Supreme Court: Resolving a long-standing judicial divergence on whether the jurisdiction to extend the mandate of an arbitral tribunal depends upon the forum that appointed the arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act), or whether it is governed exclusively by the statutory definition of “Court” under Section 2(1)(e), A Division Bench of Pamidighantam Sri Narasimha and R. Mahadevan, JJ., held that applications under Section 29-A of the A&C Act lie exclusively before the “Court” as defined under Section 2(1)(e), and not necessarily before the High Court that appointed the arbitrator under Section 11. It was observed that —
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The “Court” competent to entertain an application under Section 29-A is the Court defined under Section 2(1)(e) of the A&C Act.
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An application under Section 29-A(4) for extension of time lies before the Principal Civil Court of original jurisdiction or High Court exercising original civil jurisdiction, as defined under Section 2(1)(e).
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The forum does not change merely because the arbitral tribunal was appointed by the High Court under Section 11.
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The High Court’s role under Section 11 ends with the appointment of the arbitrator.
The Court set aside impugned orders passed by the Division Bench and Single Judge of the Bombay High Court.
Factual Matrix
In the instant matter, the dispute arose from a Memorandum of Family Settlement dated 11.01.2021 executed among members of the Chowgule family. Owing to subsequent differences, arbitration was invoked on 18-05-2021 under Clause 24 of the settlement.
During the arbitral proceedings, the mandate of the Arbitral Tribunal was endangered on account of delay. On 05-08-2023, Respondent 2 filed an application under Section 29-A of the A&C Act before the Commercial Court seeking extension of time for making the arbitral award. Meanwhile, following the resignation of the presiding arbitrator, an application under Section 11 was moved before the High Court of Bombay at Goa. The High Court allowed the application and appointed an arbitrator vide order dated 31-10-2023.
Subsequently, the Commercial Court, vide order dated 02-01-2024, extended the time for making the award under Section 29-A(4). This order was challenged by Respondent 1 by way of a writ petition contending that once the arbitrator had been appointed by the High Court under Section 11, the Commercial Court lacked jurisdiction to extend the mandate under Section 29-A.
The Single Judge referred the issue to a Division Bench in view of conflicting High Court decisions. The Division Bench held that where the arbitrator is appointed by the High Court under Section 11, an application under Section 29-A(4) would lie only before the High Court. Following this, the Single Judge set aside the Commercial Court’s order but granted liberty to the parties to approach the High Court for extension of time. Aggrieved, the appellant approached the Supreme Court.
Moot Point
“If an arbitral tribunal—whether appointed by the High Court or by the parties—does not complete proceedings within the prescribed or extended time, whether an application for extension of time under Section 29A lies before the High Court or before the Civil Court as defined under Section 2(1)(e) of the Act?”
Divergence in High Court views
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One line of authority held that the expression “Court” in Section 29-A must mean the Court as defined in Section 2(1)(e), regardless of who appointed the arbitrator.
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The other line of decisions, invoking “contextual interpretation”, held that where the arbitrator is appointed by the High Court under Section 11, the power to extend time or substitute arbitrators under Section 29-A must also vest in the High Court, to avoid what was described as a “jurisdictional anomaly”.
Court’s Analysis
The Court undertook a detailed examination of the scheme of the Act, particularly Chapters V and VI dealing with the conduct of arbitral proceedings and making of the award. It emphasised that the Arbitration and Conciliation Act, 1996 is a complete code; the jurisdiction under Section 11 is special, limited and stands exhausted once the arbitral tribunal is constituted; and the referral Court becomes functus officio after appointment and retains no supervisory control over arbitral proceedings.
The Court categorically rejected the notion that appointment of an arbitrator by the High Court creates any continuing supervisory jurisdiction. In a striking observation, the Court stated that,
“it is a misconception to assume that the Supreme Court or the High Court keeps a watch on the conduct of arbitral proceedings… like Orwell’s ‘Big Brother is watching you’.” The Court clarified that the power of appointment under Section 11 cannot be conflated with a supervisory role over arbitral proceedings. Interpretation of Section 29-A
On a “holistic reading” of Section 29-A, the Court held that the power to extend time and to substitute arbitrators under Section 29-A is vested in the ‘Court’ as defined under Section 2(1)(e). It was noted that there is no textual or contextual basis to exclude the Principal Civil Court of original jurisdiction merely because the arbitrator was appointed by the High Court.
The Court held that perceptions of hierarchy, “inferior courts” or “conflict of power” cannot supply context for deviating from a statutory definition.
“Interpretation based on a perception of status or hierarchy of Courts is opposed to the fundamental conception of rule of law. It is apt to refer to the famous statement of Dicey that, ‘however high you may be, the law is above you.’ Law, and law alone is the source of power.”
The Court relied on A.R. Antulay v. R.S. Nayak, 1988 2 SCC 602, where it was held that “jurisdiction of courts comes solely from the law of the land and cannot be exercised otherwise. So far as the position in this country is concerned conferment of jurisdiction is possible either by the provisions of the Constitution or by specific laws enacted by the legislature.” The Court reiterated that jurisdiction flows solely from statute and observed that status or hierarchy of courts is alien to the rule of law.
Power to Substitute Arbitrators
The Court held that the power to substitute arbitrators under Section 29-A(6) was consequential and inseparably linked to the power to extend time. Since the latter vests in the Court defined under Section 2(1)(e), so must the former.
Inapplicability of Section 42
The Court rejected the argument that Section 42 would require all subsequent applications to be filed before the High Court since the Section 11 application was filed there. The Court relied on State of Jharkhand v. Hindustan Construction Co., (2018) 2 SCC 602, where it was held that “Section 42 would not apply to applications made before the Chief Justice or his delegate for the simple reason that the Chief Justice or his delegate is not “court” as defined by Section 2(1)(e).”
The Court held that Section 11 applications are not made before a ‘Court’ as defined under Section 2(1)(e) and therefore Section 42 has no application.
Court’s Decision
The Court allowed the appeals and held that the Division Bench and Single Judge of the High Court erred in holding otherwise. Accordingly, the Court set aside the Division Bench judgment dated 07-08-2024 and the Single Judge’s order dated 21-08-2024, restored the order of the Commercial Court dated 02-01-2024 and granted liberty to the parties to seek further extension before the Commercial Court under Section 29A(5).
[Jagdeep Chowgule v. Sheela Chowgule, 2026 SCC OnLine SC 124, Decided on 29-01-2026]
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