Scarpe Marketing Private Limited Vs Anheuser Busch Inbev India Limited

SCARPE MARKETING PRIVATE LIMITED INCORPORATED UNDER COMPANIES ACT-2013, REGISTERED OFFICE AT FLAT NO.4B, RAMA CLASSIC 9, SHILPI VALLEY, GAFOOR NAGAR, MADHAPUR, HYDERABAD-500081, REPRESENTED BY DIRECTOR VENKATA BAPUJI SIMHADRI, AGED ABOUT 45 YEARS.

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SATHISH BABU SANA S/O. LATE SHRI. SANA SUBBA RAO, AGED ABOUT 49 YEARS, RESIDING AT VILLA NO.72, HILL RIDGE VILLAS BESIDE INDIAN SCHOOL OF BUSINESS, GACHIGOWLI, HYDERABAD-500032.

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Digitally signed by B K MAHENDRAKUMAR B K Location: HIGH MAHENDRAKUMAR COURT OFKARNATAKA DHARWAD BENCH Date: 2025.02.20 16:40:32 +0530

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S V BAPUJI S/O. SATYANARAYANA S AGED ABOUT 45 YEARS, RESIDING AT NO.301, SRINIVASAM KPHB, 6^TH PHASE, KUKATPALLY, HYDERABAD-500072.

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S GURUJU S/O. G PRATAP KUMAR AGED ABOUT 44 YEARS, RESIDING AT FLAT NO.504, BLOCK-1, SWATHI HEIGHTS, PRASHANT NAGAR COLONY, A S RAO NAGAR, HYDERABAD-500062.

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…PETITIONERS (BY SRI. K.N.PHANINDRA, SENIOR COUNSEL FOR A. MAHESH CHOWDHARY, ADVOCATE)

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AND:

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ANHEUSER BUSCH INBEV INDIA LIMITED UNIT NO.301-302, DYNASTY BUSINESS, PARK B WING, 3^RD FLOOR, ANDHERI KURLA ROAD, ANDHERI (EAST), MUMBAI-400059, REPRESENTED BY AUTHORIZED REPRESENTATIVE AJITHA PICHAIPILLAI, LEGAL DIRECTOR.

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EAST GODAVARI BREWERIES PRIVATE LIMITED INCORPORATED UNDER COMPANIES ACT-2013, 4^TH FLOOR, PLOT NO.12, PHASE III, ROAD NO.82, JUBILEE HILLS, HYDERABAD-500033, REPRESENTED BY RESOLUTION PROFESSIONAL.

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…RESPONDENTS

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(BY SRI. PRAMOD NAIR, ADVOCATE FOR SRI. PRASHANTH V.G., ADVOCATE FOR CAVEAT RESPONDENT NO.1)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO, SET ASIDE THE IMPUGNED ORDER DATED 10.09.2024 IN COM AA NO. 184/2023 PASSED BY THE HON’BLE LXXXVII (87^TH ) ADDITIONAL CITY CIVIL AND SESSION JUDGE (CCH-87) VIDE ANNEXURE-A, COMMERCIAL COURT COMPLEX AS IT IS ERRONEOUS, ARBITRARY AND BAD IN THE EYES OF LAW. CONSEQUENTLY, DISMISS THE APPLICATION BEARING COM AA NO. 184/2023 IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS PETITION, COMING ON FOR ORDERS (THROUGH VC AT DHARWAD BENCH), THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR

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ORAL ORDER

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The petitioners are before this Court challenging the order passed by the LXXXVI Addl. City Civil Judge (Commercial Court - CCH No. 87), Bengaluru wherein the application filed under Section 29 A (5) of the Arbitration and Conciliation Act, 1996 came to be allowed vide order dated 10.09.2024 in Comm. A.A. 184/2023.

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In short, the petitioners herein who had not tendered their consent for extension of the mandate of the arbitral tribunal, under Section 29-A(3) of the Act, had unsuccessfully resisted the respondent No.1’s application made under Section 29-A(5) of the Act, wherein the Trial Court has granted an extension of the arbitral mandate on grounds of sufficient cause of the demise of the then presiding arbitrator, and on account of the insolvency proceedings initiated against respondent No. 2 herein (who was the respondent No.1 in the Comm. A.A. 184/2023 and the borrower) . Furthermore, the Ld. Commercial Judge has noted in the above that in view of the first proviso appended to Section 29-A(4) of the said Act, the arbitral tribunal was deemed to be continued till the passing of the impugned order.

