TATA SONS PVT LTD (FORMERLY TATA SONS LTD) versus SIVA INDUSTRIES AND HOLDINGS LTD & ORS

[2023] 9 S.C.R.

ATATA SONS PVT LTD (FORMERLY TATA SONS LTD)

SIVA INDUSTRIES AND HOLDINGS LTD & ORS

(Miscellaneous Application No 2680 of 2019)

(Arbitration Case (Civil) No. 38 of 2017)

JANUARY 05, 2023

[DR. DHANANJAYA Y CHANDRACHUD, CJI ANDCPAMIDIGHANTAM SRI NARASIMHA, JJ.]

Arbitration and Conciliation Act, 1996: s. 29A (as amended)– Time limit for arbitral award – Time limit of 12 months as providedunder the amended s. 29A (1) for passing an arbitral award –Applicability of, to international commercial arbitrations – Held:DTimeline of twelve months for making an arbitral award is notapplicable to ‘international commercial arbitrations’ – In terms ofthe amended provisions of s. 29A, arbitral tribunals in internationalcommercial arbitrations are only expected to make an endeavor tocomplete the proceedings within twelve months from the date ofcompletion of pleadings and are not bound to abide by the timeElimit prescribed for domestic arbitrations – As regards, prospectiveor retrospective application of s. 29A, the 2019 Amendment Act doesnot contain any provision equivalent to s. 26 of Act 3 of 2016evincing legislative intent making the application of the amendedprovision prospective – Since s. 29A(1), as amended, is remedial inFnature, it should be applicable to all pending arbitral proceedingsas on the effective date-30 August 2019 – Thus, in the instant case,the sole arbitrator to decide upon any further extension of timebeyond the originally stipulated – Sole arbitrator may issueappropriate procedural directions for extension of time whileendeavoring an expeditious conclusion of the arbitration.G

Procedural law: Nature of – Prospective or retrospectiveapplication – Held: Procedural law establishes mechanism fordetermining rights and liabilities of party and machinery forenforcing them – Generally, procedural laws are presumed to beretrospective, unless there is clear indication that such was not

the intention of the legislature, or the procedural law imposes newobligations qua transactions already concluded or creates new rightsor liabilities.

Allowing the applications, the Court

HELD: 1.1 After the amendment, Section 29A(1) of theArbitration and Conciliation Act, 1996 stipulates that the award“in matters other than international commercial arbitration” shallbe made by the arbitral tribunal within period of twelve monthsfrom the date of the completion of the pleadings under Section23(4). The expression “in matters other than an internationalcommercial arbitration” makes it abundantly clear that thetimeline of twelve months which is stipulated in the substantivepart of Section 29A(1), as amended, does not apply to internationalcommercial arbitrations. This is further reaffirmed in the provisoto Section 29A(1) which stipulates that the award in the matter ofan international commercial arbitration “may be made asexpeditiously as possible” and that an “endeavour may be madeto dispose of the matter within period of 12 months” from thedate of the completion of pleadings. The expression “asexpeditiously as possible” coupled with the expression“endeavour may be made” demonstrate that the intent ofParliament is that the period of twelve months for making theaward is not mandatory in the case of an international commercialarbitration. In an international commercial arbitration, the arbitraltribunal is required to endeavour, that is, make an effort to renderthe arbitral award within period of twelve months or in timelymanner. In domestic arbitration, Section 29A(1) stipulates amandatory period of twelve months for the arbitrator to renderthe arbitral award. In contrast, the substantive part of Section29A(1) clarifies that the period of twelve months would not bemandatory for an international commercial arbitration. Hence,post amendment, the time limit of twelve months as prescribedin Section 29A is applicable to only domestic arbitrations and thetwelve-month period is only directory in nature for aninternational commercial arbitration. [Para 25][1279-C-G]

