Court Can Extend Time For Passing Arbitral Award Even After Award Is Passed: Kerala HC

The Kerala High Court recently held that if a Court is convinced that there is sufficient cause, it will be empowered to extend the time for passing the arbitral award even in a case where the award has already been passed.

Bench comprising Justice Anu Sivaraman heard a matter wherein the central question was whether an application for extension of time for passing an arbitral award can be considered by this Court after the award had been passed.

The award in the instant case was passed on May 6, 2023, without any extension of the mandate. One of the parties to the arbitration, that is the 2nd respondent satisfied the award by paying the amount due. However, the 1st respondent filed a petition under Section 34 of the Act before the Commercial Court contending that the award was one passed after termination of the mandate of the arbitral tribunal and is, therefore, non est in law. Thereafter, these IAs have been filed stating that the arbitral tribunal had passed the award without noticing that the time stood expired on March 1, 2023 and therefore the applications are liable to be considered by this Court.

It was submitted on behalf of the respondent that It is submitted that after the mandate of the Arbitrator has seized, the Arbitrator or the Arbitral Tribunal could not have passed an award without the time provided having been extended as specifically provided under Section 29A.  It is submitted that there can be no ex post facto ratification of an award passed beyond the time that too, after it has been subjected to a challenge under Section 34 on the ground that it is passed after the mandate has expired.

The Court observed that, "A reading of Section 29A(3) and (4) of the Act would lead this Court to the inescapable conclusion that what is intended is that there can be an application for extension either before or after the time provided for termination of the proceedings has elapsed. It is to be noticed that the application is provided to this Court and it is only in situation where this Court is convinced that there is real and proper reason to do so that the time is liable to be extended."

The Court said that it was pertinent to note that if an application was made under Section 29A (5) of the Act for extension of time either before or after the expiry of the mandate then the 2nd proviso to Section 29A(4) of the Act provides that the mandate of the arbitrator shall continue till the disposal of the said application.

"A reading of Section 32 would also make it clear that the termination of the mandate of the arbitrator  and the termination of the proceedings on a final arbitral award being passed are not absolute and are also subject to Section 33  and Sub-section 4 of Section 44 of the Act. Therefore, it is clear that the termination of the mandate of the Arbitrator under Section 32 of the Act is not an absolute termination so as to denude this Court of any further power to consider any application. The said termination can only be read to be subject to the powers of extension of the mandate as provided under Section 29A(3) and (4) of the Act," the Court added.

With the above mentioned observations, the Court extended the time for passing of the arbitral award.