Arbitration and Conciliation Act Section 29A — Time limit for arbitral award
CHAPTER VI — Making of arbitral award and termination of proceedings
Civil
Summary
Sub-section (1) sets the general time limit for making an arbitral award. For disputes that are not international commercial arbitrations, the award must be made within twelve months from the date the pleadings are completed under section 23(4). For international commercial arbitrations, the award should be made as quickly as possible, and an effort should be made to finish the matter within twelve months from the same date of completion of pleadings.
Sub-section (2) provides an incentive for speed. If the award is made within six months from the date the arbitral tribunal starts its work, the tribunal is entitled to receive additional fees, but only in the amount that the parties agree to.
Sub-section (3) allows the parties to extend the time limit for making the award by mutual consent. This extension can be for a further period of up to six months beyond the original twelve-month period.
Sub-section (4) states what happens if the award is not made within the original time limit or the extended period. In that case, the mandate of the arbitrator or arbitrators will terminate, unless the Court has extended the period, either before or after the time limit expires. However, if the Court finds that the delay was caused by the arbitral tribunal itself, it may reduce the arbitrator's fees by up to five percent for each month of delay. The arbitrator must be given an opportunity to be heard before any fee reduction is ordered. Also, if an application for extension under sub-section (5) is pending, the arbitrator's mandate continues until that application is decided.
Sub-section (5) explains that the extension of time mentioned in sub-section (4) can be requested by any party through an application to the Court. The Court may grant the extension only for sufficient cause, and it may impose such terms and conditions as it sees fit.
Sub-section (6) gives the Court the power, while extending the time period, to replace one or all of the arbitrators. If any arbitrator is replaced, the arbitral proceedings continue from the stage already reached, based on the evidence and material already on record. The newly appointed arbitrator or arbitrators are treated as having received that evidence and material.
Sub-section (7) clarifies that when new arbitrators are appointed under this section, the reconstituted arbitral tribunal is considered to be a continuation of the previously appointed tribunal.
Sub-section (8) allows the Court to impose actual or exemplary costs on any party in proceedings under this section.
Sub-section (9) requires the Court to dispose of an application for extension filed under sub-section (5) as quickly as possible. An effort must be made to decide the matter within sixty days from the date notice is served on the opposite party.
Official Text
3 [(1)The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23:
Provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavor may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23.]
(2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.
(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months.
(4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator
(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period:
Provided that while extending the period under this sub-section, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator
(s) by not exceeding five per cent. for each month of such delay. 1[Provided further that where an application under sub-section (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application:
Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced.]
(5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court.
(6) While extending the period referred to in sub-section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator
(s) appointed under this section shall be deemed to have received the said evidence and material.
(7) In the event of arbitrator
(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal.
(8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section.
(9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.