Telangana High Court
Smt. Somuri Ravali vs Somuri Purnachandra Rao on 10 April, 2025
THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA
AND
THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO
CIVIL REVISION PETITION No.739 of 2025
Mr. V. Prasad Rao, learned counsel appearing for the petitioner.
Mr. M.Satyanarayana, learned counsel appearing for the respondent No.1.
Mr. Rusheek Reddy, learned counsel for the respondent Nos.2 and 3.
ORDER:
(Per Hon’ble. Justice Moushumi Bhattacharya)
1. The present Civil Revision Petition is filed against an order
dated 05.02.2025 passed by the Commercial Court at
Hyderabad in Commercial Original Petition No.131 of 2024.
2. By the impugned order dated 05.02.2025, the Commercial
Court allowed the petition filed by the respondent No.1 under
section 29A of The Arbitration and Conciliation Act, 1996, for
extending the mandate of the learned Arbitrator for 6 months in
an ongoing arbitration proceedings between the petitioner, the
respondent No.1 and others. The Commercial Court extended
the mandate of the Arbitrator from 24.09.2024 till 23.03.2025.
3. The matter was first taken up on 07.03.2025 and
continued for a few days thereafter. The Court was informed on
25.03.2025 that the mandate of the Arbitrator had come to an
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end on 23.03.2025. This fact was recorded in the proceeding
sheet dated 25.03.2025.
4. Therefore, the adjudication of whether the Commercial
Court had the jurisdiction to extend the mandate of the
Arbitrator became academic and has remained so since
23.03.2025.
5. Learned counsel appearing for the petitioner, however,
insisted for the Court to express its opinion on the question of
law involved in the matter, i.e., whether the Commercial Court
was the “Court” as defined under section 2(1)(e) of the 1996 Act
and whether it was authorised to grant an extension of the
mandate.
6. The cornerstones of the discussion are section 2(1)(e) and
section 29A(4) of the Act.
7. Section 2(1) of the Act defines several terms and
expressions used in the Act, making the definitions specific to
Part I of the Act and also specific to the context.
Section 2(1) of the Act begins with the following words:
“In this Part, unless the context otherwise requires …..”
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Section 2(1)(e) of the Act defines the term ‘Court’ as
under:
“(i) in the case of an arbitration other than
international commercial arbitration, the principal
Civil Court of original jurisdiction in a district, and
includes the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction to decide
the questions forming the subject-matter of the
arbitration if the same had been the subject-matter
of a suit, but does not include any Civil Court of a
grade inferior to such principal Civil Court, or any
Court of Small Causes;
(ii) in the case of international commercial
arbitration, the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction to decide
the questions forming the subject-matter of the
arbitration if the same had been the subject-matter
of a suit, and in other cases, a High Court having
jurisdiction to hear appeals from decrees of courts
subordinate to that High Court;”
8. Section 2(1)(e)(ii) of the Act contemplates international
commercial arbitrations. Since the present arbitration falls
under Part I of the Act, the definition of “Court” in the context of
international commercial arbitration is not relevant and is
hence not set out above. To clarify, Part I applies to arbitrations
where the place of arbitration is in India: section 2(2) of the Act.
4
9. It is evident from section 2(1)(e)(i) of the Act that the
“Court” would be the Principal Civil Court of original jurisdiction
in a district and would include the jurisdictional High Court.
Section 2(1)(e)(i) does not contain any language which
specifically excludes the High Court from arbitrations under
Part I of the Act, i.e., those that are not international
commercial arbitrations.
10. “International commercial arbitration” is defined under
section 2(1)(f) of the Act as an arbitration relating to disputes
arising out of commercial legal relationships under Indian law,
where one of the parties resides or is incorporated outside India.
As stated above, section 2(1) of the Act declares that the
definitions thereunder shall be determined by the context in
which the definitions are used. In the present case, it is
undisputed that the Arbitrator was appointed by the High Court
in an application made by the petitioner herein under section
11(6) of the Act. Therefore, the High Court, exercising its special
powers of appointment under Section 11(6) of the Act, was the
appointing authority of the Arbitrator in a case involving an
arbitration other than international commercial arbitration.
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11. Admittedly, in the instant case, the Arbitrator commenced
the arbitration and continued it until the petition was filed by
the respondent No.1 for extension of the mandate of the
Arbitrator.
12. Extension of the mandate of an Arbitrator is provided
under section 29A of the Act which limits the time for making
an arbitral award within specified windows. The time frame for
non-international commercial arbitration is twelve months from
the date of completion of pleadings as provided under section
23(4) of the Act. Section 29A(3) of the Act permits the parties to
extend the period beyond twelve months by consent – but with a
cap of an additional six months from the expiry of the twelve
months, as specified under section 29A(1) of the Act.
13. Section 29A(4) of the Act contemplates a scenario where
the arbitral Award is not made within twelve months + six
months. In such situations, the Court can step in and extend
the mandate of the Arbitrator upon an application filed by either
of the parties under section 29A(5) of the Act. The Court may
extend the mandate only for sufficient cause and on any
condition which may be imposed by the Court. The Court also
has the power to substitute the Arbitrator under section 29A(6)
6
of the Act, within the overall scheme and object of the Act, to
ensure efficient and expeditious arbitrations with minimal
judicial supervision.