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However, the petitioners contend that the same is untenable in light of the fact that an application under Section 29A(5) came to be filed only as of 19.04.2023, i.e., almost five months subsequent to the termination of the mandate, unaccompanied with any reasons in support of condonation of the purported delay. The mandate of the Arbitral Tribunal, comprising three retired judges of

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the Hon’ble Supreme Court of India, stood terminated on expiry of twelve (12) months from the date of completion of pleadings on 22.11.2021.

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It would suffice to observe here that the respondent No. 1 had invoked the arbitration against the petitioners under a composite transaction of a Brewing Agreement executed between the respondents herein on 06.02.2015, and several alleged guarantees executed by the petitioners herein in favour of the respondent No. 1 to ensure due performance of the obligation incumbent upon the respondent No. 2 under the said Brewing Agreement.

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4.1. The said Brewing Agreement had come to be terminated, and the advance of INR 17.50 crores earlier lent by respondent No. 1 to respondent No. 2 under the Agreement dated 06.02.2015 having become due, the respondent No.1 invoked arbitration to recover the same. The same was, however, challenged before this Court in CMP No. 304/2018 on grounds that the petitioners herein were non-signatories to the Agreement dated 06.02.2015. Dismissing the same, this Court vide order dated 31.03.2021 had referred all parties herein to arbitration.

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The time period for making of an award under Section 29-A the said Act had lapsed on 21.11.2022 and the Arbitral Tribunal had called upon the parties to communicate the consent for extension of time on 18.03.2023, as required under Section 29A(3) of the Act. The petitioners refused to provide consent as

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regards the continuation of the same on 26.03.2023. Subsequently, the respondent No. 1 had made an application under Section 29A(5) of said Act, which came to be allowed vide order dated 22.09.2023 in Comm. A.A. No. 184/2023. This Court however, in an appeal preferred by the petitioners, remanded the same to the Ld. Commercial Court, vide order dated 13.08.2024 in COMAP No. 383/2023.

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Subsequently, the Ld. Commercial Court has passed the order impugned herein, extending the mandate of the Ld. Arbitrators. The same, however, was challenged and this Court vide order dated 30.09.2024 in COMAP No. 380/2024 dismissed the same on grounds of maintainability. Thereafter, the Ld. Tribunal had passed an order scheduling cross-examination of witnesses in December, 2024. Aggrieved, the petitioners have filed the instant petition on 15.10.2024, impugning the order of the Ld. Commercial Court extending the mandate of the Arbitral Tribunal.

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Sri K N Phanindra, learned Senior Counsel representing the petitioner's counsel primarily contended that when time limit is not prescribed for filing an application under Section 29-A(5), the application must be filed within reasonable time and that the same has to be determined with reference to the strict timelines prescribed for filing an objection to set aside an arbitral award under Section 34 of the Act, 1996.

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7.1. The learned Counsel placed reliance on the decision in the case of Government of Maharashtra (Water Resources

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Department) v. Borse Brothers Engineers and Contractors Pvt Ltd. (2021) 6 SCC 460, involving a challenge to preferring an appeal under Section 37 of the Act, 1996, wherein the Apex Court had opined that a combined reading of Sections 37 of the Act, 1996 and Section 13 of the Commercial Courts Act, 2015, would reveal that an appeal under the Act of 1996, must necessarily be filed within 60-day period as stipulated in Section 13 of the Act, 2015.

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7.2. Therefore, the learned Counsel submitted that where the maximum upper limit of time period provided under Section 34 of the said Act is a maximum of 120 days (three months + grace period of 30 days) and the lower limit being identified as 60 days, a combined reading of the above provisions read with Section 13 of Commercial Courts Act, 2015 reveals that an application under Section 29-A of Act, 1996 must be filed within a reasonable time.

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7.3. He further argued that the learned Commercial Court without answering the point raised for consideration in relation to as to whether the application is barred by limitation has passed the impugned order, and that the same is unsustainable.

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7.4. The learned counsel further contended that the Ld, Commercial Court below has further disregarded that several proceedings were held and orders were passed by the Tribunal subsequent to 20.11.2022 in the absence of any consent or extension by the parties. Therefore, the same cannot be given any validity in retrospect, by way of post facto extension of the mandate.

