Legal provisions involved: Sections 14, 15, 29A(1), 29A(4) and 29A(6) of the Arbitration and Conciliation Act, 1996

Judgement by: Supreme Court

Bench/Judge:  Justice Sanjay Kumar and Justice Alok Aradhe

Facts

A dispute between partners of a firm was referred to arbitration under a partnership deed. In March 2020, the Delhi High Court appointed a sole arbitrator. Although hearings and directions took place, no arbitral award was passed within the time limit fixed under the law. The parties did not apply for an extension before the expiry of the prescribed period.

Key legal provisions

Sections 14, 15, 29A(1), 29A(4) and 29A(6) of the Arbitration and Conciliation Act, 1996

Issues raised

Whether the High Court could extend the mandate of the same arbitrator after the statutory time period had already expired?

Arguments of the case

The appellants argued that the arbitrator had no authority to continue once the time limit ended. The respondent supported the High Court’s decision to extend the mandate?

Judgement

The Supreme Court held that after expiry of the statutory period, the arbitrator becomes functus officio (having performed his office) and cannot continue. The High Court’s extension order was set aside, a substitute arbitrator was appointed, and the arbitration was directed to finish within six months.

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