By Shaan Katari Libby
The primary purpose of arbitration is to provide a private, neutral, and efficient alternative to traditional court litigation for resolving disputes, particularly in commercial, international, and employment contexts. Arbitration aims to deliver finality with a legally binding, and enforceable decision while offering flexibility (as to arbitrator, process and venue), confidentiality (unlike open court), and technical expertise where appropriate.
The key advantages of arbitration are meant to include speed and efficiency, industry knowledge, confidentiality in a closed room setting, finality with legal sanctity, flexibility in terms of manner of proceedings, and the ability to continue business relationships after an arbitration is complete. Arbitration is commonly used to settle disputes without the high costs and public exposure of formal legal proceedings.
However, while the intentions are noble, arbitrations do sometimes extend longer than they should. A recent Supreme Court case dealt with this issue leaving no doubt that arbitrators have a duty to complete their mandate in a timely manner of 12 months or else must ensure they file for an extension of six months with an explanation as to why. Any further extensions may be sought but these are at the discretion of the Court and the reasons for delays need to be strong ones.
The case was that of Rohan Builders (India) Pvt Ltd vs Berger Paints India Ltd Supreme Court 2024, and the issue was conflicting decisions of High Courts as to when a party can file an application under Section 29A(5) of the Arbitration and Conciliation Act, 1996. Under Section 29A, an arbitral award must normally be made within 12 months from the completion of pleadings, which can be extended by consent of the parties by another six months. If the award is not made within this period, the arbitrator’s mandate is said to terminate, unless the court extends the time “either prior to or after the expiry of the period so specified”.
The Supreme Court allowed the appeals, held that while an application under Section 29A(5) is maintainable after the expiry of the arbitral tribunal’s mandate, this is subject to sufficient cause and appropriate judicial scrutiny, and directed that these issues be considered on merits in the respective cases.
The Supreme Court dealt with multiple connected civil appeals concerning when a party can apply for an extension of time under Section 29A of the Arbitration and Conciliation Act, 1996, for making an arbitral award. At issue was whether an application for extension of time under Section 29A(5) can be filed after the statutory time period for the arbitral award has expired—either the original 12-month mandate or the further six-month extension agreed by the parties.
The Court noted that several High Courts had held that such an extension application must be filed before the expiry of the arbitral tribunal’s mandate, while other High Courts had taken the opposite view. After examining the statutory language and purpose of Section 29A, the Court rejected the restrictive interpretation that would bar extension applications filed after the expiry of the arbitral mandate. It explained that the tribunal’s mandate is not absolutely terminated on expiry of time so long as an application for extension is filed, because the statute expressly allows the Court to extend the period “either prior to or after the expiry”. Interpreting “terminate” in a narrow literal sense would produce unjust and impractical results, contrary to the legislative intent behind Section 29A.
The Court held that an application for extension of time under Sections 29A(4) and (5) is maintainable even after the period for making the award has expired, and that the Court must consider whether there is sufficient cause for granting the extension. In doing so, the Court can also impose conditions and costs to prevent abuse of the process. This interpretation gives effect to timely completion of arbitral proceedings while allowing flexibility where good reasons justify an extension.
Certainty over awards has been reiterated in the case of Prakash Atlanta (JV) vs National Highways Authority of India (2026) (Sections 34 & 37, Arbitration and Conciliation Act, 1996). In this 2026 Supreme Court decision, the Court reaffirmed that judicial review cannot function as an appellate re-hearing of an arbitral award. Once an arbitral tribunal’s findings are ‘plausible and reasonable’, Courts should not disturb the award on perceived errors of fact or contract interpretation. The Court emphasised that interference should be confined to circumstances like perversity, patent illegality, or violation of fundamental policy. This reiterates the overarching theme of restraint and respect for the finality of arbitral adjudications.
The Courts have also recently clarified that at the appointment of arbitrators stage the courts are not called upon to decide arbitrability at all…only whether or not there is an arbitration clause. This once again underscores the hands-off approach to interfering with arbitration. Office of Alternative Architecture vs IRCON Infrastructure and Services Limited 2025 (Section 11(6A), Arbitration and Conciliation Act, 1996).
The setting aside of awards by a Court under Section 34, Arbitration and Conciliation Act, 1996, is only possible on specific statutory grounds such as incapacity of a party, invalid arbitration agreement, lack of proper notice, award beyond scope of reference, improper composition of the tribunal, or award in conflict with public policy. A judge hearing a case under this Section has to have applied their mind to the statutory grounds of challenge instead of dismissing it perfunctorily without adequate reasoning. The case of Kalanithi Maran vs Ajay Singh (Special Leave to Appeal (C) No.14936/2024) decided this in the Supreme Court.
Ajay Thomas, (Arbitrator and former Registrar of the London Court of International Arbitration’s India operations) states that this case makes clear that arbitrators ought to aim to complete within the mandated time period, or else apply for an extension in good time since delivering an arbitral award after the deadline potentially leaves parties in a position of uncertainty.
While the perception has been that India is not a popular destination for arbitration due to excessive court interference, the tide seems to be turning as we can see from these recent cases.
Senior Counsel NL Rajah (co-founder of Nani Palkhivala Arbitration Centre) says that ultimately the best way is for parties to have complete autonomy on the arbitration process and timeline and to trust the process.
To conclude, arbitration, a much needed alternative to litigation, has had its teething problems. However, given the recent judgments these are steadily being resolved, whether these are at the appointment stage, the ability to challenge awards, and the timeframes within which awards need to be written. This is good news.
—The writer is a barrister-at-law, Honourable Society of Lincoln’s Inn, UK, and a leading advocate in Chennai. With research inputs by Anushya Saravanan
The post Arbitration: Continually Evolving appeared first on India Legal.