Summary
In an international commercial arbitration between Tata Sons and a Siva group company and its foreign promoter, a sole arbitrator appointed by the Supreme Court entered on the reference in 2018. The agreed extended period ran out in August 2019, during an IBC moratorium against the company. Tata Sons sought a declaration that the proceedings could continue under the amended Section 29A, or alternatively an extension. The Supreme Court held that after the 2019 amendment the mandatory twelve-month limit in Section 29A(1) applies only to domestic arbitrations. In international commercial arbitrations the award need only be made as expeditiously as possible, with an endeavour to finish within twelve months of pleadings. The amendment is remedial, confers no rights or liabilities, and applies to proceedings pending on 30.08.2019. Further extension is therefore for the arbitrator.
Issues
- Whether the twelve-month time limit in Section 29A(1) of the Arbitration and Conciliation Act, 1996, as amended in 2019, applies to international commercial arbitrations, and whether the amendment applies to arbitrations pending on 30.08.2019.
Provisions considered
- Section 29A (as substituted by Act 33 of 2019), Arbitration and Conciliation Act, 1996The words 'in matters other than international commercial arbitration' and the proviso requiring an endeavour to finish within twelve months show the limit is mandatory only for domestic arbitrations and directory for international ones. (¶¶ 24, 25, 26)
- Section 26, Arbitration and Conciliation (Amendment) Act, 2015Unlike the 2015 Act, which made the original Section 29A prospective, the 2019 Act contains no equivalent provision, and its remedial amendment applies to pending arbitrations. (¶¶ 31, 32, 33, 34)
Held
- After the 2019 amendment the twelve-month limit in Section 29A(1) applies only to domestic arbitrations; in an international commercial arbitration the tribunal need only endeavour to make the award within twelve months of completion of pleadings, consistent with the Srikrishna Committee's recommendation to leave case management to arbitral tribunals and institutions. (¶¶ 25, 26, 27, 28, 29)
- Procedural laws are generally retrospective unless they impose new obligations or create rights or liabilities; the amended Section 29A(1) is remedial, removes a mandatory limit without conferring rights or liabilities, and applies to all arbitral proceedings pending on 30.08.2019 (Shapoorji Pallonji and ONGC Petro Additions endorsed). (¶¶ 33, 34, 35, 36)
- The sole arbitrator may decide on any further extension of time and issue procedural directions while endeavouring to conclude the arbitration expeditiously. (¶ 37)
Result
Miscellaneous Application No. 2680 of 2019 in Arbitration Case (Civil) No. 38 of 2017 and the connected interlocutory application allowed; the arbitral proceedings may continue, with any further extension of time left to the sole arbitrator.