Tenure Of Arbitral Tribunal Can Be Extended After Its Term Expires: Supreme Court

The Supreme Court on Thursday held the fixed tenure of an arbitral tribunal to pass an award can be extended even after the expiry of term, saying the courts must strive to give “meaningful life” to a law to “avoid cadaveric consequences” leading to “unworkable scenarios”.

The top court was dealing with conflicting judgements on the issue by several high courts.

Few high courts, including the Calcutta High Court, while interpreting the provisions of the Arbitration and Conciliation Act, 1996, had held that an application for extension of time can only be entertained if it is filed before expiry of the tenure or mandate of the arbitral tribunal.

The Calcutta High Court had held that once the mandate of the arbitral tribunal is terminated by “efflux of time of twelve months, or when so consented to by the parties after a further six-month extension” the power of the court to extend time cannot be invoked.

However, the high courts of Delhi, Jammu and Kashmir, Bombay and Madras took a contrary view and held that an application for extension of time limit for arbitral award can be filed by a party even after the expiry of the term of twelve months or the extended period of six months.

A bench comprising Justices Sanjiv Khanna and R Mahadevan settled the legal position and held that the plea for extension of time for an arbitral tribunal can be made even after the expiry of its 12 month or 18 month tenure.

“We hold that an application for extension of the time period for passing an arbitral award under Section 29A(4) … is maintainable even after the expiry of the twelve-month or the extended six-month period, as the case may be,” it said.

The court, while adjudicating extension applications, will be guided by the principle of sufficient cause, said Justice Khanna, writing the judgement for the bench.

Dealing with the legal provisions, the verdict said, “While interpreting a statute, we must strive to give meaningful life to an enactment or rule and avoid cadaveric consequences that result in unworkable or impracticable scenarios. An interpretation which produces an unreasonable result is not to be imputed to a statute if there is some other equally possible construction which is acceptable, practical and pragmatic.” The judgement came on a batch of pleas, including the petition of Rohan Builders Private Ltd.