14. Sections 2(1)(e)(ii) and 29A of the Act have been discussed
only to clarify the issue before us: that is whether the
Commercial Court could have extended the mandate of the
Arbitrator.
15. Section 2(1)(e) read with section 11(6) of the Act is
hierarchy-sensitive for the purpose of determining the order of
Courts for deciding issues of appointment, termination of
Arbitrators and extension of their mandate. The High Court
forms the focal point in both section 2(1)(e) and section 11(6) of
the Act in non-international commercial arbitrations. This
means that while section 11(6) of the Act confers exclusive
powers on the High Court for appointment of an Arbitrator,
section 2(1)(e)(i) operates in tandem in the same scenario i.e.,
domestic arbitrations where the High Court, as the Principal
Civil Court of original jurisdiction in a district, retains the
exclusive power to extend and terminate the mandate of the
Arbitrator.
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16. The facts of the present case place the focus firmly on the
High Court since the Arbitrator was appointed by the High
Court in an application under section 11(6) of the Act. Thus,
the High Court, as the appointing authority, also becomes the
exclusive deciding authority in matters concerning the extension
of the Arbitrator’s mandate. Our view is based on a conjoint
reading of section 11(6) and section 2(1)(e)(ii) of the Act within
the specific factual context of the case.
17. In our view, section 42 of the Act, which directs all
subsequent applications arising out of an Arbitration Agreement
or arbitral proceedings to the Court which received the first
application under Part I, falls under a different category and is
applicable to applications other than appointment of an
Arbitrator under section 11(6) of the Act.
18. Although counsel for the petitioner has taken recourse to
section 42 of the Act, we are of the opinion that section 42
applies to any dispute concerning the arbitration agreement or
situations arising after the commencement of the arbitration
proceedings. The appointment of an Arbitrator under section 11
of the Act occupies a distinct space, where the appointing Court
is specifically designated i.e., the High Court for domestic
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arbitrations and the Supreme Court for International
Commercial Arbitrations. In contrast, section 42 of the Act
simply refers to the “Court” without any specific nomenclature.
19. It is also important to highlight the potential for
anomalous situations if any Court other than the High Court
assumes the power to extend the Arbitrator’s mandate. For
instance, the Arbitrator may be appointed by the High Court (as
in the present case) and the mandate of the Arbitrator thereafter
extended in an application under section 29A(4) or (5) of the Act
or substituted under section 29A(6) by the Principal Civil Court
in a district. The parties may subsequently resort to a fresh
appointment under section 11(6). The new appointment would
necessarily have to be filed before the High Court under section
11 (6) of the Act. Therefore, knocking the doors of different
Courts at different stages of the arbitration process would be
contrary to the hierarchy envisaged under the Act and also in
violation of maintaining the continuity of that hierarchy. The
Act contemplates unifying the procedures by requiring all
subsequent applications for extension, termination, or
substitution to be made only to the High Court where the High
Court was the appointing authority in the first instance. While
the Principal Civil Court having original jurisdiction in a district
9
is authorized to make such decisions in consensual
appointments between the parties, the situation entirely
changes when the appointment is made by the High Court on
an application under section 11(6) of the Act.
20. We find judicial support for this view in several decisions.
21. A Division Bench of the High Court of Bombay at Goa in
Sheela Chowgule Vs. Vijay V. Chowgule and others 1 decided a
reference to the question of whether an application under
section 29A(4) of the Act would lie before the High Court or the
Civil Court having jurisdiction in the case of a domestic
arbitration. The Bombay High Court opined that in the event an
Arbitral Tribunal constituted by the High Court under section
11(6) fails to complete the proceedings within the stipulated
period/extended period, then an application under section
29A(4) would lie to the High Court in case of a domestic
arbitration. Single Bench decisions of the Delhi High Court in
Ovington Finance Pvt. Ltd. Vs. Bindiya Nagar 2 and the Calcutta
High Court in Amit Kumar Gupta Vs. Dipak Prasad 3 also support
our view. None of the decisions cited on behalf of the
1
W.P.No.88 of 2024 dated 07.08.2024
2
2024 DHC 9276
3
(2021) 1 CAL LT 278 (HC)
10
respondent No.1 bear any relevance to the issue at hand i.e.,
whether the power to extend the mandate of an arbitrator is
conferred on a Court inferior to the High Court where the
Arbitrator was appointed by the High Court in an application
under section 11(6) of the 1996 Act.
22. We thus have no doubt that the extension of the
Arbitrator’s mandate in the present case was erroneously
permitted by the Commercial Court. We wish to reiterate that
the issue has become academic in light of the expiry of the
mandate on 23.03.2025. We also clarify that we have not
expressed any opinion on the petitioner’s prayer for substitution
of the Arbitrator or the reasons for seeking such substitution.
23. C.R.P.No.739 of 2025, along with all connected
applications, is accordingly disposed of in terms of the above.
There shall be no order as to costs.
_________________________________
MOUSHUMI BHATTACHARYA, J
_______________________________
B.R.MADHUSUDHAN RAO, J
Date: 10. 04.2025
va
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