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In support, he places reliance on:

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1. Government of Maharashtra (Water Resources Department) v. Borse Brothers Engineers and Contractors Pvt Ltd. (2021) 6 SCC 460,

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In response, Sri Pramod Nair, learned Senior Counsel representing the respondent No.1 argued as follows:

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8.1. The Court may extend the time limit for passing the arbitral award even after expiry of the Arbitral Tribunal mandate as stated Section 29-A(4) of the Act, 1996. When the time limit is not stipulated , the Court should refrain from prescribing any limitation period.

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8.2. Section 43(1) of the Act, 1996 provides that limitation Act 1953 shall apply to Arbitration as it applies to proceedings in Court, and Article 137 of the Limitation Act provides that the period of three years will be available for any other application for which no limitation period is prescribed. Therefore, the application filed under Section 29-A(5) was well within the limitation prescribed.

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8.3. The impugned order does not fall under exceptional rarity or cases since the impugned order cannot be said to be passed lacking inherent jurisdiction so as to warrant interference under the writ jurisdiction.

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8.4. Furthermore, the petitioners having failed to immediately raise an objection to the continuation of the arbitral proceedings,

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even after the expiry of the time period for the passing of the award, the petitioners have impliedly consented to extension of arbitration under Section 29-A(3) of the Act of 1996, and have therefore, waived their rights to raise any objection in this regard. In support, reliance is placed upon the following decisions:

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i) Rohan Builders -vs- Berger Paints - (2024 INSC 686);

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ii) North Eastern Chemicals -vs Ashok Paper Mill - (2023 SCC OnLine SC 1649);

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iii)

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Arif Azim -vs- Aptech Ltd. - (2024 SCC OnLine SC 215);

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iv) Navayuga Engineering -vs- Bangalore Metro Rail Corporation - (2021 SCC OnLine SC 469);

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v) Bhaven Construction -vs- Executive Engineer - (2022) 1 SCC 75);

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vi) Punjab State Power Corporation -vs- EMTA Coal Limited - (2020) 17 SCC 93);

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vii) Ayyasamy v. A. Shanmugavel and Ors., 2024 SCC OnLine Mad 4338

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After considering the arguments of the learned counsel

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for the parties, the following points emerges for consideration:

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i. Whether, upon expiry of the time limit to pass an award, the petitioners had given an implied consent to extend the arbitral mandate, and therefore, have waived their right to raise any objection to extension of the mandate, at this belated stage?

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ii. In the absence of a statutorily specified period, what may be the ‘duration of a reasonable period of time’ within which an application for extension of the mandate of the Arbitral Tribunal may be made under Section 29-A(5) of the Arbitration and Conciliation Act, 1996?

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Before delving into the matter at hand, it is pertinent to advert to the relevant provisions of the Act, 1996, and the relevant legal precedents established by various Courts of law with reference to the said provision.

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Section 29-A of the said Act deals with Time limit for the Arbitral Award, and reads thus -

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“ 29A. Time limit for arbitral award.— (1)The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23.

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Provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavor may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23.

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(2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.

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(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months.

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(4) If the award is not made within the period specified in sub-section (1) or the extended period specified under subsection (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period:

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Provided that while extending the period under this sub-section, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent. for each month of such delay.

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Provided further that where an application under subsection (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application:

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Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced.

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(5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court.

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(6) While extending the period referred to in sub-section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material.

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(7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal.

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(8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section.

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(9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.”

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11.1. Section 34 of the said Act deals with setting aside of the arbitral award on only the grounds enumerated under subsection (2), and sub-sections (3) and (6) thereof dealing with time limit for filing an application thereunder, read thus -

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34. Application for setting aside arbitral award.—

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(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:

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Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

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… (6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.

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11.2. Section 37 of the said Act deals with appealable orders, and reads thus -

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37. Appealable orders. —(1) Notwithstanding anything contained in any other law for the time being in force, an appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:—

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(a) refusing to refer the parties to arbitration under section 8;

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(b) granting or refusing to grant any measure under section 9;

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(c) setting aside or refusing to set aside an arbitral award under section 34.

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(2) Appeal shall also lie to a court from an order of the arbitral tribunal—

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(a) accepting the plea referred to in sub-section

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(2) or sub-section (3) of section 16; or

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(b) granting or refusing to grant an interim measure under section 17.

