Time-Bound Arbitration Under the Arbitration and Conciliation (Amendment) Act: A Success Story or a Procedural Pitfall?

1. ABSTRACT

This report critically examines the implementation and impact of time-bound arbitration provisions, specifically Section 29A, introduced by India’s Arbitration and Conciliation (Amendment) Acts of 2015 and 2019. It highlights the legislative intent to expedite dispute resolution and align India with international arbitration standards. The analysis reveals significant successes in reducing arbitral delays, enhancing predictability, and fostering a more efficient arbitration ecosystem. However, it also identifies persistent challenges, including the potential tension between speed and the quality of awards, complexities from increased judicial intervention, and practical difficulties for arbitrators and parties. The Supreme Court’s pivotal role in clarifying ambiguities and streamlining jurisdictional issues is thoroughly discussed. The report concludes that while the journey towards fully effective time-bound arbitration is ongoing, marked by continuous legislative reforms and judicial refinement, the framework largely represents a success in addressing historical delays, albeit with inherent strains necessitating ongoing vigilance and adaptation.

2. KEYWORDS

Arbitration, Time-bound, Section 29A, Arbitration and Conciliation (Amendment) Act, Judicial Intervention, India, Dispute Resolution, Efficiency, Predictability, Arbitrator Mandate, Supreme Court.

3. INTRODUCTION

3.1. The Genesis of Time-Bound Arbitration in India

3.1.1. Overview of the Arbitration and Conciliation Act, 1996

The Arbitration and Conciliation Act, 1996 (the “Act”), was enacted to provide a robust legal framework for commercial dispute resolution outside traditional court procedures in India. Drawing inspiration from the 1985 UNCITRAL Model Law on International Commercial Arbitration, its core objectives were to minimize judicial intervention and promote arbitration as a swift, cost-effective alternative dispute resolution (ADR) mechanism. Governing both international and domestic arbitration seated in India, the 1996 Act aimed to consolidate disparate legal norms, streamlining the process and enhancing its appeal.

3.1.2. The Problem of Delay in Indian Arbitration Pre-2015

Before the Arbitration and Conciliation (Amendment) Act, 2015, a critical deficiency in the 1996 Act was the absence of specific statutory timelines for rendering arbitral awards. This lacuna often led to proceedings dragging on indefinitely, with some cases lasting over a decade, undermining arbitration’s purpose as an expeditious alternative to litigation. The lack of defined timelines compromised efficiency, frequently necessitating court interventions to compel progress. Even the older Arbitration Act, 1940, with its four-month award period and court extension allowance, was criticized for failing to ensure prompt disposal. This structural flaw in the 1996 Act’s initial design was a compelling impetus for subsequent reforms aimed at addressing chronic delays and procedural inefficiencies.

3.1.3. Legislative Intent Behind the Arbitration and Conciliation (Amendment) Acts of 2015 and 2019

The Arbitration and Conciliation (Amendment) Act, 2015, was a landmark intervention to make Indian arbitration more user-friendly, cost-effective, and aligned with contemporary international standards. A cornerstone was Section 29A, a provision specifically designed to impose a statutory time limit for awards, directly addressing pervasive delays.

Recognizing the need for refinement, the Arbitration and Conciliation (Amendment) Act, 2019, further updated Section 29A. A key change was shifting the 12 months’ starting point. Initially, the clock began when the tribunal “entered upon reference.” The 2019 Amendment moved this to the “completion of pleadings” under Section 23(4), offering a more practical and equitable starting point. This adjustment, along with the exemption of international commercial arbitrations from strict domestic timelines, demonstrates legislative responsiveness to practical challenges. This iterative approach underscores a dynamic legislative process focused on optimizing India’s arbitration landscape.

3.1.4. Introduction to Section 29A: Core Objectives

Section 29A’s fundamental objective is to ensure the timely conclusion of arbitration proceedings and the prompt delivery of awards. By imposing a strict time-bound framework, it prevents indefinite delays that historically plagued Indian arbitration, reducing the burden on the conventional court system and solidifying arbitration’s role as an efficient dispute resolution mechanism. Beyond deadlines, Section 29A incorporates mechanisms to incentivize arbitrators for swift awards, such as provisions for extra fees for awards rendered within six months. Conversely, it introduces penalties, allowing for a reduction in arbitrators’ fees (up to 5% per month) if delays are attributable to the tribunal, fostering accountability.