1.2 The Committee chaired by Justice B.N. Srikrishnaindicated that international arbitration institutions had been

Acritical of the setting up of timelines for conducting internationalarbitrations. International arbitral institutions with their ownmachinery for case management were of the view that they didnot require the monitoring of timelines by the intervention of thecourt. The Committee also noted that in other jurisdictions,timelines for arbitral proceedings are usually agreed by the partiesBthemselves in accordance with the nature and complexity of thedispute. The intervention of the court in the extension of timelineswas criticized by arbitral institutions and eventually led to theformulation of the amended provisions of Section 29A which haveexpressly kept international commercial arbitrations outside theCpurview of the mandatory timelines provided in Section 29A.Hence, in terms of the amended provisions of Section 29A,arbitral tribunals in international commercial arbitrations are onlyexpected to make an endeavor to complete the proceedings withintwelve months from the date of completion of pleadings and arenot bound to abide by the time limit prescribed for domesticDarbitrations. [Para 29][1282-A-D]

1.3 Procedural law establishes mechanism for determiningrights and liabilities of party and machinery for enforcing them.Generally, procedural laws are presumed to be retrospective,unless there is clear indication that such was not the intentionEof the legislature,or the procedural law imposes new obligationsqua transactions already concluded or creates new rights orliabilities. [Para 33][1283-G; 1284-A]

1.4 The 2019 Amendment Act does not contain anyprovision equivalent to Section 26 of Act 3 of 2016 evincing aFlegislative intent making the application of the amended provisionprospective. The amended provisions of Section 29A, in termsof which the arbitral tribunal has to endeavour to dispose of theproceedings in an international commercial arbitration asexpeditiously as possible within period of twelve months fromGthe completion of the pleadings are remedial in nature. Theamended provision has excepted international commercialarbitrations from the mandate of the twelve month timeline whichgoverns domestic arbitrations. The amendment is intended tomeet the criticism over the timeline in its application tointernational commercial arbitrations. The amendment is remedialH

TATA SONS PVT LTD (FORMERLY TATA SONS LTD) v. SIVA INDUSTRIES

AND HOLDINGS LTD

in that it carves out international commercial arbitrations fromthe rigour of the timeline of six months. This lies within the domainof the arbitrator and is outside the purview of judicial intervention.The removal of the mandatory time limit for making an arbitralaward in the case of an international commercial arbitration doesnot confer any rights or liabilities on any party. Since Section29A(1), as amended, is remedial in nature, it should be applicableto all pending arbitral proceedings as on the effective date i.e.,30 August 2019. [Para 34][1284-B-E]

1.5 Consistent with the amended provisions of Section 29A,the sole arbitrator in the instant case, would be acting within hisdomain and jurisdiction to decide upon any further extension oftime beyond what is originally stipulated at the meeting whichwas held on 21 March 2018. The sole arbitrator may issueappropriate procedural directions for extension of time while atthe same time endeavoring an expeditious conclusion of thearbitration. [Para 37][1285-D]

Board of Control for Cricket in India v. Kochi CricketPvt. Ltd (2018) 6 SCC 287 : [2018] 2 SCR 829;Thirumalai Chemicals Ltd v. Union of India (2011) 6SCC 739 : [2011] 4 SCR 838; Jose Da Costa and Anr.v. Bascora Sadasiva Sinai Narcornim, (1976) 2 SCC917; Gurbachan Singh v. Satpal Singh (1990) 1 SCC445 : [1989] 1 Suppl. SCR 292; Rajendra Kumar v.Kalyan (D) by Lrs, (2000) 8 SCC 99 : [2000] 2 Suppl.SCR 114; Hitendra Vishnu Thakur v. State ofMaharashtra, (1994) 4 SCC 602 : [1994] 1 Suppl. SCR360; Shapoorji Pallonji & Co. Pvt. Ltd. Vs Jindal IndiaThermal Power Ltd. OMP (Misc) (Comm.) No 512/2019; ONGC Petro Additions Ltd. vs Ferns ConstructionCo. Inc. OMP (Misc) (Comm) 256/2019; M/s SARAInternational Pvt. Ltd. Vs Southern Eastern Railways& Anr. ARBP No. 28 of 2020; MBL Infrastructures Ltdv. Rites Ltd. OMP (Misc) (Comm) 56/2020, as decidedon 10 February 2020 – referred to.