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(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or takeaway any right to appeal to the Supreme Court.

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11.3. Section 43 of the Act deals with applicability of the law of Limitation, and reads thus -

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43. Limitations.— (1) The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings in court.

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(2) For the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be deemed to have commenced on the date referred to in section 21.

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(3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper.

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(4) Where the Court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed by the Limitation Act, 1963 (36 of 1963), for the commencement of the proceedings (including arbitration) with respect to the dispute so submitted.

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The learned Senior Counsel for the petitioner argued that the application under Section 29-A(5) of the Arbitration and Conciliation Act, 1996, was filed nearly five months after the Arbitral Tribunal’s mandate expired on 21.12.2022. He contended that such a delay is unreasonable and, therefore, the application should be rejected.

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He relied on the Supreme Court’s decision in Government of Maharashtra (Water Resources Department) v. Borse Brothers Engineers and Contractors Pvt. Ltd. (2021) 6 SCC 460. In that case, the Court opined on a combined reading of Section 13 of the Commercial Courts Act, 2015, and Section 37 of the Arbitration Act, 1996, that an appeal under Section 37 must be filed within the prescribed limitation period, with a maximum extension of 60 days.

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13.1. The Court further observed that the objective of the Arbitration and Conciliation Act, 1996, the Commercial Courts Act, 2015, and the Limitation Act, 1963, is to ensure the speedy resolution of disputes. It emphasized that appellants do not have an automatic right to seek a condonation of delay, even if they provide a valid reason in a particular case.

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The above case-law primarily dealt with the issue of whether delays in filing appeals under Section 37 of the Arbitration Act, 1996, after the conclusion of arbitral proceedings and subsequent court adjudication under Section 34, would contradict the legislative intent of ensuring quick dispute resolution. The Court clarified that while appeals are an extension of the original

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proceedings, they are fundamentally different from initial adjudication. An appeal is a review of the initial decision and serves as a second opportunity for the aggrieved party to challenge the outcome of the first instance.

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Hence, the Apex Court, in consonance with the stated object and the provisions of the Act of 1996 has strictly construed the period of limitation in preferring the appeals under Section 37 of the said Act. There is no quarrel with the said proposition. However, the case at hand entails the extension of the period of the arbitral mandate for adjudicating upon the lis, in the first instance. The pleadings in the arbitration dispute having been completed as way back as in November 2021, any interference with the order extending the arbitral mandate at this stage, would but negate the stated object of speedy disposal and fair and efficient resolution of disputes, and run counter to the ratio enunciated in the case of Borse Brothers . Therefore, any reliance on the case-law does not benefit the case of the petitioners herein.

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The learned Senior Counsel appearing for respondent No.1 drew the attention of this Court to the decision of the Apex Court in the case of Rohan Builders (India) Pvt Ltd. v. Berger Paints India Ltd. 2024 INSC 686, wherein the Court relied upon the 176th Report of the Law Commission of India and observed that an application for extending the time period for passing an arbitral award under Section 29-A(4) read with Section 29-A(5) of the Act, 1996 is maintainable even after the expiry of twelve months or the extended period of six months, and further subjected

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the exercise of judicial discretion in the grant of extension under sub-section (4) to the existence of sufficient cause.

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16.1. As regards the argument of the petitioner herein that such an application has to be made within a reasonable period of time, the Apex Court relied upon its earlier decision in the case of North Eastern Chemicals Industries (P) Ltd. and Another v. Ashok Paper Mill (Assam) Ltd. and Another, 2023 SCC OnLine SC 1649, wherein the Court had opined that “when no limitation strands prescribed it would be inappropriate for a Court to supplant the legislature’s wisdom by its own and provide a limitation, more so in accordance with what it believes to be the appropriate method”.

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16.2. The Apex Court ( in Rohan Builders) further observed that any instance of abuse by rogue litigants to render the time-line for making the award inconsequential is preempted by the statutory requirement of sufficient cause for granting any such extension under Section 29-A(4) of the Act, 1996 and that the same shall not be granted in a mechanical manner on the filing an application, under Section 29-A(5) of the Act.

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16.3. The Court further clarified that the second proviso to Section 29-A(4) of the Act, 1996 prescribes that the mandate of the Arbitral Tribunal remains in continuance where an application under sub-section (5) is pending.

