2025:HHC:21025 Whether reporters of Local Papers may be allowed to see the judgment? Yes IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Arbitration Case No.877 of 2024 Date of decision: 03.07.2025 Prem Laxmi and Company. ...Petitioner. Versus Himachal Pradesh State Electricity Board Ltd. ...Respondents. Coram: Ms. Justice Jyotsna Rewal Dua, Judge. Whether approved for reporting? Yes. For the petitioner : Mr. Hashmit Trivedi and Mr. Neeraj Salodkar, Advocates (through VC) with Mr. Vasu Jal, Mr. Sambhav Bhasin and Ms. Shruti Dubey, Advocates. For the respondents : Ms. Sunita Sharma, Senior Advocate with Mr. Surender Kumar, Advocate. Jyotsna Rewal Dua, Judge Petitioner seeks to extend the mandate of the Arbitral Tribunal. Respondent oppose this prayer. 2. In relation to a dispute between the parties, an arbitral award was passed on 16.05.2013. The objections filed against it by the present petitioner were dismissed on 25.04.2019. The said order was assailed by the petitioner in Arbitration Appeal No. 8 of 2019. The Arbitration Appeal was disposed of on 06.11.2019. The judgment dated 25.04.2019 was set aside. The arbitral award dated 16.05.2013 was also set aside. With the consent of the parties, Sh. Naresh Kumar -2- 2025:HHC:21025 Sood, learned Senior Advocate, H.P. High Court, was appointed as an Arbitrator to adjudicate upon the dispute between the parties within the time frame fixed in the Arbitration and Conciliation Act, 1996 (‘the Act’) and on the basis of the existing material available on record. Neither of the parties was permitted to introduce any fresh pleadings, documents or evidence. The operative portion from the decision rendered on 06.11.2019 in Arbitration Appeal No.8 of 2019 is extracted hereinafter:- “19 As noticed above, even the learned Single Judge below has erred in upholding an award, which was virtually bereft of any reasons for the conclusions drawn by the Arbitrator, therefore, not only the award but even the impugned order passed by the learned Single Judge are liable to be set aside. Ordered accordingly. 22 Accordingly, with the consent of parties, Mr. Naresh Kumar Sood, learned Senior Advocate, H.P. High Court, who is present in the Court, is appointed as an Arbitrator to adjudicate upon the dispute between the parties within the time frame fixed in the Act on the basis of the existing material available on record, meaning thereby, no party shall be permitted to introduce any fresh pleadings, documents or evidence etc. It shall be open for the learned Arbitrator to fix his fee.” Pursuant thereto, Sh. Naresh Kumar Sood, learned Senior Advocate entered upon the reference. The learned Arbitrator passed an order on 01.07.2024, observing therein that his mandate to decide the arbitral proceedings had come to an end; In view of the amendment of Section 29-A(1) of the Act by Act 33 of 2019, -3- 2025:HHC:21025 and in terms of the amended provisions of the Arbitration and Conciliation Act, 1996, the overall maximum time limit for making the award was 24 months, the said period expired on 21.11.2021. Petitioner prays for extending the mandate of learned Arbitrator. 3. Petitioner has placed on record a letter dated 09.03.2020, inter alia, addressed to it by the learned Arbitrator, adjourning the arbitral proceedings after suffering injuries, which restricted his movements. The proceedings were adjourned by eight weeks. The letter also stated that notice of the adjourned date shall follow. It is not in dispute that no further notice from the Arbitrator was received by either of the parties. It is the case set up by the petitioner that, on account of the COVID-19 pandemic in the interregnum, the proceedings could not be conducted. Learned counsel for the petitioner urged that after easing of COVID-19 restrictions in the year 2022, many telephonic conversations were held with the learned Arbitrator for holding the arbitral proceedings; however, date for hearing was not fixed. On 31.05.2024, the petitioner wrote a letter to the learned Arbitrator for fixing the schedule for appearing in the -4- 2025:HHC:21025 arbitral proceedings. Learned Arbitrator on 01.07.2024 declined to grant claimant’s request citing termination of his mandate with efflux of time. 4. Learned counsel on both sides have placed reliance upon decisions rendered in Rohan Builders (India) Private Limited vs. Berger Paints India Limited1 and M/s. Ajay Protech Pvt. Ltd. Vs. General Manager & Anr.2 in support of their respective cases. Learned counsel for the petitioner urges that sufficient grounds have been made out for extending the mandate of the learned Arbitrator, hence, in light of law laid down in the aforesaid decisions, the mandate of learned Arbitrator is required to be extended. Whereas, learned Senior Counsel for the respondent submits that no sufficient cause has been demonstrated by the petitioner for extending the mandate of the learned Arbitrator, hence, this petition is required to be dismissed. 