Case Law Reference[2018] 2 SCR 829referred toPara 32

From the Judgment and Order dated 17.01.2018 of the SupremeCourt of India in ARBIT CASE (C) No.38 of 2017.

CJaideep Gupta, Sr. Adv., Mahfooz Ahsan Nazki, Kunal Chatterjee,Ms. Rajeswari Mukherjee, Ms. Niti Richhariya, Ms. Ria Dalwani, PolankiGowtham, Advs. for the Petitioner.

Ankur Kashyap, Ajith S Ranganathan, Rohit Rajershi, Aman Bajaj,Merusagar Samantaray, Advs. for the Respondents.DThe Judgment of the Court was delivered by

DR. DHANAJAYA Y CHANDRACHUD, CJI

1. The applicant Tata Sons Pvt Ltd is company incorporatedunder the Indian Companies Act 1913. The first respondent, SivaIndustries and Holdings Ltd is company incorporated under theECompanies Act 1956 with registered office at Chennai. The secondrespondent, Sivasankaran, who is the promoter of the first respondentis resident of Seychelles.

2. The applicant, the first respondent and Tata Tele Services Ltd[1]executed share subscription agreement on 24 February 2006 for theFissuance and allotment of shares of TTSL to Siva Industries inaccordance with its terms and conditions.

3. Subsequently, share subscription agreement dated 12November 2008 was entered into between NTT Docomo Inc,[2] companyincorporated in Japan, the applicant and TTSL. In terms of the agreement,GDocomo sought to acquire 26% of the equity share holding of TTSLthrough combination of primary shares (fresh shares issued and allottedby TTSL) and secondary shares (shares held by certain existingshareholders of TTSL).

1 “TTSL”

2 “Docomo”H

4. The first respondent was an existing shareholder of TTSL andwas invited to participate in the sale of secondary shares to Docomo.Accordingly, Docomo and the first respondent executed secondaryshare purchase agreement dated 3 March 2009 in terms of which Docomoacquired 20.740 million equity shares of TTSL from the first respondent.The applicant, TTSL and Docomo executed Shareholders’ Agreementdated 25 March 2009 to record the terms and conditions of theunderstanding between the parties regarding the rights, obligations andduties with respect to Docomo’s ownership of shares of TTSL.Thereafter, the applicant, TTSL and the respondents executed an Interse agreement. The agreement, inter alia, obliged the respondents topurchase the TTSL shares on pro-rata basis in the event Docomoexercised its sale option under the Shareholder’s Agreement.

5. Docomo addressed sale notice on 7 July 2014 to the applicantwhile invoking its sale option under clause 5.7 of the Shareholder’sAgreement dated 25 March 2009.

6. Disputes having arisen between the applicant and Docomo, thelatter invoked arbitration against the applicant under the Rules of theLondon Council for International Arbitration. three-member Tribunalmade its award dated 22 June 2016, consequent upon which the applicantwas called upon to make payment to Docomo and to acquire the sharesof TTSL which were put by Docomo.

7. Thereupon, the applicant called upon the first respondent underthe Inter se agreement to proportionately pay for and acquire back itsshareholdings in TTSL from Docomo. Under the terms of the Inter seagreement, the second respondent, as promoter of the first respondentcompany, had agreed to be liable to the applicant in the event that thefirst respondent failed to fulfill its obligation.

8. The applicant issued notice of arbitration on 15 June 2017 tothe first respondent and to the second respondent (a foreign party, beinga resident of Seychelles) under Clause 10 of the Inter se agreement andnominated an arbitrator. Clause 10 states that the Arbitration shall be atMumbai and Mumbai Courts have exclusive jurisdiction. The number ofarbitrators is fixed as three by the Clause.

9. The respondents did not appoint their nominee arbitrator despitethe service of the arbitration notice. The applicant filed petition beforethis Court under Section 11(6) of the Arbitration and Conciliation Act1996[3] for the constitution of an arbitral tribunal in an international

3 “Arbitration Act”

Acommercial arbitration. The Supreme Court had exclusive jurisdiction toentertain the arbitration petition since the proposed arbitration betweenthe applicant and the respondents, of whom the second respondent is aforeign party, was an international commercial arbitration in terms ofSection 2(1)(f) of the Arbitration Act.

