The Arbitration and Conciliation Act of 1996 [“1996 Act”] despite its strong promises, faced various challenges leading to excessive interventions by the judiciary and Frivolous appeals which led to even longer delays — the very lacunae this Act was meant 1o combat. In response, the amendments in 2015 and again in 2019 brought in a host of changes. The key amendments introduced time limits for arbitration proceedings, found under Section 23(4) and Section 294 of the Act. Section 23(4) imposes a six-month limit for pleadings and Section 294 imposes a twelve-month limit for passing arbitral awards after the completion of pleadings. However, these provisions have led to interpretive differences among high courts. The Delhi High Court ruled that these time limits were mandatory, whereas the Calcutta High Court ruled them to be directory reasoning that there is an absence of any explicit consequences for non-compliance with these time limits. This paper argues that the Calcutta High Court erred in its ruling, as the intent behind the insertion is to curtail excessive delays and the intention of the legislature ought to be given weight. By a harmonious interpretation of Sections 23, 25 and 29A, it can be construed that Section 23(4) is mandatory in nature.
ARBITRATION TIMELINES IN FLUX: INTERPRETING THE INTENT OF SECTION 23(4)
Anirudh Sundar
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