High Court Not Having Original Civil Jurisdiction Cannot Extend Time To Pass Arbitral Award As Per S.29a(4) Arbitration Act

Summary:

[1]In a landmark ruling, the Supreme Court of India determined that High Courts without original civil jurisdiction cannot extend the time frame for issuing arbitral awards under Section 29A(4) of the Arbitration & Conciliation Act, 1996. This decision arose from a case where the Meghalaya High Court had refused to extend the time for an arbitral award, citing its lack of original civil jurisdiction. The Supreme Court clarified that the authority to extend the time limit for arbitral awards lies solely with the principal civil court of original jurisdiction, which can include a High Court only if it has ordinary original civil jurisdiction. The Court emphasized the interpretation of “Court” under Section 2(1)(e) of the Act, reinforcing that only the principal civil court of original jurisdiction in a district, or a High Court with such jurisdiction, is authorized to grant time extensions. The Supreme Court upheld the Meghalaya High Court’s decision, dismissing the Special Leave Petition on the grounds that the appeal lacked merit. This ruling offers important clarification on jurisdictional authority under the Arbitration Act, ensuring that only the designated courts manage such extensions, thereby improving the efficiency of arbitration proceedings in India.

Facts:

The case in question originated from a decision by the Meghalaya High Court, which dismissed a request to extend the deadline for issuing an arbitral award, citing its lack of original civil jurisdiction.

Section 29A, added by the 2015 Amendment to the Arbitration and Conciliation Act, stipulates that an arbitral tribunal has a maximum of 18 months to deliver an award. Sub-section (4) of Section 29A permits this timeframe to be extended by a civil court with original jurisdiction.

Issues:

1. Whether a High Court without original civil jurisdiction has the authority to extend the time limit for passing an arbitral award under Section 29A(4) of the Act.
2. Interpretation of the term “Court” under Section 29A(4) in conjunction with Section 2(1)(e) of the Arbitration Act, which defines the principal civil court of original jurisdiction.

Judgment:

The Supreme Court scrutinized the statutory provisions and the legislative intent behind Section 29A, reaffirming that the authority to extend the time limit for arbitral awards lies with the principal civil court of original jurisdiction. This includes High Courts only if they have ordinary original civil jurisdiction. The Court highlighted that under Section 2(1)(e) of the Act, the term “Court” denotes the principal civil court of original jurisdiction in a district or a High Court with such jurisdiction. Consequently, the Supreme Court upheld the Meghalaya High Court’s decision to deny the application for an extension, as it lacked original civil jurisdiction.

Analysis:

The Supreme Court’s decision highlights the necessity of respecting the jurisdictional limits set by the Arbitration & Conciliation Act. It emphasizes the exclusive role of principal civil courts of original jurisdiction in extending the time limits for arbitral awards, thereby promoting clarity and consistency in arbitration proceedings. As a result, the Special Leave Petition contesting the Meghalaya High Court’s ruling was dismissed. This judgment offers a clear interpretation of Section 29A(4) and confirms the jurisdictional constraints of High Courts without original civil jurisdiction, providing guidance for future arbitration cases in India.

[1] https://webapi.sci.gov.in/supremecourt/2024/19360/19360_2024_7_31_53139_Order_13-May-2024.pdf

BEFORE THE HON’BLE SUPREME COURT OF INDIA

SPECIAL LEAVE TO APPEAL (C) NO. 10544/2024

CHIEF ENGINEER (NH) PWD (ROADS) v. M/S BSC & C AND C JV

ORDER DATED 13TH MAY 2024