10. By an order dated 17 January 2018 of this Court in proceedingsBinitiated under Section 11(6) of the Arbitration Act, Mr Justice S N Variavawas appointed as the sole arbitrator with the consent of the parties.

11. The arbitrator entered upon the reference on 14 February2018. On 21 March 2018, preliminary meeting was held between theparties and the arbitrator at which the parties agreed to six monthsCextension, if the arbitral proceedings could not be completed within aperiod of twelve months commencing from the date the arbitral tribunalentered reference. The time to deliver the award in the proceedingsbefore the arbitral tribunal stood extended until 14 August 2019 since theparties had consented to an extension of six months.

D12. The applicant filed the statement of claim on 13 April 2018.The first respondent filed the statement of defense on 21 June 2018. On30 July 2018, the arbitral tribunal disposed of applications under Sections16 and 17 filed by the first respondent and the applicant respectively.Between 15 and 25 October 2018, the examination of the applicant andthe first respondent’s witnesses took place before the arbitral tribunal.E13. During the pendency of the arbitral proceedings, IDBI BankLtd initiated insolvency proceedings against the first respondent underthe Insolvency and Bankruptcy Code 2016.[4] By an order dated 5 July2019, the National Company Law Tribunal, Chennai initiated the CorporateInsolvency Resolution Process[5] under the IBC and placed moratoriumon all proceedings against the first respondent, including arbitralFproceedings.

14. The original period of one year and the extension of six monthswhich was agreed upon by the parties expired on 14 August 2019. On14 December 2019, Miscellaneous Application[6] was filed by theapplicant before this Court seeking an extension of the mandate of theGtribunal. The applicant sought an extension of the mandate of the arbitraltribunal from 14 August 2019 for period of six months after the date onwhich the moratorium imposed under the IBC on 5 July 2019 against thefirst respondent would stand vacated.

4 “IBC”5 “CIRP”H6 MA No. 2680 of 2019

15. The hearing of the MA was adjourned by an order of thisCourt dated 7 January 2020 in view of the circumstances at that time.

16. In the meantime, on 3 June 2022, the first respondent hasbeen freed from the rigours of the CIRP in pursuance of an order passedby this Court. Accordingly, there is no longer moratorium overproceedings against the first respondent, with effect from 3 June 2022.

17. An interlocutory application[7] has been filed on behalf of theapplicant in the MA in view of two developments:

a.The first respondent, as consequence of the order of thisCourt dated 3 June 2022, has been freed from the rigoursof the CIRP; and

b.As result of the amendment of Section 29A of theArbitration and Conciliation Act, 1996, with effect from 30August 2019, the arbitration proceedings before the solearbitrator should, in the submission of the applicant, beallowed to automatically continue in view of the amendmentof the statute.

18. For convenience of reference, the reliefs which have beensought in the IA are extracted below:

“a. Hold that the Arbitration Proceedings between the partiesherein, presided over by the Ld. Sole Arbitrator (Retd.) Hon’bleMr. Justice S.N. Variava, may be allowed to continue without anyneed for an extension of the term of the Ld. Sole Arbitrator; or

b. Alternatively, in the event this Hon’ble Court is of the opinionthat the amended Section 29A (following the 2019 Amendment)is inapplicable to the present Arbitration Proceedings, allow theextension of the time limit within which Ld. Sole Arbitrator (Retd.)Hon’ble Mr. Justice S.N. Variava is to render an award in theArbitration Proceedings between the parties by period of 1 year.”

19. This Court issued notice on the IA on 25 November 2022.

20. The provisions of Section 29A were introduced into theArbitration Act with effect from 23 October 2015 by Act 3 of 2016[8].Section 29A was substituted by Act 33 of 2019[9] with effect from 30August 2019. The provisions of Section 29A as originally inserted and asthey stand after the amendment of 2019 are tabulated below:

7 IA No. 155371 of 20228 2015 Amendment Act9 2019 Amendment Act

ASECTION 29-A PRE AND POST 2019 AMENDMENT

TATA SONS PVT LTD (FORMERLY TATA SONS LTD) v. SIVA INDUSTRIESAND HOLDINGS LTD [DR. DHANAJAYA Y CHANDRACHUD, CJI]

1278SUPREME COURT REPORTS

21. We have heard Mr Jaideep Gupta, senior counsel appearingon behalf of the applicant and Mr Ankur Kashyap, counsel appearing onbehalf of the second respondent.

