Arbitration — Time-limit for arbitral award — Section 29A — Arbitrator becomes functus officio on expiry of statutory period — Under Section 29A(1) read with Section 23(4), pleadings must be completed within six months of entering reference; award must follow within twelve months thereafter. Parties did not seek extension under Section 29A(3). Upon expiry of the statutory period (28.02.2023), the sole arbitrator’s mandate stood terminated by operation of law and he became functus officio, subject to any extension ordered by the Court under Section 29A(4).

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1. Arbitration — Time-limit for arbitral award — Section 29A — Arbitrator becomes functus officio on expiry of statutory period — Under Section 29A(1) read with Section 23(4), pleadings must be completed within six months of entering reference; award must follow within twelve months thereafter. Parties did not seek extension under Section 29A(3). Upon expiry of the statutory period (28.02.2023), the sole arbitrator’s mandate stood terminated by operation of law and he became functus officio, subject to any extension ordered by the Court under Section 29A(4).

2. Section 29A(6) — Power to substitute arbitrator is independent of Sections 14 and 15 — Remedy under Sections 14 and 15 is distinct and operates on different grounds (de jure / de facto inability). Expiry of mandate under Section 29A(4) furnishes an independent statutory basis for substitution. Rejection of earlier petitions under Sections 14 and 15 (when mandate had not expired) does not bar substitution under Section 29A(6).

3. Extension of mandate impermissible when mandate has already terminated — High Court erred in extending the mandate of an arbitrator whose mandate had already expired under Section 29A(4). Upon termination of mandate, continuation of the same arbitrator is impermissible; substitution becomes obligatory.

4. Purport of Section 29A — Remedial provision — Applies to all pending arbitrations — Section 29A is remedial and ensures time-bound dispute resolution, in consonance with the object of the Act; it applies even to arbitrations pending on 30.08.2019 (Tata Sons Pvt. Ltd. v. Siva Industries, (2023) 5 SCC 421).

5. Covid-19 exclusion applies — Period from 15.03.2020 to 28.02.2022 excluded per In re Cognizance for Extension of Limitation (2022) 3 SCC 117.

6. Substituted arbitrator appointed — Mandate of sole arbitrator terminated; Court appoints Justice Najmi Waziri (Retd.) as substituted sole arbitrator; proceedings to continue from stage already reached; award to be rendered within six months.

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RATIO DECIDENDI

1. Expiry of mandate under Section 29A(4) results in automatic termination, rendering the arbitrator functus officio, unless the Court extends the period. Since pleadings were completed on 19.11.2020 and the Covid-19 exclusion applied until 28.02.2022, the arbitrator was required to make the award by 28.02.2023. No extension was sought. Therefore, his mandate stood terminated by operation of law.

2. Section 29A(6) confers a substantive and distinct power on the Court to substitute the arbitrator whenever it extends time under Section 29A(4). This power does not depend on, nor is it limited by, the grounds for termination under Sections 14 and 15. Earlier dismissal of proceedings under Sections 14 and 15—when the mandate was still alive—has no bearing once the mandate expires under Section 29A.

3. Once the mandate has expired, continuation of the same arbitrator is impermissible, and the High Court’s extension of mandate was contrary to the statutory scheme. The legislative mandate of ensuring expeditious resolution (object of the Act) requires substitution when mandate ceases.

4. Section 29A is remedial and time-disciplining, applying even to pending arbitrations, and must be enforced strictly to prevent delay contrary to the Act’s object.

5. Arbitral proceedings must continue from the stage already reached upon substitution, ensuring continuity as mandated by Section 29A(6) and (7).