Section 29A of ACA : Section 29A: Time Limit For Arbitral Award

Explanation using Example

Imagine a scenario where two companies, A and B, are involved in a contractual dispute regarding the delivery of goods. Company A, the buyer, claims that Company B, the seller, has not fulfilled the contract terms. They decide to resolve their dispute through arbitration rather than going to court.

The arbitration process begins, and the arbitral tribunal is formed. According to Section 29A of the Arbitration and Conciliation Act, 1996, the tribunal has twelve months from the completion of pleadings to make an award. The pleadings are completed on April 1, 2023, which means the tribunal should ideally make an award by April 1, 2024.

However, the tribunal and both companies work efficiently, and the award is ready within six months. Because they completed the arbitration swiftly, the tribunal is entitled to additional fees, as agreed upon by both companies. This serves as an incentive for a speedy resolution.

As the deadline approaches, the companies realize they need more time to finalize the settlement. They mutually agree to extend the arbitration period by another six months, which is permissible under the Act.

If they had not agreed on an extension, and the tribunal failed to deliver the award within the initial twelve months, the mandate of the arbitrators would terminate unless the court extended the period. The court could also reduce the arbitrators' fees if it found the delay was due to the tribunal's own conduct.

In this example, the provisions of Section 29A ensure that the arbitration process is conducted within a reasonable timeframe, providing a quicker resolution compared to traditional court litigation.