Ever since the enactment of Arbitration and Conciliation Act 1996 (“Act”), Indian Legislature has been showing it’s intent to keep pace with the growing popularity of Arbitration as preferred mode of dispute resolution in commercial matters. The amendment of 2019, received the assent of the President of India on 9th August, 2019.
Timeline for making the award – Section 29A and Section 23
- The Amendment takes the international commercial arbitrations out of the time limitations provided under Section 29A(1).
- The Amended Act introduces Section 23 (4), which provides that statement of claim and Statement of defense shall be completed within a period of six months from the date the arbitrator received notice of their appointment.
- Time period of one year for making of the award as provided under Section 29 A(1) shall begin from the date of completion of pleadings (statement of claim and statement of defense) only. Therefore, six month is the maximum time permissible for completion of pleading and the time period of one year for making of award shall commence irrespective of non-completion of pleadings within the said period. Conversely, if the pleading are completed before six months, the time period of one year for making of award shall commence forthwith the completion of the pleading.
- Particularly, the time spent in filing of rejoinder [in cases without any counter claims) or rejoinder to counter claim (in cases with counter claims) will not be considered as time spent in completion of pleading under Section 23 (4)].
- The amendment also provides that during the period an application for enlargement of time for making of award is pending before the court under Section 29 (5), the mandate of the arbitrator shall continue till disposal of the application. This amendment will help the Tribunal to continue the proceedings without waiting for court’s decision on enlargement of time for making of award under Section 29(5).
- 2015 amendment shall only apply to arbitration proceedings commenced on or after 23rd October, 2015 and to the court proceedings arising out of or in relation to the arbitration proceedings commenced on or after 23rd October, 2015.
The 2019 amendment acts clearly aims at removing the difficulties which were being faced during the conduct of Arbitration proceedings and the court proceedings arising therefrom. With separate time frame for completion of pleading, arbitral tribunal will have full period of one year for conducting the trail and passing the award.
The Hon’ble Supreme Court on 6th May, 2020 passed the following orders in Suo Moto Writ (Civil) No. 3 of 2020:
- All periods of limitation prescribed under the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) and under section 138 of the Negotiable Instruments Act 1881 (“Negotiable Instruments Act”) shall be extended with effect from 15th March, 2020 till further orders to be passed by the Supreme Court.
- In case the limitation has expired after 15th March, 2020, then the period from 15th March, 2020 till the date on which the lockdown is lifted in that jurisdictional area where the dispute lies or where the cause of action arises, shall be extended for a period of 15 days after the lifting of lockdown.
The above order has been passed:
- taking into consideration the effect of the COVID 19;
- to obviate the resultant difficulties being faced by lawyers and litigants; and
- to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunal across the country including this Court.