4. RESEARCH METHODOLOGY

This research employs a critical analytical approach to examine the implementation and impact of time-bound arbitration provisions in India. The methodology involves a comprehensive review of primary legal sources, including the Arbitration and Conciliation Act, 1996, and its subsequent amendments (2015 and 2019), with particular emphasis on Section 29A. Landmark judgments from the Supreme Court of India and relevant pronouncements from various High Courts are thoroughly analyzed to understand judicial interpretation and application.

Secondary sources, such as academic articles, legal commentaries, reports by arbitral institutions, and statistical data, are also consulted for a holistic perspective. The study adopts a comparative lens where appropriate, drawing comparisons with international arbitration standards to assess India’s alignment. The methodology focuses on identifying legislative intent, evaluating practical effectiveness, and highlighting the ongoing evolution of the time-bound arbitration framework through legislative and judicial responses.

5. REVIEW OF LITERATURE

Existing literature on Indian arbitration extensively discusses historical delays and legislative efforts. Early works on the 1996 Act often lamented the absence of clear timelines, which led to protracted proceedings (e.g., Law Commission of India reports, legal journals from early 2000s), undermining arbitration’s promise of expeditious resolution.

The introduction of Section 29A in 2015 marked a significant shift. Post-2015, literature focused on its immediate impact and implications. Initial scholarly articles (e.g., Indian Arbitration Law Review, Journal of Indian Law Institute) debated the practicality of strict timelines, particularly balancing speed and award quality, with concerns about arbitrators being pressured. The 2019 Amendment, refining Section 29A by shifting the timeline’s start and exempting international commercial arbitration, further influenced discourse. Post-2019 studies (e.g., analyses by legal practitioners in specialized blogs) acknowledged legislative responsiveness.

A recurring theme, especially recently, is the Supreme Court of India’s pivotal role in clarifying ambiguities. Judgments like Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd. and Ajay Protech Pvt. Ltd. v. General Manager have been widely discussed, analyzing their impact on procedural certainty and “sufficient cause” interpretation. These analyses commend the judiciary’s pragmatic approach in balancing efficiency with justice.

Despite the consensus on Section 29A’s positive impact on reducing delays, criticisms persist. Some scholars highlight the potential for increased judicial intervention through extension applications, arguing it may erode party autonomy and confidentiality (e.g., contemporary ADR journals). Others point to practical challenges for arbitrators managing complex cases within strict timelines and the potential for fee reductions to deter experienced arbitrators. Cost implications of extension applications also remain a topic in practitioner literature. Overall, literature reflects a continuous evolution in understanding time-bound arbitration in India, exploring nuances of implementation, efficacy, and the delicate balance required for both speed and quality.

6. METHOD

6.1.1. Mandated Periods for Domestic Arbitration

• Domestic arbitral tribunals must render an award within 12 months from the completion of pleadings (as per Section 23(4), post-2019 Amendment).
• With pleadings typically taking about 6 months, the practical total duration is ~18 months from arbitrator appointment.

6.1.2. Party-Consented Extensions

• Parties can mutually extend the 12 months by up to 6 months, without court intervention.
• Beyond 18 months, court approval is required.
• Consent may be express or implied through conduct.

6.1.3. Court-Granted Extensions: “Sufficient Cause”

• If timelines lapse, the arbitrator’s mandate terminates automatically, unless the court extends it on showing “sufficient cause.”
• Courts may impose conditions, including a 5% monthly fee reduction for arbitrator-caused delays (after hearing the arbitrator).
• Courts are to resolve extension applications within 60 days of notice to the opposite party.
• The approach favors justice and effective resolution over rigid timelines.

6.1.4. Exemption for International Commercial Arbitration

• No mandatory 12-month deadline for international commercial arbitration.
• Tribunals are encouraged to resolve matters expeditiously, ideally within 12 months post-pleadings.
• This flexibility aligns with global standards and enhances India’s arbitration framework.

6.2. Successes: Expediting Dispute Resolution and Enhancing Efficiency

6.2.1. Reduction in Arbitral Delays and Case Backlog

Section 29A has helped transform Indian arbitration from protracted and indefinite to a time-bound and structured mechanism. Backlogs have reduced, and finality of awards has improved, providing a more efficient alternative to civil litigation in Indian courts.

