Time Limits for the Award, and the Fast Track Procedure

The rest of section 29A

29A(2), the carrot: if the award is made within six months from the date the tribunal enters upon the reference, the tribunal is entitled to such additional fees as the parties may agree.

Note that sub-section (2) still runs from entering upon the reference, while sub-section (1) now runs from completion of pleadings. Two different starting points in the same section; do not merge them.

29A(3), extension by consent: the parties may, by consent, extend the period for a further period not exceeding six months.

29A(4), the sanction: if the award is not made within the period in sub-section (1) or the extended period under sub-section (3), the mandate of the arbitrator or arbitrators shall terminate unless the Court has, either prior to or after the expiry of the period, extended it.

That is a severe consequence: the tribunal simply ceases to have authority. Note the words "either prior to or after the expiry", which allow the court to revive a mandate that has already lapsed.

Three provisos to sub-section (4):

• while extending, if the Court finds that the proceedings have been delayed for reasons attributable to the arbitral tribunal, it may order reduction of the fees of the arbitrators by not exceeding five per cent for each month of such delay;
• where an application under sub-section (5) is pending, the mandate of the arbitrator shall continue till the disposal of that application; and
• the arbitrator shall be given an opportunity of being heard before the fees is reduced.

The second and third provisos were added by the 2019 amendment and both matter. The second cures a real problem: before it, a mandate could expire while the extension application sat in a queue. The third is elementary fairness to the arbitrator.

29A(5): an extension 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 the Court may impose.

29A(6): while extending, it is open to the Court to substitute one or all of the arbitrators, and where it does, the proceedings continue from the stage already reached and on the basis of the evidence and material already on record, and the new arbitrators are deemed to have received that evidence and material.

A practical and slightly ruthless provision: the parties do not start again, and the substituted arbitrator inherits the record rather than rehearing it. Contrast section 15(3), where a substitute tribunal may repeat hearings at its discretion.

29A(7): a tribunal reconstituted under this section is deemed to be in continuation of the previous one.

29A(8): it is open to the Court to impose actual or exemplary costs upon any of the parties.

29A(9): an application under sub-section (5) shall be disposed of as expeditiously as possible, with an endeavour to dispose of it within sixty days from service of notice on the opposite party.

Section 29B: the fast track procedure

29B(1): notwithstanding anything in the Act, the parties may, at any stage before or at the time of appointment of the tribunal, agree in writing to have their dispute resolved by the fast track procedure.

29B(2): while so agreeing, they may agree that the tribunal shall consist of a sole arbitrator chosen by the parties.

29B(3): the procedure is:

• (a) the tribunal shall decide the dispute on the basis of written pleadings, documents and submissions filed by the parties without any oral hearing;
• (b) the tribunal may call for further information or clarification;
• (c) an oral hearing may be held only if all the parties make a request, or if the tribunal considers it necessary to clarify certain issues;
• (d) if an oral hearing is held, the tribunal may dispense with technical formalities and adopt such procedure as it deems appropriate for expeditious disposal.

29B(4): the award shall be made within six months from the date the arbitral tribunal enters upon the reference.

29B(5): if it is not, sub-sections (3) to (9) of section 29A apply.

29B(6): the fees payable to the arbitrator and the manner of payment shall be as agreed between the arbitrator and the parties.

Compare section 29B(3)(c) with the first proviso to section 24(1). In an ordinary arbitration one party can insist on an oral hearing; in a fast track arbitration all the parties must request it, or the tribunal must think it necessary. That is the trade-off the parties accept when they choose the procedure.

Note also the starting point: section 29B(4) runs from entering upon the reference, not from completion of pleadings.

The three periods, side by side

A worked example

A domestic arbitration. All three arbitrators receive written notice of appointment on 1 February. Pleadings close on 15 June. The tribunal is still hearing evidence the following September.

When must the award be made? Within twelve months of 15 June, the date of completion of pleadings, under section 29A(1) as substituted in 2019. So by 15 June the following year.