22. The submission which has been urged on behalf of the applicantis that as result of the amendment of Section 29A by Act 33 of 2019,Bthe period of 12 months prescribed for making an award from the dateof the completion of the pleadings has ceased to apply to an internationalcommercial arbitration. Hence, it has been urged that the amendmentbeing of procedural nature, the amended provision would apply to thearbitral proceedings in the present case following the appointment ofJustice S N Variava on 17 January 2018 and pursuant to the arbitratorCentering upon reference on 14 February 2018. Alternatively, the applicanthas urged that in the event that this Court were to hold that the amendedprovisions of Section 29A are inapplicable to the present arbitration, afurther extension of time may be granted to the sole arbitrator to completethe arbitral proceedings.

23. The first respondent has not entered appearance in theseproceedings. The second respondent, who is contesting the proceedingsas guarantor, has urged that the amendment of Section 29A by Act 33of 2019 would not lead to the conclusion that an international commercialarbitration lies outside the purview of the provision. The second respondentEhas submitted that reading the provisions of Section 29A in the mannerin which the applicant seeks to read them would result in situationwhere there would be no timeline under the statute for an internationalcommercial arbitration. Where an international commercial arbitrationis governed by the Rules of an arbitral institution, such rules wouldstructure the conduct of the arbitration. The second respondent hasFsubmitted that it was not the intention of the legislature that in casewhich is not governed by an arbitral institution, the court would have nocontrol over the time taken in the course of the arbitral proceedingsleaving the matter entirely within the discretion of the arbitral forum in asituation such as the present, where the arbitral proceeding is governedGby Indian Law and has seat within the country.24. The provisions of Section 29A, as originally introduced intothe statute, mandated that all awards shall be made within period oftwelve months from the date on which the arbitral tribunal enters uponthe reference. The explanation clarified when the arbitral tribunal wouldHbe deemed to have entered upon the reference, namely, the date on

which the arbitrator has received written notice of the appointment. Themandatory nature of the provisions of Section 29A(1) and their applicationto all arbitrations conducted under the Act, domestic or internationalcommercial, was evident from the use of the word “shall”. In terms ofSection 29A(4), in case the arbitral award was not rendered within thetwelve or eighteen month period as the case may be, the mandate of thearbitrator(s) would stand terminated, unless on an application made byany of the parties, the court extended time on sufficient cause beingshown.

25. After the amendment, Section 29A(1) stipulates that the award“in matters other than international commercial arbitration” shallbe made by the arbitral tribunal within period of twelve months fromthe date of the completion of the pleadings under Section 23(4).[10] Theexpression “in matters other than an international commercialarbitration” makes it abundantly clear that the timeline of twelve monthswhich is stipulated in the substantive part of Section 29A(1), as amended,does not apply to international commercial arbitrations. This is furtherreaffirmed in the proviso to Section 29A(1) which stipulates that theaward in the matter of an international commercial arbitration “may bemade as expeditiously as possible” and that an “endeavour may bemade to dispose of the matter within period of 12 months” fromthe date of the completion of pleadings. The expression “as expeditiouslyas possible” coupled with the expression “endeavour may be made”demonstrate that the intent of Parliament is that the period of twelvemonths for making the award is not mandatory in the case of aninternational commercial arbitration. In an international commercialarbitration, the arbitral tribunal is required to endeavour, that is, make aneffort to render the arbitral award within period of twelve months or ina timely manner. In domestic arbitration, Section 29A(1) stipulates amandatory period of twelve months for the arbitrator to render the arbitralaward. In contrast, the substantive part of Section 29A(1) clarifies thatthe period of twelve months would not be mandatory for an internationalcommercial arbitration. Hence, post amendment, the time limit of twelvemonths as prescribed in Section 29A is applicable to only domesticarbitrations and the twelve-month period is only directory in nature foran international commercial arbitration.

