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CASE TITLE – National Skill Development Corp. V. Best First Step Education Pvt Limited &Ors

CASE NUMBER – O.M.P. (MISC.) (COMM.) 608/2023

DATED ON – 29th February, 2024

QUORUM – HON’BLE MR. JUSTICE PRATEEK JALAN

 

FACTS OF THE CASE

The petitioner has filed this petition under Section 29A of the Arbitration and Conciliation Act, 1996 for extension of the mandate of the Arbitral Tribunal constituted to adjudicate disputes between the parties under a Loan Agreement dated 19.12.2013. According to the agreement, respondent No. 1 was the significant borrower, respondent Nos. 2 through 5 were guarantors, and respondent No. 6 is alleged to have made further undertakings in support of the petitioner. The petitioner was the lender. The parties to the arbitration procedures were the petitioner and respondent Nos. 1 through 6. Under the Indian Council of Arbitration (ICA) Rules, the arbitration was started. The petitioner filed a request for arbitration on March 21, 2022, and the respondents filed a counterstatement on April 8, 2022, after receiving the petitioner’s statement of claim on June 13, 2022. On January 27, 2023, an arbitrator was appointed, and on March 10, 2023, Respondent No. 6 was heard ex parte. The attorneys representing Respondent Nos. 1 through 5 withdrew on April 4, 2023, and no replacement attorneys showed up for them. The last hearing was place on July 14, 2023. On 16.11.2023, the petitioner filed a Section 29A petition, believing that the arbitrator’s authority would expire one year after the pleadings on 04.08. 2022. The arbitrator published the award on November 12, 2023, and the petitioner got it on December 20, 2023, despite the notification being sent on November 24, 2023.

 

ISSUES

Whether the mandate of the Tribunal can be extended, even after the award has been made?

 

COURT ANALYSIS AND JUDGEMENT

In the present case, the court learned that the petition was filed prior to the award, although after the mandate of the learned Arbitrator had already expired and that the factual petition is thus closer to the facts of the case in Harkirat Singh Sodh.

“If an award is delivered while the petition is pending and the petition was filed before the award was made, the case would still be maintainable. On the other hand, a petition that is submitted after the award is made and the setting aside process has begun cannot be maintained”

This distinction is also justified in principle, as a party cannot decide whether to request an extension of the mandate after learning of its outcome in the arbitration proceedings and being confronted with an award challenge based on this basis. The court determined that the petition should be granted after considering the case’s facts. Therefore, the arbitrator’s mandate, which was supposed to end on April 8, 2022, the day the pleadings concluded, is legally extended until November 12, 2023, the date the award was made. This ruling upholds the arbitrator’s decisions and the 11.12.2023 award. With this extension, the petition is therefore ended, and the issue is resolved as a result.

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Judgement Reviewed by – Gnaneswarran Beemarao

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