SUPREME COURT’S READING OF SECTION 29A AND THE EMERGING UNCERTAINTY IN CHALLENGES TO ARBITRAL AWARDS:

The Supreme Court has recently introduced a significant and controversial shift in its interpretation of Section 29A(5) of the Arbitration and Conciliation Act, 1996, by permitting post-award extensions of an arbitral tribunal’s mandate, thereby rendering awards enforceable even when they were delivered beyond the statutory time limit. In C. Velusamy v. K. Indhera (2026 LiveLaw (SC) 105), a two-judge Bench held that an application seeking extension of an arbitrator’s mandate under Section 29A(5) remains maintainable even after an arbitral award has been passed beyond the prescribed period, and that such an extension may operate retrospectively to validate the award.

This ruling marks a paradigm shift in India’s arbitration framework. While it reflects the Court’s intention to prevent technical lapses from overriding substantive justice, it simultaneously raises concerns about the erosion of procedural discipline and certainty that Section 29A was introduced to ensure. The provision, inserted through the 2015 Amendment, was designed to curb delays in arbitral proceedings by imposing a strict timeline. It mandates that an arbitral award be made within twelve months from the date the tribunal enters upon reference, extendable by a further six months with the consent of the parties. Upon failure to render an award within this maximum period of eighteen months, the tribunal’s mandate automatically terminates under Section 29A(4), unless extended by a competent court under Section 29A(5).

The controversy surrounding Velusamy stems from the Court’s reliance on its earlier decision in Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd. (2024 LiveLaw (SC) 693). In Rohan Builders, the Court dealt with a pre-award situation where the tribunal’s mandate had technically expired, but no award had yet been passed. The Court interpreted the term “termination” in Section 29A(4) to mean that the mandate could still be revived by a court, allowing the tribunal to proceed and deliver an award even after the statutory timeline had lapsed.

In contrast, Velusamy involved a post-award scenario, where the tribunal had already delivered its award after its mandate had ceased. The core issue was whether an arbitral tribunal lacking a valid mandate could lawfully pass an award. The Court answered this in the affirmative, holding that the absence of an express prohibition in Section 29A against post-award extensions allowed courts to retrospectively validate such awards. However, Section 29A appears to contemplate extensions only in cases where an award has not yet been made and time is sought to enable the tribunal to render one. It does not expressly address situations where an award already exists but was rendered without authority.

Notably, unlike the Arbitration Act, 1940, which explicitly empowered courts to extend time even after an award was made, the 1996 Act contains no such curative provision. This legislative omission suggests a conscious departure from the earlier regime. By permitting post-award extensions without explicit statutory backing, the judgment introduces uncertainty into the post-award landscape.

The Court characterized awards passed after expiry of the tribunal’s mandate as not void but unenforceable until validated by a judicial extension. It further indicated that such awards need not necessarily be challenged under Section 34. This reasoning has generated procedural ambiguity, particularly regarding the timing and availability of remedies. Section 34 provides the sole statutory mechanism to challenge an arbitral award and is governed by strict limitation periods. If an award is unenforceable and legally uncertain until the tribunal’s mandate is extended, parties are left unclear whether they should challenge it immediately or await judicial validation.

By leaving these questions unanswered, the judgment risks complicating post-award remedies and undermining the certainty that arbitration seeks to provide. Greater clarity on the interplay between Sections 29A, 34, and 36 would have strengthened the ruling and reduced future litigation. The views expressed are personal.