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In Arif Azim v. Aptech Ltd., 2024 SCC OnLine SC 215, the Apex Court dealt with a case of applicability of the law of

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limitation to an application made under Section 11 of the Act of 1996. The Court opined therein that the Law of Limitation is undisputedly applicable to any invocation of right under Section 11 of the Act of 1996, and that Courts can neither permit agitation of dead or stale claims nor belated invocation of the right to arbitration or belated appointment of arbitrators. It further emphasised that the “object behind having a prescribed limitation period is to ensure that there is certainty and finality to litigation and assurance to the opposite party that it will not be subject to an indefinite period of liability”.

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17.1. In the case at hand, the petitioners cannot claim to be prejudiced by the application under Section 29-A(5) of the Arbitration and Conciliation Act, 1996, which was filed five months after the expiry of the 12-month period from the completion of pleadings. The arbitration proceedings are still at the stage of cross-examination of witnesses, and the final award has not yet been issued. Since the arbitration is still ongoing, the petitioners cannot argue that they have suffered due to excessive delay, especially when the delay was caused by factors beyond the control of respondent No. 1.

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17.2. The Supreme Court, in Azim Premji , held that since the Limitation Act, 1963, does not specify a time limit for filing an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, such cases would fall under the residuary provision of Article 137 of the Limitation Act.

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17.3. Similarly, Shri Pramod Nair argued that since there is no specific time limit for filing an application under Section 29-A(5) of the Arbitration Act, it should also be governed by Article 137 of the Limitation Act. This article states that the limitation period starts from the date when the right to apply arises and extends for three years. Since respondent No. 1 filed the application just five months after the 12-month period ended, it cannot be considered timebarred. However, this argument cannot be accepted and will be addressed later.

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Counsel for respondent No. 1 also relied on Bhaven Construction v. Executive Engineer, (2022) 1 SCC 75 , where the Hon’ble Supreme Court held that judicial interference in arbitration under Articles 226 and 227 of the Indian Constitution is permitted only in rare and exceptional cases. Such interference is justified only if a party is left without any legal remedy under the statute or if there is clear bad faith. The Court emphasized that judicial intervention should not undermine the fairness and efficiency of arbitration. This principle was also upheld in Punjab State Power Corporation v. EMTA Coal Limited, (2020) 17 SCC 93, and Navayuga Engineering v. Bangalore Metro Rail Corporation, (2021) SCC OnLine SC 469 , where the Hon’ble Supreme Court stated that courts should intervene only in cases of extreme injustice, clear legal errors, or lack of jurisdiction.

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After reviewing the legal precedents cited by the petitioner, we now examine the two main arguments made by counsel for respondent No. 1. First, Shri Pramod Nair argued that

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the petitioners had given implied consent to extend the arbitral mandate and, therefore, cannot now challenge the Commercial Court’s order extending the mandate. He referred to the Madras High Court’s ruling in Ayyasamy v. A. Shanmugavel and Others, 2024 SCC OnLine Mad 4338 , which interpreted Section 29-A as a procedural provision. The court in that case held that if a party does not object to an extension of the arbitral mandate, they cannot challenge it later after the final award is issued.

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19.1. In this case, the Arbitral Tribunal’s mandate expired on 21.11.2022. According to the ‘List of Key Dates’ submitted by respondent No. 1, the tribunal had asked the parties to confirm their consent for the extension of the mandate on 18.03.2023. The petitioners had refused to give their consent on 26.03.2023. Thereafter, Respondent No. 1 had filed Comm. A.A No. 184/2023 before the Commercial Court under Section 29-A(5) of the Arbitration Act on 19.04.2023. The petitioners have not provided any evidence to challenge or contradict the list of dates submitted by respondent No. 1.

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It can be reasonably concluded that the arbitral mandate lapsed on 21.11.2022 and that neither the parties nor the arbitrators took note of the impending lapse before this date. After the mandate expired, the petitioners did not immediately object to the continuation of the arbitral proceedings. It was only after more than four months, when the Arbitral Tribunal had asked the parties on 18.03.2023 to confirm their consent for extending the mandate, that the petitioners first raised an objection on 26.03.2023.