10 Section 23(4) of the Arbitration Act, as inserted by Act 33 of 2019, provides that“The statement of claim and defence under this section shall be completed within aperiod of six months from the date the arbitrator or all the arbitrators, as the case maybe, received notice, in writing of their appointment.”

A26. Sub-section (3) of Section 29A empowers parties, by consent,to extend the period specified in sub-section (1) for making the awardby further period not exceeding six months. Thereafter, if the award isnot made within the period which is specified in sub-section (1) or theextended period specified in sub-section (3), the mandate of the arbitratorshall terminate unless the court has extended the period either prior to orBafter the expiry of the period so specified. In other words, the timeline oftwelve months for making the award (in matters other thaninternational commercial arbitration), is qualified by the consensualentrustment to the parties under sub-section (3) to extend the period bysix months after which the court is empowered in terms of sub-section(4) to extend the period for making the award. The submission of theCsecond respondent is that the provisions of sub-section (3) and sub-section (4) must also apply to an international commercial arbitration.This would merit close scrutiny. The legislature has not expresslyexcluded the applicability of sub-sections (3) and (4) of Section 29A toan international commercial arbitration. But, at the same time, it must beDnoticed that the rationale underlying sub-section (3) is to ensure thatdespite the stipulation of twelve months for the making of an arbitralaward in the domestic context, parties may by consent agree to anextension of time by further period of six months. Such an extension ofsix months is envisaged in the case of domestic arbitration since thereis mandate that the award shall be made within period of twelveEmonths. further extension has, however, been entrusted to the court interms of sub-section (4) of Section 29A. However, insofar as aninternational commercial arbitration is concerned, the statutory regimeis clear by the substantive part of sub-section 1 of Section 29A in termsof which the timeline of twelve months for making an arbitral award isnot applicable to it. In an international commercial arbitration, theFlegislature has only indicated that the award should be made asexpeditiously as possible and that an endeavour may be made to disposeof the matter within period of twelve months from the completion ofpleadings.

27. The introduction of amended Section 29A finds its genesis inGthe report dated 30 July 2017 of the Committee chaired by Justice NSrikrishna. The ‘High Level Committee’, as it is described, was set upto review the “institutionalization of (the) arbitration mechanism” in India.The report specifically elaborates upon the reason for the exclusion ofinternational commercial arbitrations from the ambit of the mandatorytimeline of twelve months stipulated in the context of domestic arbitration.HThe report of the Committee records:

TATA SONS PVT LTD (FORMERLY TATA SONS LTD) v. SIVA INDUSTRIESAND HOLDINGS LTD [DR. DHANAJAYA Y CHANDRACHUD, CJI]

“In fact, one of the provisions of the ACA — section 29A —which was inserted by the 2015 Amendment Act, is perceived tohave made arbitral institutions wary of arbitrations in India. Section29A provides for strict timelines for completion of arbitrationproceedings. This has been criticised as unduly restrictive of theconduct of arbitrations by arbitral institutions which provide fortimelines for different stages of the arbitration proceedings.”

“The Committee notes that international arbitral institutions havestrongly criticised the setting of timelines for conducting internationalcommercial arbitrations. These institutions are of the view thatmonitoring the conduct of the arbitral proceedings is best left tothe arbitral institutions. Institutions have their own machinery forcase management and do not require monitoring by the court.With respect to domestic arbitrations, the general opinion ofarbitrators is that the timelines fixed for conducting domesticarbitrations under section 29A should take effect post completionof pleadings.”

28. The recommendations of the Committee are extracted below:

“1. new sub-section may be inserted in section 29A limitingthe applicability of the section to domestic arbitrations only.International commercial arbitrations may be left outsidethe purview of the timelines provided in Section 29A.

2. Section 29A(1) may be amended such that the time in section29A(1) starts to run post completion of pleadings. Further, timeperiod of 6 months may be provided for submission of pleadings.

3. Section 29A(4) may be amended to provide that if an applicationunder Section 29A(5) is filed before court, the mandate of thearbitral tribunal continues till the application is disposed.