Were the pleadings in time? Section 23(4) required them to be completed within six months of 1 February, that is by 1 August. They closed on 15 June, so yes.

Could the tribunal have earned more? Under section 29A(2), if the award had been made within six months of the tribunal entering upon the reference, it would have been entitled to such additional fees as the parties agreed.

The twelve months is running out and the parties want more time. Under section 29A(3) they may extend by consent by a further period not exceeding six months.

That is not enough either. Now only the Court can extend, under section 29A(4) and (5), on the application of any party, for sufficient cause and on such terms as it imposes. It may extend before or after expiry.

The delay was the tribunal's fault. Under the first proviso to section 29A(4), the Court may reduce the arbitrators' fees by up to five per cent for each month of delay, after giving the arbitrator an opportunity of being heard.

Nobody applies and the period expires. The mandate terminates under section 29A(4). If an application under sub-section (5) had been pending, the second proviso would have kept the mandate alive until it was disposed of.

The Court extends but replaces the presiding arbitrator. Section 29A(6) allows it, and the proceedings continue from the stage already reached on the existing evidence and material, which the new arbitrator is deemed to have received.

What beginners get wrong

The twelve months no longer runs from entering upon the reference. Since 2019 it runs from completion of pleadings, except in Jammu and Kashmir and Ladakh.

The mandate for twelve months does not apply to international commercial arbitration, where the proviso makes it an endeavour.

Section 29A(2) and section 29B(4) do run from entering upon the reference, so the section contains two different starting points.

Only the parties can grant the first six month extension, by consent under section 29A(3); after that only the Court.

Fast track needs agreement in writing, at or before the appointment of the tribunal, and it removes a single party's right to insist on an oral hearing.

Quick revision

• 29A(1): domestic award within twelve months of completion of pleadings under section 23(4). Proviso: international commercial arbitration, twelve months as an endeavour.
• 29A(2): additional fees if the award is made within six months of entering upon the reference.
• 29A(3): parties may extend by consent by up to six months.
• 29A(4): otherwise the mandate terminates unless the Court extends, before or after expiry. Provisos: fee reduction up to five per cent per month of delay attributable to the tribunal; mandate continues while a sub-section (5) application is pending; arbitrator to be heard before fees are reduced.
• 29A(5) to (9): extension only for sufficient cause; the Court may substitute arbitrators and the proceedings continue on the existing record; the reconstituted tribunal is a continuation; actual or exemplary costs may be imposed; endeavour to decide the application within sixty days.
• 29B: written agreement before or at appointment; may be a sole arbitrator; decided on documents without oral hearing; oral hearing only if all parties request or the tribunal considers it necessary; award within six months of entering upon the reference; then section 29A(3) to (9) apply; fees as agreed.

Test yourself

1. From what date does the twelve month period run in a domestic arbitration? From the date of completion of pleadings under section 23(4), following the substitution of section 29A(1) by the 2019 amendment. It previously ran from the date the tribunal entered upon the reference, and it still does under the Jammu and Kashmir and Ladakh State amendment.

2. Does the twelve month limit apply to an international commercial arbitration? Not as a mandate. The proviso to section 29A(1) provides that such an award may be made as expeditiously as possible and that an endeavour may be made to dispose of the matter within twelve months of completion of pleadings.

3. What happens if the award is not made in time and nobody has applied for an extension? The mandate of the arbitrator or arbitrators terminates under section 29A(4). The Court may extend the period either before or after its expiry, and if an application under sub-section (5) is pending the mandate continues until it is disposed of.

4. Can a court punish a tribunal for delay? It may reduce the arbitrators' fees by not exceeding five per cent for each month of delay, where it finds the proceedings were delayed for reasons attributable to the tribunal, and only after giving the arbitrator an opportunity of being heard.

5. In a fast track arbitration, can one party insist on an oral hearing? No. Under section 29B(3)(c) an oral hearing may be held only if all the parties request it, or if the tribunal considers it necessary to clarify certain issues. That is narrower than the first proviso to section 24(1), under which a single party's request suffices in an ordinary arbitration.