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20.1. By failing to object earlier, the petitioners effectively waived their right to refuse consent for the extension and implicitly agreed to the continuation of the mandate. As a result, they also accepted all proceedings conducted between 21.11.2022 (the date of lapse of mandate) and 19.04.2023 (when an application under Section 29-A(5) of the Act was filed).

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20.2. Since the petitioners did not raise an objection at the earliest opportunity, they implicitly consented to the extension of the mandate and cannot now challenge its continuation at this late stage.

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Responding to the petitioners’ argument that the application under Section 29-A(5) of the Act of 1996 was not filed within a reasonable time— the same having been made approximately four months after the mandate lapsed—Shri Pramod Nair contended that Article 137 of the Limitation Act, 1963, applies by default in the absence of a specific limitation period for such applications.

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21.1. Article 137 prescribes a limitation period of three years from when the right to apply arises. Therefore, the application under Section 29-A(5), having been filed within this three-year period, cannot be considered to be time-barred. However, interpreting the law this way would contradict the object of the Arbitration and Conciliation Act, 1996 — speedy resolution of disputes. Section 29-A(1) of the Act sets a time limit of just one year from the completion of pleadings for the passing of an arbitral award. A logical reading of the statute suggests that the legislature

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could not have intended for an application under Section 29-A(5) to have a longer timeframe than the period prescribed for making the award itself.

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21.2. While courts cannot create a legislative provision where none exists, they must strike a balance between the absence of a specified limitation period for filing an application under Section 29-A(5) and the need to prevent undue delays. Therefore, any such application must be made within a reasonable period after the mandate expires.

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Based on the Supreme Court’s decision in Rohan Builders (supra) , it can be concluded that extending the arbitral mandate under Section 29-A(4) of the Arbitration and Conciliation Act, 1996—through an order by a court with original civil jurisdiction—is subject only to the presence of “sufficient cause.” The exercise of judicial discretion in granting such an extension is not restricted by a rigid definition of ‘reasonable time’ within which an application under Section 29-A(5) must be made. The determination of what constitutes a ‘reasonable period’ depends on the facts and circumstances of each case. Moreover, any objection to an application under Section 29-A(5) of the said Act must go beyond a vague claim of prejudice and clearly demonstrate how the opposing party would be adversely affected by allowing a delayed application.

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22.1. In this case, the petitioners had implicitly consented to the extension of the arbitral mandate. They only objected to the extension on 26.03.2023, approximately four months after the

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mandate had lapsed. However, the respondent No. 1 filed the application for extension under Section 29-A(5) on 19.04.2023— less than a month after the petitioners’ objection. Given these facts, the application was filed within a reasonable time after the expiration of the mandate as per Section 29-A(1) of the Act, 1996.

¶165

The impugned order dated 10.09.2024, passed by the Learned Commercial Court, records that the delay in passing the arbitral award was due to two primary reasons:

¶166

• The initiation of insolvency proceedings against respondent No. 2 (who was originally the borrower and an opposing party to the claimant-respondent No. 1).

¶167

• The death of the former presiding arbitrator of the Arbitral Tribunal.

¶168

Upon being satisfied that “sufficient cause” existed and that any contrary decision would only cause further delays and harm the position of the parties—particularly the originally aggrieved claimant, respondent No. 1—the Learned Commercial Court extended the arbitral mandate for one year from the date of the order, i.e., 10.09.2024. Consequently, the parties were rightfully directed to continue arbitration proceedings for resolving the pending dispute between claimant respondent No. 1 and the borrower/guarantor petitioners.

¶169

In light of established legal principles that Writ Courts should only interfere in arbitral proceedings in cases of exceptional rarity, the present petition lacks merit and warrants dismissal.

¶170

22 -

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NC: 2025:KHC:5439 WP No. 29349 of 2024

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Accordingly, I order the following:

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ORDER

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i) The instant petition stands dismissed.

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ii) It is hereby directed that the time expended in the prosecution of the instant petition shall be excluded from the extended period of time granted by the Ld. Commercial Court vide order dated 10.09.2024, for the purpose of passing the arbitral award.

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Sd/(HEMANT CHANDANGOUDAR) JUDGE

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BKM Ct:vh List No.: 19 Sl No.: 1

Scarpe Marketing Private Limited v. Anheuser Busch Inbev India Limited

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Scarpe Marketing Private Limited v. Anheuser Busch Inbev India Limited

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