Delhi HC Clarifies the Ambit of Section 29A of the Arbitration & Conciliation Act

Delhi HC clarifies the Ambit of Section 29A of the Arbitration & Conciliation Act

July 25, 2020, Saturday

Bhumi Agrawal

The Delhi HC in a recent judgment clarifies the ambit of Section 29A of the Arbitration and Conciliation (Amendment) Act,2019, and International Commercial Arbitration is kept outside the ambit of this section. 

The Delhi HC Hon'ble Mr Justice V. Kameswar Rao in the case of ONGC Petro Additions Limited V. Ferns Construction Co. Inc[1] has clarified that section 29A introduced through Arbitration and Conciliation (Amendment) Act, 2019 which strictly provides for the time limit for completion of Arbitral proceedings will apply retrospectively to all the domestic arbitration initiated after 23rd October 2015.

It further clarified that the same section would not apply to International Commercial Arbitration proceedings initiated after 23rd October 2015 and the parties involved in ICA need not have to approach the court to seek an extension for the time limit. 

In the present case, one of the parties was a foreign party and therefore the arbitral tribunal was considered to be international commercial tribunal and thus, the court held that section 29A will not apply. 

The court went further to discuss the previous judgments passed by courts relating to the applicability of section 29A.

The court in the case of MBL Infrastructures Ltd. v. Rites Ltd[2] passed the judgment inadvertently with respect to section 29A being prospective in nature. The Court further held that the Delhi HC in the case Shapoorji Pallonji and Co. Pvt. Ltd v Jindal India Thermal Power Limited[3] was correct in holding that Section 29A is a procedural law and therefore must have to be retrospective in nature and therefore, this court must rely on the ruling of the Court. 

[1] OMP(MISC) (COMM) 256/2019, I.A. 4989/2020

[2] O. M. P. (MISC.) (COMM.) 56/2020

[3] O.M.P.(MISC.) (COMM.) 512/2019

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