Court Permits Six-Month Extension for Arbitral Proceedings Despite Technical Errors
In a significant ruling, the Andhra Pradesh High Court has set aside an order by the Special Court for Trial and Disposal of Commercial Disputes, Vijayawada, which had previously rejected an application for the extension of an arbitral tribunal's mandate. The case involved petitioner Gali Radha Bhagya Lakshmi and respondents Sree Constructions and another, with the focal issue being the extension of the arbitration period under Section 29A of the Arbitration and Conciliation Act, 1996.
The High Court, comprising Justices Mr. Ravi Nath Tilhari and Balaji Medamalli, heard the Civil Revision Petition challenging the Special Court's decision dated 31st July 2025. The petitioner had sought a 12-month extension from September 27, 2023, citing delays due to COVID-19, procedural changes, and previous legal proceedings, which the Special Court had dismissed on technical grounds.
The Special Court had ruled the application infructuous, as the requested extension period had expired before the filing of the application. However, the High Court found this view overly technical and emphasized that courts should consider the stage of arbitral proceedings and reasons for delay, rather than dismiss applications on procedural technicalities.
The High Court cited precedents, including the Supreme Court’s interpretation in Rohan Builders v. Berger Paints India Limited, underscoring that applications for extension can be filed even after the expiry of the original mandate period. It highlighted the importance of a liberal interpretation of 'sufficient cause' to facilitate arbitration completion.
The judgment reiterated that no specific limitation period exists for such applications and that courts must exercise discretion to enable arbitration to conclude effectively. The High Court found that the petitioner’s application was filed within a reasonable period, considering previous legal actions and the prevalent COVID-19 conditions.
Consequently, the High Court allowed the Civil Revision Petition and extended the mandate of the Arbitral Tribunal for an additional six months to complete the proceedings, marking a significant stance on arbitration timelines and judicial discretion.
Bottom line:-
Application for extension of mandate of an Arbitral Tribunal under Section 29A(4) of the Arbitration and Conciliation Act, 1996 can be filed either before or after the expiry of the mandated period, and courts must record sufficient reasons for granting such extension. 'Sufficient cause' should be liberally construed to ensure completion of arbitration proceedings.
Statutory provision(s): Arbitration and Conciliation Act, 1996, Section 29A
Gali Radha Bhagya Lakshmi v. Sree Constructions, (Andhra Pradesh)(DB) : Law Finder Doc id # 2914226
