Arbitration Can Be Revived Even After Arbitrator's Mandate Ends: Jammu & Kashmir & Ladakh High Court

The Jammu & Kashmir and Ladakh High Court has reiterated that even after an arbitrator's mandate terminates for failure to make an award within the statutory period, a court can revive the arbitral proceedings by extending the time, and such an application is maintainable even after the mandate has expired.

Justice Sanjay Dhar made the observation while extending by two months the time for a sole arbitrator to make an award in a contractual dispute arising out of a street-lighting project on the National Highway Bypass from Athwajan to Parimpora in Srinagar.

The court observed, "It is also clear that if an Arbitrator does not make an award within the time period stipulated under sub-section (1) of Section 29-A of the Act or the extended time, the termination of arbitral mandate would not be absolute, but the proceedings before the Arbitrator can continue if the Court allows an application for extension of time, which may be filed even after the termination of mandate of the Arbitrator in terms of sub-section (4) of Section 29-A of the Arbitration and Conciliation Act."

The dispute arose from a contract awarded by the Government of Jammu & Kashmir to Ali Mohammad Baba for a street-lighting project on the Srinagar bypass. After disputes surfaced, the high court directed the Government to appoint an arbitrator. Although the statutory period for making the award expired in November 2019, the arbitration continued without any application for extension.

In April 2024, the Government sought termination of the arbitral proceedings, arguing that the contractor's claim was not maintainable as it was not a registered firm. The arbitrator kept the proceedings on hold but rejected the objection, prompting the Government to move the high court. The contractor, meanwhile, sought extension of time under Section 29-A of the Arbitration and Conciliation Act.

Before the high court, the government argued that the arbitrator's mandate had lapsed and sought his replacement. The contractor attributed the delay to repeated adjournments by the Government, the abrogation of Article 370 and the COVID-19 pandemic, adding that the matter had reached the final stage of arguments.

Referring to the Supreme court's decision in Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd., the high court held that although the arbitrator lacked jurisdiction to decide the maintainability objection after expiry of his mandate, the proceedings could still be revived by extending the time under Section 29-A.

Finding that the arbitration had substantially progressed and that the delay was largely attributable to the Government, the court extended the time for making the award by two months. It declined to substitute the arbitrator, set aside the finding on the Government's maintainability objection and directed the arbitrator to decide that issue afresh after hearing both parties.

For Petitioner (M/s Ali Mohammad Baba): Senior Advocate Z. A. Shah and Advocate Hanan Kalwal.

For Respondent (UT of J&K and Others): AAG Abdul Rashid Malik and Advocate Younis.