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M/S Ajay Protech Pvt. Ltd. vs General Manager & Anr.

Not available · 2024 INSC 889Decided 22 Nov 2024
Not available
Justice Pamidighantam Sri Narasimha · Justice Sandeep Mehta

Background

After a works contract dispute went to arbitration, the arbitral tribunal's 12-month statutory deadline (extendable by 6 months by consent) to issue its award was approaching expiry. The appellant applied to the High Court under Section 29A(4) of the Arbitration and Conciliation Act for a further extension of time, citing delays partly caused by the COVID-19 pandemic period, but the High Court declined to grant the extension.

Decision Breakdown

The Supreme Court held that the text of Section 29A clearly gives courts the power and jurisdiction to extend an arbitral tribunal's time to make an award where there is "sufficient cause." It explained that "sufficient cause" should be interpreted in light of the underlying purpose of arbitration, effective and efficient dispute resolution, rather than narrowly, and noted the Court's own prior order excluding the pandemic period from limitation calculations was relevant here. Finding sufficient cause given the pandemic-related delay and the parties' own agreement to seek an extension, the Court allowed the appeal, set aside the High Court's order, and extended the time for the tribunal to deliver its award until 31 December 2024.

Lesson Learnt

Courts have real discretion under Section 29A of the Arbitration Act to extend the time limit for an arbitral award when genuine cause, such as pandemic-related delay, is shown, since the law prioritises actually resolving the dispute over rigid procedural deadlines.

Official source (sci.gov.in)View Judgment (PDF)

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