Arbitral Award Passed After Arbitrator's Mandate Expires Can Be Enforced If Court Extends Time Subsequtently: Supreme Court

The Supreme Court on Tuesday (February 3) held that arbitral awards delivered beyond the statutory timeline prescribed under Section 29A of the Arbitration and Conciliation Act, 1996, do not automatically become ineffective.

The Court clarified that such awards remain ineffective and unenforceable at that stage but may still be given effect if a party approaches the competent court seeking an extension of the arbitral tribunal's mandate under Section 29A.

“…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 comprising Justices P.S. Narasimha and Atul S. Chandurkar.

The dispute originated from three sale agreements and culminated in the appointment of a sole arbitrator by the Madras High Court on April 19, 2022. Following the conclusion of pleadings on August 20, 2022, the statutory 12-month period under Section 29A commenced.

With mutual consent of the parties, this period was extended by six months, fixing February 20, 2024, as the outer limit for making the award.

Although the matter was reserved for award in September 2023, proceedings were reopened to explore settlement possibilities, which ultimately failed. The arbitrator rendered the award on May 11, 2024—after the expiry of the mandate. This triggered parallel proceedings, with the respondent challenging the award under Section 34 on the ground that it was rendered beyond the statutory time limit and after the termination of the arbitral tribunal's mandate, contending that the award was non est.

The appellant, meanwhile, moved an application under Section 29A(5) seeking extension of the arbitrator's mandate.

The Madras High Court dismissed the appellant's application for extension while allowing the respondent's plea to set aside the award. This led the appellant to approach the Supreme Court.

The central issue before the apex court 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 in the affirmative, the Supreme Court rejected the High Court's interpretation and held that Section 29A does not impose any statutory prohibition on courts extending an arbitrator's mandate after an award has been delivered. The Court emphasised that termination of the mandate under Section 29A(4) is not absolute and is expressly subject to the court's power to extend time “prior to or after the expiry” of the prescribed period, as recognised in Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd. (2024).

The Bench further clarified that while an award passed after expiry of the mandate is ineffective and unenforceable at that stage, it is not a nullity that automatically strips the court of jurisdiction to revive the arbitral process. Such an award, the Court noted, 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.

The Supreme Court also referred to international jurisprudence where courts have retrospectively extended arbitral timelines and upheld awards delivered outside agreed deadlines to prevent commercial disputes from being derailed by procedural technicalities.

Allowing the appeal, the court restored the appellant's application seeking an extension of the arbitrator's mandate before the Madras High Court.

For Appellant: Senior Advocate V. Mohana

For Respondent: Advocate M. Vijayan, Advocate, assisted by Mr. P.S. Sudheer, AOR