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8 March 2024

Delhi High Court Establishes Timing Protocol for Section 29A Petitions in Arbitration Cases

In a recent judgement, Justice Prateek Jalan of the Delhi High Court elucidated the temporal intricacies surrounding petitions filed under Section 29A of the Arbitration and Conciliation Act, 1996. The Court ruled that such petitions maintain their validity if submitted prior to the delivery of the arbitral award during ongoing proceedings. However, they lose their maintainability if lodged after the award is issued and the process for setting aside has initiated.

The case under scrutiny originated from a Loan Agreement involving multiple parties, where the petitioner served as the lender, with respondent No. 1 as the principal borrower and respondents Nos. 2 to 5 as guarantors. Additionally, respondent No. 6 purportedly provided other undertakings. All parties were engaged in arbitration proceedings facilitated by the Indian Council of Arbitration (ICA) as per the ICA Rules.

Throughout the arbitration process, the petitioner and respondents Nos. 1 to 5 completed the requisite pleadings mandated by the ICA Rules. However, subsequent to this stage, no additional pleadings were filed. An arbitrator was appointed by the ICA, with respondent No. 6 being declared ex-parte. Remarkably, during the final hearing, no legal representation was provided on behalf of respondents Nos. 1 to 5.

The central query before the High Court pertained to the extension of the tribunal's mandate post the delivery of the arbitral award. In its deliberations, the Court referred to prior cases such as Harkirat Singh Sodhi v. Oram Foods (P) Ltd. and Powergrid Corpn. of India Ltd. v. SPML Infra Ltd., which tackled analogous issues regarding award validity and mandate extension.

Upon examination, the High Court noted that although the petition under Section 29A was initiated prior to the award's delivery, it was filed subsequent to the expiration of the arbitrator's mandate. The Court underscored the critical principle that parties cannot selectively opt for or against seeking a mandate extension after gaining insight into their standing in the arbitration proceedings. Drawing from its precedent in ATC Telecom Infrastructure (P) Ltd. v. BSNL, the Court reiterated the viability of Section 29A petitions even post the mandate's lapse.

Consequently, the High Court upheld the petition, elucidating the chronological prerequisites for Section 29A petitions in arbitration matters. The case, styled as "National Skill Development Corporation Vs Best First Step Education Private Limited & Ors.," was adjudicated under Case Number O.M.P.(MISC.)(COMM.) 608/2023. Legal representation for the petitioner was provided by Ms. Mani Gupta, Mr. Pranav Malhotra, and Ms. Vishakha Saluja, while no advocate appeared on behalf of the respondent.

This pronouncement by the Delhi High Court serves to streamline the procedural dynamics of arbitration proceedings and accentuates the importance of adhering to statutory timelines in

seeking legal recourse. By delineating the temporal parameters for Section 29A petitions, the Court provides clarity and guidance to stakeholders navigating arbitration disputes, thereby fostering the efficacy and integrity of India's arbitration regime.

Case Title: National Skill Development Corporation Vs Best First Step Education Private Limited & Ors.

Case Number: O.M.P.(MISC.)(COMM.) 608/2023.

Advocate for the Petitioner: Ms. Mani Gupta, Mr. Pranav Malhotra, Ms. Vishakha Saluja, Advocates.

Advocate for the Respondent: None.