6.2.2. Increased Predictability and Finality of Awards

• By fixing timelines, Section 29A creates predictability in dispute timelines. This is enhanced by judicial pronouncements like Rohan Builders v. Berger Paints, which resolved procedural ambiguities about mandate extensions.

6.2.3. Incentives for Timely Conclusion

Section 29A introduces both positive incentives (additional fees for early awards) and negative disincentives (fee reductions and court-imposed costs) to promote promptness in award delivery.

6.2.4. Alignment with Global Standards

By exempting international commercial arbitrations and encouraging institutional arbitration via centres like MCIA and IIAC, Section 29A aligns India with global norms, reflecting UNCITRAL principles. 

6.3. Strains: Challenges and Criticisms in Implementation

6.3.1. Impact on Quality of Arbitral Awards

The imposition of rigid timelines under Section 29A has raised concerns about compromising the quality of arbitral awards. Arbitrators, especially in complex matters, may prioritize speed over substance, leading to poorly reasoned or incomplete awards, undermining the credibility of arbitration as a fair dispute resolution mechanism.

6.3.2. Judicial Intervention vs. Party Autonomy

• Section 29A’s provision for court-ordered extensions post the 18-month period, even with mutual consent of the parties, has led to unintended judicial intrusion into the arbitral process. This contradicts the principle of party autonomy—a foundational tenet of arbitration. Further, applications filed in open court can compromise confidentiality. The court’s power to substitute arbitrators or impose fee reductions also raises concerns over arbitral independence.

6.3.3. Conflicting High Court Interpretations

• Before the Supreme Court’s clarification, High Courts had divergent views on whether tribunals could be revived post-mandate expiry.
• Some courts allowed post-expiry extensions (emphasizing intent to avoid aborting proceedings).
• Others took a strict view, treating “termination” as absolute, adding uncertainty and litigation.

6.3.4. Practical Challenges

• Arbitrators may avoid complex cases due to fears of failing to meet deadlines or facing fee cuts.
• Time limits can be unrealistic for complicated disputes.
• Mandatory court route for extensions, even with mutual consent, can be exploited for delays by parties.

6.3.5. Cost Implications

• Section 29A introduces additional costs (e.g., court applications for extensions, legal fees).
• Fee reduction provisions may deter experienced arbitrators or lead to higher upfront fees.
• Thus, arbitration’s cost-effectiveness becomes variable, depending on the nature of the dispute and the need for extensions.

6.4. Judicial Clarity: Landmark Supreme Court Pronouncements on Section 29A

Ambiguities and conflicting interpretations surrounding Section 29A, particularly concerning mandate termination and court intervention scope, necessitated definitive pronouncements from the Supreme Court of India. These landmark judgments have been crucial in bringing clarity and consistency to time-bound arbitration.

6.4.1. Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd.: Extension of Mandate Post-Expiry

In a pivotal ruling, the Supreme Court in Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd. [(2022) 1 SCC 720] provided much-needed clarity on Section 29A(4). The Court held that the default rule of mandate termination should not be interpreted strictly. Crucially, it affirmed that an application for an extension of time is maintainable even after the expiry of the statutory 12-month period or the six-month consensual extension.

The Supreme Court emphasized that mandate termination under Section 29A(4) is “conditional” upon the non-filing of an extension application, rather than “absolutistic.” The Court highlighted that “terminate” is followed by “unless,” explicitly allowing court-granted extensions. This ruling effectively overturned the strict interpretation previously adopted by the Calcutta High Court. This judgment exemplifies a pragmatic and purposive approach, mitigating a significant procedural strain and preventing arbitration termination on mere technicalities, thereby reinforcing the pro-arbitration stance of the Indian legal system.

6.4.2. Ajay Protech Pvt. Ltd. v. General Manager: Elucidating “Sufficient Cause”

Building on Rohan Builders, the Supreme Court in Ajay Protech Pvt. Ltd. v. General Manager [(2023) SCC OnLine SC 151] further elucidated “sufficient cause” for extensions under Section 29A (4). The Court underscored that “sufficient cause” must be interpreted to facilitate effective dispute resolution, aligning with arbitration’s primary objective. It emphasized that the power to grant extensions is discretionary, not automatic, requiring a genuine and compelling reason.

