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In a recent and significant ruling, a two-judge bench of the Supreme Court ("Court"), Justice P.S. Narasimha and Justice A.S. Chandurkar, has clarified long-standing ambiguity surrounding the jurisdiction of courts to extend the mandate of an arbitral tribunal under Section 29A of the Arbitration and Conciliation Act, 1996 ("Act"). The Court, vide its judgment dated February 3, 2026, in C. Velusamy v. K. Indhera (Civil Appeal Number 696 of 2026), has, inter alia, held that an application under Section 29A for extension of mandate is maintainable even after expiry of time under Sections 29A(1) and (3) of the Act and even after an award passed during that time. It was observed that there is no statutorily prescribed time limit for the courts to exercise power under Section29A(4) of the Act to extend the arbitral mandate, except for its own discretion.
Brief Background
In the instant case, the disputes between the parties were referred for arbitration. The proceedings were conducted; however, the arbitrator passed an award three months after the expiry of the arbitral mandate. Aggrieved by the award, K. Indhera ("Respondent") filed a petition under Section 34 of the Act before the High Court of Madras ("High Court") seeking the setting aside of the award on the ground that award was made after termination of proceedings and expiry of the mandate. C. Velusamy ("Appellant") also preferred an application under Section 29A seeking an extension of the mandate.
The High Court, vide its order dated January 24, 2025, held that an award passed subsequent to the expiry of the arbitral mandate was a nullity and dismissed the application for extension of the mandate as not maintainable. Later, the High Court allowed the Section 34 petition filed by the Respondent, relying on its order dated January 24, 2025. Aggrieved by the High Court's decision, the Appellant preferred an appeal before the Supreme Court.
Issues before the Court
The core issue raised before the Court was whether a court can entertain an application under Section 29A (5) of the Arbitration and Conciliation Act, 1996, to extend the mandate of the arbitrator(s) for making the award even after an 'award' is rendered, though after the expiry of the statutory limit of eighteen-month period.
Decision of the Court
In answering the issue at hand, the Court considered the legislative background of Section 29A, including the 176th Report of the Law Commission of India ("Report"), the Statement of Objects and Reasons for the 2015 amendment to the Act, relevant international and domestic literature, and the observations of the coordinate bench in Rohan Builders (India) (P) Limited vs. Berger Paints (India) Limited (2025 10 SCC 802) ("Rohan Builders").
Upon such consideration, the Court held that the power of the courts under Section 29A(4) to extend the arbitral mandate can be exercised either before or after the expiry of the statutorily prescribed period. This power and jurisdiction of the courts under Section 29A are not impaired by the failure of an arbitrator in rendering award within the mandate period. Thus, an application under Section 29A (5), seeking extension of mandate, is maintainable even after expiry of time and even where an award has been rendered during such period.
In reaching the above conclusion, the Court placed substantial reliance on the Law Commission's Report and the legislative intent underlying the 2015 amendment. It noted that, unlike the Arbitration Act, 1940 – which expressly empowered courts to extend mandate even after expiry of the prescribed time or passing of an award – the Act of 1996 originally did not prescribe any timeline for rendering an award. The Law Commission, therefore, proposed the introduction of a structured timeline while emphasising that arbitral proceedings continue until an award is ultimately passed, so that the procedural delays do not result in wastage of time, costs, or evidence already led. The Statement of Objects and Reasons further reflected that the 2015 amendment was introduced to address practical difficulties and to make arbitration more user-friendly, cost-effective and expeditious.
The Court categorically observed that the legislative intent was to ensure culmination of arbitral proceedings in an award, with judicial intervention operating as a facilitative and corrective mechanism to curb delay and not as a means to abort the arbitral process. The scheme of the amended Section 29A – permitting extension before or after expiry of the prescribed time (Section 29A(4)), providing continuation of proceedings while an extension application is pending (proviso to Section 29A(4)), and ensuring uninterrupted continuation of proceedings upon extension (Section 29A(6) & (7)) – makes it clear that Parliament intended to safeguard the conduct and conclusion of arbitral proceedings.
The Court also placed reliance on its earlier observations in Rohan Builders, wherein the coordinate bench had observed that where an award is pronounced during the pendency of an application for extension, the court must still decide the application under Section 29A(5), and may even, where an award has been pronounced, invoke sub-sections (6) to (8), or the first and third proviso to Section 29A (4).
In light of these observations, the Court held that the provisions of the Act, particularly Section 29A, must not be interpreted to infer a threshold bar for an application for extension under Section 29A(5), even when an award is passed after the expiry of the mandate. Section 29A, in terms, enables the court to adopt distinct measures to ensure dynamic and efficient conduct of arbitral proceedings with expedition. Thus, an application for extension of mandate is maintainable even after expiry of the mandate and even after an award rendered during that time. Further, if the extension is granted in such cases, the arbitral tribunal would proceed from the stage at which the mandate had expired and conclude within the time granted by the court.
Accordingly, the Court allowed the appeal, set aside the judgment of the High Court dated January 24, 2025, and restored the Appellant's application for extension of the mandate, directing the High Court to decide the same in accordance with the principles laid down in the present case.
Please find attached a copy of the judgement, here.
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