Section 29A Of Arbitration Act Is Not About Court Sitting With A Calculator In One Hand & Whacking Stick In The Other: Calcutta HC

The Calcutta High Court has said that Section 29A of the Arbitration and Conciliation Act, 1996 is not about the Court sitting with a calculator in one hand and a whacking stick in the other, but about ensuring that the parties and arbitral tribunal do not contribute to an inordinately long arbitration process.

The Court said thus in a case in which the petitioner i.e., a company prayed for extension of the mandate of the arbitrator in an application filed under Section 29A(4) of the aforesaid Act.

A Single Bench of Justice Moushumi Bhattacharya observed, “It would be worthwhile to bear in mind that section 29A of the 1996 Act is not about the Court sitting with a calculator in one hand and a (whacking) stick in the other; but about ensuring that the parties and the arbitral tribunal do not contribute to an inordinately long arbitration process. Section 29A underlines the distinction between an indifferent litigant who allows the mandate to terminate and a vigilant litigant who makes its best effort to meet the timelines but is caught in the games played by the opponent. The present case falls in the latter category.”

The Bench said that there is nothing on record to show that the petitioner took the timelines for granted or fell off the radar during the course of arbitration and that the respondent on the other hand was the wily negotiator who sat on the fence, dangled its legs and tried to push the petitioner over the rails of Section 29A.

Advocate Priyankar Saha represented the petitioner while Advocate Rohit Das represented the respondent.

Factual Background -

The pleadings were completed on September 30, 2022 and the 12 months, from the date of completion of pleadings under Section 29A(1), ended on October 1, 2023. The petitioner company sought to take advantage of Section 12 of The Limitation Act, 1963 and Section 9 of the General Clauses Act, 1897, to say that the first date i.e., October 1, 2023 would get excluded. The company also sought to take the benefit of October 2, 2023 being a national holiday and a Court holiday as also Section 4 of The Limitation Act. An application was, therefore, filed on the next working day i.e., October 3, 2023.

The issue that arose for consideration was whether the company filed the application for extension of the mandate of the arbitrator within the timelines prescribed under Section 29A of The Arbitration and Conciliation Act, 1996. The company’s case was that the timeline should be calculated from September 30, 2022 which was the date for completion of pleadings for the purpose of Section 29A(1) of the Act. The respondent company (Bharat Heavy Electricals Limited i.e., BHEL) however contended that the date of completion of pleadings should be taken as August 20, 2022. BHEL relied on Section 23(4) of the 1996 Act in support of its contention.

The High Court in the above regard noted, “Consent of the parties for extension of the mandate under section 29A(3) is an additional window for the arbitral tribunal to make the award. The timelines under section 29A cast a responsibility on the parties not only to obtain consent from the other, in the event the parties seek extension of the mandate; but also on the other party to communicate the refusal (to give consent) during the subsistence of the mandate.”

The Court added that one party cannot be held responsible for slipping of the timelines particularly where the other party does not communicate a clear and unequivocal “no consent”.

“The present application was hence filed within subsistence of mandate and the petitioner has been able to make out a case for extension of the mandate under section 29A(4) of Act. … There is nothing to suggest that the provisions of The Limitation Act or the General Clauses Act will not apply under section 29A of the 1996 Act particularly where 2nd October, 2023 was a declared national holiday”, further observed the Court.

Accordingly, the High Court allowed the application by extending the mandate for six months, from October 1, 2023 till March 31, 2024.

Cause Title- Satnam Global Infraprojects Limited v. Bharat Heavy Electricals Limited

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