No Prohibition On Court To Entertain More Than One Application U/S 29A A&C Act Seeking Extension Of Time: Madras HC
The Madras High Court allowed an Application seeking an extension of the mandate of the Arbitrator by extending another period of 6 months from January 5, 2025.
The Madras High Court observed that there is no prohibition on the Court to entertain more than one Application under Section 29A of the Arbitration Act, 1996 (A&C Act), seeking extension of time.
The Court observed thus in an Application seeking for extension of the mandate of the Arbitrator by extending another period of six months from January 5, 2025.
A Single Bench of Justice Abdul Quddhose elucidated, “… as seen from Section 29A of the Act, there is no prohibition for this Court to entertain more than one application under Section 29A of the Act seeking extension of time for the arbitrator to pronounce arbitral award. The only criteria that has been specified is that the applicant will have to show sufficient cause for granting extension of time for the arbitral tribunal to pronounce arbitral award.”
Factual Background
The Applicant filed the Application under Section 29A(5) of the A&C Act seeking extension of the Arbitrator's mandate by another period of six months from January 5, 2025. Notice was served on the counsel for the Respondent prior to the filing of this Application. This Application was filed before the High Court on December 26, 2024. No counter affidavit was filed by the Respondent, however, without a counter affidavit, the counsel for the Respondent submitted that since the Applicant had earlier filed an Application under the very same provision and had obtained extension of time for the Arbitrator to pronounce the arbitral award, the Applicant is barred under law to seek further extension by filing another Application under Section 29A(5) of the A&C Act. It was further submitted that the Application is not maintainable as the Applicant is legally permitted to file only one Application seeking extension of time for the Arbitral Tribunal to pronounce the award.
Reasoning
The High Court in the above context of the case, noted, “Section 29A intends to ensure a timely completion of arbitral proceedings while allowing the Courts flexibility to grant extension when warranted. Prescribing a prohibition by the Court restricting the number of times a party can approach seeking for extension of the Arbitrator's mandate, though the statute does not contain such a prohibition, will lead to penal and fatal consequences resulting in grave injustice.”
The Court added that a restrictive interpretation of Section 29A will cause disservice to the objects of introducing such a provision by the legislature, which has been introduced only to meet the ends of justice whenever a need arises for extending the mandate of the Arbitrator by giving sufficient reasons.
“A narrow interpretation of Section 29A should not be given by Courts, which may result in injustice to one of the parties to the dispute. If the intention of the legislature was to restrict the filing of Section 29A application under the Act, the legislature would have thought it fit to do so. Section 29A(5) of the Act only stipulates as to how such an application seeking for extension of the mandate of the Arbitrator will have to be considered by the Court and it has not restricted a party to seek for further extension, even though one extension was granted by the Court earlier”, it further said.
The Court emphasised that the only requirement for a party seeking extension of the Arbitrator's mandate is to show sufficient cause for filing such an Application.
The Court was, therefore, of the view that the Applicant is not at fault for causing delay in concluding the arbitration and that the Arbitrator is also not a cause for the delay in pronouncing the arbitral award.
“As seen from the dates and events, the respondent has chosen not to participate in the arbitration during certain dates, which have also been recorded by the Arbitrator, and they had also informed the Arbitrator that they will be filing an application seeking to recall the earlier order passed by this Court, through which, this Court had granted extension of time for the Arbitrator to pronounce arbitral award”, it also noted.
The Court said that only due to the conduct of the Respondent in delaying the proceedings, the Arbitrator was unable to pronounce arbitral award within the prescribed time.
“… sufficient cause has been shown by the applicant for extending the mandate of the Arbitrator by another period of six months as prayed for in this application. The objections raised by the learned counsel for the respondent without a counter affidavit are rejected by this Court, since this Court is having the power to entertain more than one application filed under Section 29A(5) of the Act, if the applicant is able to show sufficient cause for seeking extension”, it observed.
The Court concluded that, since sufficient cause has been shown by the Applicant, the Court will have to necessarily allow the Application as prayed for.
Accordingly, the High Court allowed the Application by extending the mandate of the Arbitrator for a period of 6 months and directed the Arbitrator to pronounce the arbitral award by then.
Cause Title- M/s. Powergear Limited, Chennai v. M/s. Anu Consultants, Hyderabad (Neutral Citation: 2025:MHC:332)