5. Heard learned counsel for the parties and considered the case file. 5(i). In Rohan Builders (India) Private Limited1, the issue for consideration before the Hon’ble Apex Court was as to whether an application for extension of time under 1 2024 SCC OnLine SC 2494 2 2024 SCC OnLine SC 3381 -5- 2025:HHC:21025 Section 29-A of the Arbitration and Conciliation Act, 1996, can be filed after the expiry of the period for making the arbitral award. Hon’ble Apex Court while observing that an interpretation allowing an extension application post the expiry period though would encourage the rogue litigants and render the timeline for making the award inconsequential also held that the power of the Court under Section 29-A(5) to extend the time, is to be exercised in cases where there is sufficient cause for such extension. Extension is not to be granted mechanically on filing of the application. Judicial discretion of the Court in terms of the enactment acts as a deterrent against any party abusing the process of law or espousing a frivolous or vexatious application. The Court can also impose terms & conditions while granting an extension. Delay, even on the part of the Arbitral Tribunal, is not countenanced. Relevant portion from the decision is as under:- “15. Rohan Builders (India) Pvt. Ltd. (supra) highlights that an interpretation allowing an extension application post the expiry period would encourage rogue litigants and render the timeline for making the award inconsequential. However, it is apposite to note that under Section 29A(5), the power of the court to extend the time is to be exercised only in cases where there is sufficient cause for such extension. Such extension is not granted mechanically on filing of the application. The judicial discretion of the court in terms of the enactment acts as a deterrent against any party abusing the process of law or espousing a frivolous or vexatious application. Further, the court can impose -6- 2025:HHC:21025 terms and conditions while granting an extension. Delay, even on the part of the arbitral tribunal, is not countenanced. The first proviso to Section 29A(4) permits a fee reduction of up to five percent for each month of delay attributable to the arbitral tribunal.” M/s Ajay Protech Pvt. Ltd.2, reiterated the law laid down in Rohan Builders (India) Private Limited1. The decision emphasises that application for extension of time can be filed even after the expiry of the period in Section 29(1) and (3). It was further held that even if sub-section (4) of Section 29 provides for the termination of the Tribunal’s mandate on the expiry of the period, it recognizes party autonomy to move an application before the Court for further extension. The termination of mandate under the provision is only conditional on the non-filing of an extension application and cannot be taken to mean that the mandate cannot be extended once it expires. On the question of whether the extension must be granted, relying upon Rohan Builders (India) Private Limited1, it was held that as per Section 29-A(5), the decision to extend the time is an exercise of discretion by the Court and must be done on sufficient cause being shown and on such terms & conditions that the Court deems fit. Relevant portion from the judgment reads as under:- “9. This Court in Rohan Builders (supra) has held that the application for extension of time can be filed even after -7- 2025:HHC:21025 the expiry of the period in sub-sections (1) and (3).5 Even if sub-section (4) provides for the termination of the Tribunal’s mandate on the expiry of the period, it recognises party autonomy to move an application before the Court for further extension. Thus, the termination of mandate under the provision is only conditional on the non-filing of an extension application, and cannot be taken to mean that the mandate cannot be extended once it expires. The relevant portion of the judgment is extracted: “6. Section 29A(4) is the provision which requires interpretation. It states that where the award is not made within the specified period of twelve or eighteen months, the mandate of the arbitral tribunal will terminate. However, this provision does not apply if the court has extended the period, either before or after the expiry of the initial or the extended term. In other words, Section 29A(4) empowers the court to extend the period for making of the arbitral award beyond a period of twelve months or eighteen months, as the case may be. The expression “either prior to or after the expiry of the period so specified” is unambiguous. It can be deduced by the language that the court can extend the time where an application is filed after the expiry of the period under subsection (1) or the extended period in terms of sub- section (3). The court has the power to extend the period for making an award at any time before or after the mandated period.” (emphasis supplied) 10. The wording of Section 29A(4) and the decision in Rohan Builders (supra) clearly answer the first issue in favour of the appellant, i.e., an application for extension can be filed either before or after the termination of the Tribunal’s mandate upon expiry of the statutory and extendable period. 