Search this article on Google: Understanding the Time Limit for Arbitral Award as per Section 29A of The Arbitration and Conciliation Act
In this article, legal experts at SimranLaw dissect the Time Limit for Arbitral Award as per Section 29A of The Arbitration and Conciliation Act, 1996. The aim is to provide readers with a deeper understanding of this complex legal issue.
What is Section 29A of The Arbitration and Conciliation Act, 1996?
Section 29A of the Indian Arbitration and Conciliation Act, 1996 (the “Act”) provides the time limit within which an arbitral tribunal must render its final award. This law aims to ensure swift resolution of disputes and reduce delays in the arbitration process in India.
Understanding Section 29A
- Limited Time: As per Section 29A, the arbitral tribunal is required to make an award within 12 months from the date the tribunal is entered into reference.
- Extension: Parties can, by consent, extend the period up to six months. Beyond that period, any extension can be granted only by the court, on sufficient cause.
- Penalty: If an arbitral award is not rendered within the specified time limit, the arbitrators’ fees are reduced by ten percent for each month of delay beyond the twelve month period.
Interpreting Section 29A With Case Laws
1. BCCI VS Kochi Cricket Pvt Ltd Case (2018)
In this landmark judgment, the Supreme Court held that Section 29A is prospective, applicable only to arbitration proceedings which commenced on or after October 23, 2015.
2. P.R Shah Shares & Stock Brokers Pvt Ltd v B.H.H Securities Pvt Ltd and Ors (2012)
This judgement clarified that the term “court” referred in Section 29A also includes arbitral tribunals.
3. Quippo Construction Equipment Ltd v Janardan Nirman Pvt Ltd (2019)
Criticism and Issues with Section 29A
- Delay in Proceedings: The mandatory requirement to seek court’s intervention for extending the award-making period can cause serious delays, defeating the very purpose of the law.
- Denial of Natural Justice: The act of an arbitrator hurrying to make an award to avoid penalties can lead to an improper analysis of the disputes and denial of justice.
- Unequal Treatment: The exclusion of international arbitrations from the application of Section 29A places domestic arbitral proceedings at a disadvantage, making it less appealing.
While Section 29A aims to expedite the arbitration process in India, its implementation has raised several issues and challenges. Arbitration practitioners and legal experts, including those at SimranLaw, hope for a more balanced approach in the future. Understanding such intricacies of the law helps in better navigation through the legal proceedings.