4. Section 29A(9) may be amended to add if the application is notdisposed of within the period mentioned therein, it is deemed to begranted.

5. new sub-section should be inserted in Section 29A providingthat where the court seeks to reduce the fees of the arbitrator(s),sufficient opportunity should be given to such arbitrator(s) to beheard.”

(emphasis supplied)

A29. The Committee indicated that international arbitrationinstitutions had been critical of the setting up of timelines for conductinginternational arbitrations. International arbitral institutions with their ownmachinery for case management were of the view that they did notrequire the monitoring of timelines by the intervention of the court. TheCommittee also noted that in other jurisdictions, timelines for arbitralBproceedings are usually agreed by the parties themselves in accordancewith the nature and complexity of the dispute. The intervention of thecourt in the extension of timelines was criticized by arbitral institutionsand eventually led to the formulation of the amended provisions of Section29A which have expressly kept international commercial arbitrationsCoutside the purview of the mandatory timelines provided in Section 29A.Hence, in terms of the amended provisions of Section 29A, arbitraltribunals in international commercial arbitrations are only expected tomake an endeavor to complete the proceedings within twelve monthsfrom the date of completion of pleadings and are not bound to abide bythe time limit prescribed for domestic arbitrations.D30. Having clarified that the 2019 Amendment Act has excludedinternational commercial arbitrations from the statutorily prescribedmandatory time limits, the question arises whether the amended Section29A would apply prospectively or retrospectively.

E31. The provisions of Section 29A, as introduced by Act 3 of2016, were prospective in nature by virtue of Section 26 of the 2015Amendment Act. In terms of Section 26, Section 29A was introducedwith effect from 23 October 2015 and applied to all arbitrationproceedings that commenced on or after 23 October 2015.Section 26 ofthe 2015 Amendment Act read as follows:F

“26. Nothing contained in this Act shall apply to the arbitralproceedings commenced, in accordance with the provisions ofSection 21 of the principal Act, before the commencement of thisAct unless the parties otherwise agree but this Act shall apply inrelation to arbitral proceedings commenced on or after the dateGof commencement of this Act.”

32. In Board of Control for Cricket in India v. Kochi CricketPvt. Ltd,[11] two Judge Bench of this Court while dealing with theconstruction and applicability of Section 26 of the 2015 Amendment Actin relation to arbitration proceedings and / or legal proceedings inH11 (2018) 6 SCC 287

connection with such arbitration proceedings, inter alia, observed in afootnote that Section 29A was procedural in nature. However, this Courtstated that Section 29A created new obligations in respect of proceedingwhich had already commenced since it laid down strict timeline forrendering an arbitral award for the first time in the framework of theArbitration Act (emphasis supplied). This Court clarified:

“Section 29A of the Amendment Act provides for time limits withinwhich an arbitral award is to be made. In Hitendra Vishnu Thakurv. State of Maharashtra (1994) 4 SCC 602 at 633, this Courtstated:

“(iii) Every litigant has vested right in substantive law but nosuch right exists in procedural law.

(iv) procedural statute should not generally speaking beapplied retrospectively where the result would be to createnew disabilities or obligations or to impose new duties in respectof transactions already accomplished.

(v) statute which not only changes the procedure but alsocreates new rights and liabilities shall be construed to beprospective in operation, unless otherwise provided, eitherexpressly or by necessary implication.”

It is, inter alia, because timelines for the making of an arbitralaward have been laid down for the first time in Section 29A of the

Amendment Act that parties were given the option to adopt suchtimelines which, though procedural in nature, create new obligationsin respect of proceeding already begun under the unamendedAct. This is, of course, only one example of why parties mayotherwise agree and apply the new procedure laid down by theAmendment Act to arbitral proceedings that have commencedbefore it came into force.”