11. Whether extension must be granted. The next question is whether an extension of time should be granted in the present case. As per Section 29A(5), the decision to extend the time is an exercise of discretion by the court and must be done on sufficient cause being shown, and on such terms and conditions that the court deems fit. This Court, in Rohan Builders (supra), has held: “14. In our opinion, a restrictive interpretation would lead to rigour, impediments and complexities. A party would have to rush to the court even when the period of arbitral mandate of twelve months has not expired, notwithstanding the possibility of a consent-based extension of six months under Section 29A(3). Narrow interpretation presents an additional challenge by relegating a faultless party to a fresh reference or appointment of an arbitrator under the A&C Act, 2015, thereby impeding arbitration rather than facilitating it. The legislature vide the 2015 Amendment envisions arbitration as a litigant-centric process by expediting disposal of cases and reducing the cost of litigation. A narrow interpretation will be counterproductive…. -8- 2025:HHC:21025 15. Rohan Builders (India) Pvt. Ltd. (supra) highlights that an interpretation allowing an extension application post the expiry period would encourage rogue litigants and render the timeline for making the award inconsequential. However, it is apposite to note that under Section 29A(5), the power of the court to extend the time is to be exercised only in cases where there is sufficient cause for such extension. Such extension is not granted mechanically on filing of the application. The judicial discretion of the court in terms of the enactment acts as a deterrent against any party abusing the process of law or espousing a frivolous or vexatious application. Further, the court can impose terms and conditions while granting an extension. Delay, even on the part of the arbitral tribunal, is not countenanced. The first proviso to Section 29A(4) permits a fee reduction of up to five percent for each month of delay attributable to the arbitral tribunal.” In following paragraph 16 of the decision, it was held that the meaning of 'sufficient cause' for extending the time to make an award must take colour from the underlying purpose of the arbitration process. The primary objective in rendering an arbitral award is to resolve disputes through agreed dispute resolution mechanism as contracted by the parties. Therefore, 'sufficient cause' should be interpreted in the context of facilitating effective dispute resolution. “16. The meaning of 'sufficient cause' for extending the time to make an award must take colour from the underlying purpose of the arbitration process. The primary objective in rendering an arbitral award is to resolve disputes through the agreed dispute resolution mechanism as contracted by the parties. Therefore, 'sufficient cause' should be interpreted in the context of facilitating effective dispute resolution.” 5(ii). Considering the aforesaid legal position in the backdrop of the instant case, the termination of the mandate of the learned Arbitrator without the announcement of the -9- 2025:HHC:21025 arbitral award, admittedly, cannot be attributed to the petitioner. It is not in dispute that proceedings were underway before the learned Arbitrator. In fact, the learned Arbitrator suffered an injury, and for the said reason, letters were addressed to both the parties by the learned Arbitrator for deferring the arbitral proceedings, with a clear note that the next date would be intimated. It is not in dispute that the next date was never communicated. During the interregnum, came in the COVID-19 pandemic. The assertions of the petitioner that it had been requesting learned Arbitrator for convening the proceedings through telephone appear to be bona fide, as is apparent from the order passed by the learned Arbitrator on 01.07.2024, wherein the petitioner’s having approached the learned Arbitrator telephonically has been acknowledged. The petitioner had followed up its telephonic conversations with a written request dated 31.05.2024 for convening the arbitral proceedings. The learned Arbitrator, vide his order dated 01.07.2024, concluded that his mandate for announcing the award had lapsed on 21.11.2021. The learned Arbitrator, in the said order, also acknowledged that no further date was fixed by him after 06.03.2020 for convening the proceedings due to his injury and, thereafter, -10- 2025:HHC:21025 in view COVID-19 pandemic. After the passing of the said order by the learned Arbitrator, the petitioner instituted the present petition on 01.10.2024 under Section 29-A of the Act, seeking extension of the mandate of the Arbitral Tribunal. It is not in dispute that the learned Arbitrator is not to take on record any fresh pleadings or evidence, only hearing is to be conducted in the matter in terms of the decision rendered on 06.11.2019 in Arbitration Appeal No. 8 of 2019. Taking into consideration the above facts, as also the primary objective in rendering the arbitral award towards furtherance of resolution of the dispute through the agreed dispute resolution mechanism as contracted by the parties and highlighted by the Hon’ble Apex Court in M/s Ajay Protech Pvt. Ltd.2, I am of the considered view that sufficient cause has been shown by the petitioner for extending the mandate of the learned Arbitrator. For the foregoing reasons, this petition is allowed. The mandate of the learned Arbitrator is extended by six months from today. This shall, however, be subject to the condition that no further extension shall be granted in the matter. The parties, through their learned counsel, are -11- 2025:HHC:21025 directed to appear before the learned Arbitrator on 14.07.2025. Pending miscellaneous application(s), if any, to stand disposed of. Jyotsna Rewal Dua 3rd July, 2025 Judge (Pardeep)