Written Consent Not Mandatory for Extending Arbitral Period by Parties :- Himachal Pradesh High Court
The Himachal Pradesh High Court has provided clarification regarding Section 29A(3) of the Arbitration and Conciliation Act, stating that explicit written consent from parties to extend the arbitration period is not necessary. Instead, consent can be inferred from the parties' actions during the arbitration proceedings. Justice Jyostna Rewal Dua emphasized that the consent envisaged under this section need not be express or in writing; it can be implied from their conduct.
The case in question revolved around appeals concerning land acquisition for a four-lane road by the National Highways Authority of India (NHAI) under the National Highways Act, 1956. The appellants sought enhanced compensation awarded by the Arbitrator.
Initially, the Arbitrator increased the market value of the acquired land and granted statutory benefits. However, the NHAI filed an application under Section 34 of the Arbitration and Conciliation Act to set aside the award. They argued that the award was non-compliant with Section 29A of the Act, as it was announced after the mandated 12-month period without explicit party consent or a court-issued extension.
The District Judge agreed with NHAI, setting aside the award as the Arbitrator proceeded beyond the one-year period without obtaining either explicit party consent or a court extension per Section 29A(3) requirements. This prompted the appellants to appeal the decision.
Justice Dua examined Section 29A(3) of the Act and noted that it necessitates award completion within 12 months from the Tribunal's reference commencement. However, this duration can be prolonged for six additional months through parties' consent.
The court highlighted that Section 29A(3) does not explicitly demand written consent. Consent can be implied from parties' conduct during proceedings. In this instance, both parties participated in arbitration beyond the initial 12 months without any objections, implying their consent for an extension.
Justice Dua asserted that this implied consent validated the award passed by the Arbitrator within two months after the initial 12-month period's conclusion. Thus, it was deemed that the extended time frame was authorized by the parties' implied consent.
In light of these findings, the court allowed the appeals and overturned the District Judge's judgments.