33. Procedural law establishes mechanism for determining rightsand liabilities of party and machinery for enforcing them.[12] Generally,procedural laws are presumed to be retrospective, unless there is clearindication that such was not the intention of the legislature,[13] or the

12 Thirumalai Chemicals Ltd v. Union of India (2011) 6 SCC 739

13 Jose Da Costa and Anr. v. Bascora Sadasiva Sinai Narcornim, (1976) 2 SCC 917;Gurbachan Singh v. Satpal Singh (1990) 1 SCC 445; Rajendra Kumar v. Kalyan (D)by Lrs, (2000) 8 SCC 99

Aprocedural law imposes new obligations qua transactions alreadyconcluded or creates new rights or liabilities.[14]

34. The 2019 Amendment Act does not contain any provisionequivalent to Section 26 of Act 3 of 2016 evincing legislative intentmaking the application of the amended provision prospective. TheBamended provisions of Section 29A, in terms of which the arbitral tribunalhas to endeavourto dispose of the proceedings in an internationalcommercial arbitration as expeditiously as possible within period oftwelve months from the completion of the pleadings are remedial innature. The amended provision has excepted international commercialarbitrations from the mandate of the twelve-month timeline which governsCdomestic arbitrations. The amendment is intended to meet the criticismover the timeline in its application to international commercial arbitrations.The amendment is remedial in that it carves out international commercialarbitrations from the rigour of the timeline of six months. This lies withinthe domain of the arbitrator and is outside the purview of judicialDintervention. The removal of the mandatory time limit for making anarbitral award in the case of an international commercial arbitration doesnot confer any rights or liabilities on any party. Since Section 29A(1), asamended, is remedial in nature, it should be applicable to all pendingarbitral proceedings as on the effective date i.e., 30 August 2019.

E35. We may notice certain judgments of the High Courts on theprovisions of Section 29A which have been adverted to during the courseof oral submissions. Those decisions are:

i.A decision of Single Judge of the High Court of Delhidated 23 January 2020 in Shapoorji Pallonji & Co. Pvt.FLtd. Vs Jindal India Thermal Power Ltd.;[15]

ii.A decision of Single Judge of the Delhi High Court dated21 July 2020 in ONGC Petro Additions Ltd. vs FernsConstruction Co. Inc.;[16] and

iii.The decision of the Chief Justice of the High Court ofGJudicature for Orissa at Cuttack dated 11 December 2020in M/s SARA International Pvt. Ltd. Vs Southern EasternRailways & Anr.[17]

14 Hitendra Vishnu Thakur v. State of Maharashtra, (1994) 4 SCC 602

15 OMP (Misc) (Comm.) No 512/2019

16 OMP (Misc) (Comm) 256/2019H17 ARBP No. 28 of 2020

TATA SONS PVT LTD (FORMERLY TATA SONS LTD) v. SIVA INDUSTRIESAND HOLDINGS LTD [DR. DHANAJAYA Y CHANDRACHUD, CJI]

36. In Shapoorji Pallonji, the Delhi High Court had held thatamended Section 29A(1) of the Arbitration and Conciliation Act, beingprocedural law, would apply to the pending arbitrations as on the date ofthe amendment. However, coordinate bench in MBL InfrastructuresLtd v. Rites Ltd.[18 ]held that the amended Section 29A would beprospective in nature, without referring to the earlier order in ShapoorjiPallonji. Finally, the Delhi High Court in ONGC Petro Additions settledthe controversy and reiterated the position of law as laid down in ShapoorjiPallonji. The Court, inter alia, stated that Section 29A(1) shall beapplicable to all pending arbitrations seated in India as on August 30,2019 and commenced after October 23, 2015, and there is no strict timeline prescribed to the proceedings which are in nature of internationalcommercial arbitration as defined under the Act, seated in India.

37. Consistent with the amended provisions of Section 29A, thesole arbitrator in the present case would be acting within his domain andjurisdiction to decide upon any further extension of time beyond what isoriginally stipulated at the meeting which was held on 21 March 2018.The sole arbitrator may issue appropriate procedural directions forextension of time while at the same time endeavoring an expeditiousconclusion of the arbitration.

38. The Miscellaneous Application and the InterlocutoryApplication shall accordingly stand allowed in the above terms.

39. Pending applications, if any, stand disposed of.

Nidhi Jain(Assisted by : Rakhi, LCRA)

Applications allowed.

18 OMP (Misc) (Comm) 56/2020, as decided on 10 February 2020