The Court provided comprehensive factors for assessing “sufficient cause”:

• The conduct of the parties and the arbitral tribunal, specifically the absence of deliberate delay, negligence, or dilatory tactics.
• The stage of the arbitration proceedings, particularly if nearing completion.
• The complexity of the dispute and the volume of the case record.
• The impact of unforeseen external factors, such as the COVID-19 pandemic.
• The time spent on applications before the courts.

The Court also clarified there’s no inherent restriction on the number of extensions, provided “sufficient cause” is continually demonstrated. This detailed elucidation transforms a vague term into a concrete framework for judicial discretion, ensuring extensions are granted judiciously, preventing abuse, and upholding effective dispute resolution.

6.4.3. Chief Engineer (NH) PWD v. M/s BSC & C & C JV: Clarifying “Court” Jurisdiction

Another ambiguity was the “Court” competent for Section 29A applications. The Supreme Court, in Chief Engineer (NH) PWD v. M/s BSC & C & C JV [(2022) 13 SCC 523], provided definitive clarity. The Court held that jurisdiction for Section 29A(4) applications lies solely with the “Courts” as defined in Section 2(1)(e) of the Act (Principal Civil Court of original jurisdiction or High Court exercising ordinary original civil jurisdiction). Crucially, when a higher court (High Court or Supreme Court) appoints an arbitrator under Section 11, that same court retains exclusive jurisdiction over subsequent Section 29A applications. This ensures consistency and prevents lower courts from interfering with higher court appointments. Furthermore, the power to substitute arbitrators under Section 29A(6) is vested in the same court responsible for extending the mandate. This clarification streamlines the judicial framework, reducing jurisdictional conflicts and enhancing legal certainty.

6.4.4. Other Pivotal Judgments and Their Interpretative Impact

The interpretation and application of Section 29A are continuously evolving, with various judgments refining its scope:

• In Tata Sons Pvt Ltd vs. Siva Industries and Holdings Ltd & Ors. [(2023) SCC OnLine SC 470], the Supreme Court emphasized strict adherence to Section 29A timelines, clarifying that delays caused by improper tribunal constitution do not automatically extend the timeline.
• The Delhi High Court, in Powergrid Corporation of India v. SPML Infra Ltd. [(2018) SCC OnLine Del 8696], initially held Section 29A to be strict, deeming awards after mandate expiry invalid and post-award extension applications invalid. This strict interpretation was later superseded by Supreme Court judgments like Rohan Builders.
• The Delhi High Court, in M/S Chinar Steel Industries v. Ircon International Limited [2021 SCC OnLine Del 3173], clarified Section 29A’s retrospective applicability, ruling that the time limit applies to arbitrations invoked post-2015 Amendment, irrespective of when the tribunal “entered reference.”
• The Himachal Pradesh High Court, in Balak Ram and others Vs. NHAI [(2022) SCC OnLine HP 2750], introduced flexibility, holding that consent for extension under Section 29A(3) need not be express or in writing; it can be implied from the parties’ conduct.
• The Madras High Court in M/s Powergear Limited v. M/s Anu Consultants [2025 SCC OnLine Mad 456] further clarified the scope of Section 29A regarding the possibility of multiple extensions. It affirmed that there is no inherent bar to granting more than one extension, provided that “sufficient cause” is demonstrated for each subsequent request, reinforcing the Supreme Court’s flexible approach.

These judgments collectively illustrate the robust and adaptive role of the Indian judiciary in shaping Section 29A’s contours, addressing challenges, and ensuring its effective implementation while maintaining fairness and justice.

7. SUGGESTIONS

7.1. Prioritize Institutional Arbitration: Encourage greater reliance on institutional arbitration. Institutions like the IIAC and MCIA offer well-defined rules and expert case management, which can efficiently monitor timelines and handle extensions, reducing the burden on courts and enhancing party autonomy and confidentiality.

7.2. Clarify “Sufficient Cause” Guidelines: Provide more detailed and standardized guidelines for what constitutes “sufficient cause” for delays, whether through statutory amendments or judicial pronouncements. This will create a predictable framework for arbitrators, helping them manage complex cases effectively without undue concern about disproportionate fee reductions.

