Indian-seated International Commercial Arbitration Not Bound By Statutory Time Limit(Tata Sons Pvt. Ltd., Siva Industries & Holdings Ltd., and Tata Tele Services Ltd. (TTSL))

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The Hon’ble Supreme Court of India recently clarified that International Commercial Arbitrations (ICA) conducted in India are not bound by the statutory time limit prescribed under Section 29-A of the Arbitration and Conciliation Act, 1996. This decision has significant implications for international arbitration proceedings seated in India, providing flexibility and autonomy to the parties involved.

The case in question involved. The parties had entered into various share subscription agreements, including one with NTT Docomo Inc., a Japanese telecom company. Disputes arose when the respondents failed to comply with their obligations under the agreements, leading to arbitration proceedings.

The petitioner argued that the amended Section 29-A of the Act, which imposed a time limit for completing arbitral proceedings, should not be applicable to an ICA. Alternatively, the petitioner requested a further extension of time if the court deemed the amended provisions inapplicable.

The second respondent countered that the amendment should apply to ICAs, as excluding them from the time limit would leave the duration of such proceedings entirely at the discretion of the arbitral forum.

The Supreme Court analysed the position of Section 29-A before and after the 2019 amendment. It concluded that the amended timeline under Section 29-A(1) does not apply to ICAs, as it specifically refers to “matters other than international commercial arbitration.”

The court further noted that the legislature intended the twelve-month period for making an award to be flexible in ICAs. The expression “as expeditiously as possible” and the phrase “endeavour may be made” indicated that the twelve-month timeline was not mandatory in ICAs. In domestic arbitrations, Section 29-A(1) imposes a strict twelve-month deadline for making the award.

The Supreme Court emphasized that the legislature did not expressly exclude the applicability of subsections (3) and (4) of Section 29-A to ICAs. However, it found that these provisions were designed to address extensions of time in domestic arbitrations and were not directly applicable to ICAs.

The court observed that ICAs should be handled differently, as recommended by a high-level committee report chaired by Hon’ble (Retd.) BN Srikrishna, J. The report had highlighted the need for ICAs to have their own mechanisms, distinct from domestic arbitrations.

Regarding the retrospective applicability of the law, the Supreme Court referred to its earlier decision in the Board of Control for Cricket in India v. Kochi Cricket Pvt. case. It held that the amended provisions of Section 29-A were remedial in nature and created new obligations.

In conclusion, the Supreme Court affirmed that ICAs seated in India are not bound by the statutory time limit prescribed under Section 29-A of the Act.

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