In a recent ruling, the High Court of Delhi held that the 2019 amendment to Section 29A of the Arbitration and Conciliation Act, 1996 is procedural in nature and applies to all pending arbitrations. The court extended the time period for rendering an arbitration award, taking into account exceptional circumstances, including the death of two arbitrators, the recusal of the third arbitrator, and the delay caused by the Covid-19 pandemic.

The case, titled Harkirat Singh Sodhi v. Oram Foods Pvt Ltd, involved a dispute between the parties arising from a lease agreement. The petitioner leased out premises to the respondent, but the respondent defaulted on rental payments, leading to termination notices and subsequent arbitration proceedings. Unfortunately, the arbitrators appointed by the Delhi International Arbitration Centre (DIAC) faced untimely deaths, causing significant delays in the case.

Under the amended Section 29A of the Act, the time limit for rendering an award is calculated from the completion of proceedings, rather than from the date when the arbitrator enters the reference, as stated in the unamended section. Additionally, the Supreme Court excluded the period from March 15, 2020, to February 28, 2022, from the limitation period.

The petitioner sought an extension of time for rendering the award, as the pleadings were completed on August 29, 2019, and the Covid-19 pandemic and exceptional circumstances caused further delays. The respondent, on the other hand, argued that the amendment should not apply retrospectively and that the mandate of the arbitrator had already terminated due to the failure to meet the original 12-month deadline.

The court, after considering the facts and legal arguments, determined that the 2019 amendment was indeed retrospective and applied to all pending arbitrations. It noted that the arbitrator had delivered the award to the DIAC on August 30, 2022, with a marginal delay of 14 days. Given the exceptional circumstances and the petitioner's timely filing of the extension request, the court granted the extension, allowing the award rendered on August 30, 2022, to be valid.

This ruling highlights the court's interpretation of the procedural nature of the 2019 amendment and its willingness to consider exceptional circumstances when determining time limits for arbitration awards. The case serves as a reminder of the importance of flexibility and fairness in the arbitration process, particularly in complex cases affected by unforeseen events.

Case Details:    Harkirat Singh Sodhi v. Oram Foods Pvt Ltd
Case Number: OMP(MISC)(COMM) 186 of 2021

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