an arbitrator, which had expired in August 2023. It was argued that the mandate had earlier expired in February 2023. However, the parties had extended the mandate by consent for six more months.By the time the six-month extension expired in August 2023, the arbitration proceedings had reached the stage of final hearing. The final hearing commenced from September 11. When the proceedings were at the stage of rejoinder arguments, an objection was raised by the respondents, SCIL, that the mandate of the arbitrator had expired. Aggrieved by the objection, Malkan approached the High Court seeking the extension of the expired mandate..SCIL opposed the application while referring to two judgments of the Calcutta High Court and a division bench judgment of the Patna High Court. These judgments indicated that even if courts retained their power to extend the mandate of the arbitrator after the expiry of the stipulated period, an application seeking such extension was required to be made prior to expiry of the extended period. .Justice Pitale disagreed with the views of the two courts and thus rejected the contentions raised by SCIL. The Court also noted that the arbitration proceedings in this case were virtually at the stage of culmination. Therefore, sufficient grounds were made out for seeking a further extension of the arbitrator's mandate, the Court said. In view of this, the mandate was extended till March 31, 2024. .Advocates Firoz Bharucha and Abhhishek Bhaduri appeared for Malkan.Advocates SM Algaus, Murtaza Kachwalla and Palash Moolchandani, briefed by Argus Partners, appeared for SCIL..[Read Order]