7.3. Streamline Extension Process: For extensions beyond the initial 18-month period that have mutual party consent, implement a more streamlined, administrative, or semi-judicial process. This could involve relying on arbitral institutions or designated e-portals instead of mandatory court applications, thereby reducing procedural costs and delays.

7.4. Invest in Arbitrator Training and Case Management: Develop and implement comprehensive training programs for arbitrators focusing on advanced case management techniques. This will equip them with the skills to efficiently handle complex disputes within prescribed deadlines, minimizing the need for extensions.

7.5. Ensure Quality Alongside Speed: Continuously monitor how strict timelines impact the quality of arbitral awards. While speed is crucial, it should not compromise thoroughness or fairness. Explore mechanisms like expert assistance for arbitrators or clearer guidelines for evidence evaluation to maintain high-quality outcomes even under time pressure.

8. CONCLUSION

Section 29A of India’s Arbitration and Conciliation Act (2015 and 2019 Amendments) was introduced to make arbitration faster and align it with global standards, addressing historical delays. It has largely succeeded in reducing case backlogs and increasing predictability by setting strict timelines for awards (12 months from pleadings for domestic arbitration, with a 6-month consensual extension). It also incentivizes arbitrators for speedy awards and penalizes delays attributable to them, while exempting international commercial arbitrations from rigid deadlines to boost India’s global appeal.

Despite these successes, challenges remain. Concerns exist regarding the impact of strict timelines on award quality, especially in complex cases. The need for court intervention for extensions can increase judicial involvement, potentially undermining party autonomy and confidentiality. Initial conflicting High Court interpretations created uncertainty, but the Supreme Court, in landmark judgments like Rohan Builders and Ajay Protech, provided crucial clarity on “sufficient cause” and the maintainability of extension applications even after mandate expiry, pragmatically balancing efficiency with fairness.

In essence, while Section 29A has faced procedural hurdles, it has fundamentally transformed Indian arbitration into a more efficient process. Ongoing legislative evolution and judicial refinement are crucial to further optimize this framework, ensuring arbitration remains an effective and reliable dispute resolution mechanism without compromising justice quality.

9. REFERENCES

Legislation:

• The Arbitration and Conciliation Act, 1996.
• The Arbitration and Conciliation (Amendment) Act, 2015.
• The Arbitration and Conciliation (Amendment) Act, 2019.
• UNCITRAL Model Law on International Commercial Arbitration (1985).

Case Law:

• Ajay Protech Pvt. Ltd. v. General Manager, (2023) SCC OnLine SC 151.
• Balak Ram and others Vs. NHAI, (2022) SCC OnLine HP 2750.
• Chief Engineer (NH) PWD v. M/s BSC & C & C JV, (2022) 13 SCC 523.
• M/S Chinar Steel Industries v. Ircon International Limited, 2021 SCC OnLine Del 3173.
• M/s Powergear Limited v. M/s Anu Consultants, 2025 SCC OnLine Mad 456.
• Powergrid Corporation of India v. SPML Infra Ltd., (2018) SCC OnLine Del 8696.
• Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd., (2022) 1 SCC 720.
• Tata Sons Pvt Ltd vs. Siva Industries and Holdings Ltd & Ors., (2023) SCC OnLine SC 470.

Reports and Publications:

• Law Commission of India, 246th Report on Amendments to the Arbitration and Conciliation Act, 1996 (2014).
• Mumbai Centre for International Arbitration (MCIA) Annual Reports (e.g., historical and recent annual reports available on their official website, providing statistical data on award timelines).

Academic Articles and Commentaries (Illustrative):

• Articles published in the Indian Arbitration Law Review.
• Articles published in the Journal of Indian Law Institute.
• Legal commentaries on the Arbitration and Conciliation Act, 1996 by leading legal scholars.
• Analytical pieces and expert opinions from specialized arbitration blogs and legal news portals (e.g., from Bar & Bench, SCC Online Blog).
• Academic journals and scholarly publications focusing on Alternative Dispute Resolution (ADR) in India.

Online Resources:

• India Code (Official website for Indian legislative texts).
• Manupatra (Subscription-based legal research platform).
• SCC Online (Subscription-based legal research platform).

NANDANI ROHRA

BBA LLb (Hons.)

KPMSOL, NMIMS (Mumbai)