ALLAHABAD HC EXTENDS TIME FOR ARBITRAL PROCEEDINGS5 min read

By: Akanksh Deekonda

BACKGROUND:




The 1996 Arbitration and Conciliation Act is a law that governs domestic arbitration in India. It was revised in 2015 and, on 1 August 2019, a further amendment passed in Lok-Sabha.

Through introducing the Arbitration and Conciliation (Amendment) Bill, 2015 in Parliament, the Government of India agreed to amend the Arbitration and Conciliation Act, 1996. In an attempt to make arbitration a preferred mode of settlement of commercial disputes and making India a hub of international commercial arbitration, the President of India on 23 October 2015 promulgated an Ordinance (Arbitration and Conciliation (Amendment) Ordinance, 2015) amending the Arbitration and Conciliation Act, 1996. The Prime Minister’s chair of the Union Cabinet gave its approval for amendments to the Arbitration and Conciliation Bill, 2015.

CURRENT SCENARIO:

The year 2020 has been facing a severe crisis with the outbreak of the corona pandemic. The entire world including the developed countries like the US-facing severe crises. The WHO has recommended all countries to promote Social Distancing and make tests for corona, put the positive patients in quarantine to prevent the disease. To wage a war against such a heavy pandemic, many countries have decided to initiate a National Wide Lockdown. India has followed similar measures by Initiating a 21-lockdown starting from the 25th of March, 2020. However, a further lockdown has yet to be announced, all the fields have started searching for alternative methods to fight the combat of such pandemic. 

QUESTION OF LAW(Allahabad HC extends time)

What would be the eventualities that to be taken in Arbitration matters which were pending sue moto to COVID-19?

The question was answered by a Division Bench Comprising Justice Siddhartha Varma and Chief Justice Govind Mathur on the 5th of April, 2020 in matter the matter as suo-moto. 

This Allahabad High Court with after the combat of National Wide Lockdown decided to extend the time for Arbitration Matters under Section 29 A of the “Arbitration And Conciliation Act, 1996”. The period decided was 12 months and an exception was given to matters of International Commercial Arbitration.

The court in the matter held that India currently is facing an Extra-ordinary circumstance. It is viable and necessary to extend the period to a further of twelve months in the matters of Arbitration and conciliation as per provisions of Section 29A of the Arbitration and Conciliation Act, 1996 the requirement of which would be mandatory. This award in the matter which would be other than international commercial arbitration shall be made within twelve months under sub-section (4) of Section 23 from the date of completion of pleadings. 

It is also directed if any arbitral proceedings have been concluded under section 23 (4) of the Act and if the twelve-month duration has expired or is due to expire on or after March 25, 2020, then the same stands have been extended until May 25, 2020.

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Due to the non-availability of protection, several bail orders had not been enforced, the High Court noted this. Thus, considering the “impediments” in securities arrangement due to lockdown, the bench temporarily waived the production of securities by persons granted bail on or after March 15 and ordered that they are released upon personal bond furnishing. 

Finally, the court held that the impediments to the lockdown of security while invoking powers under Articles 226 and 227 of the Indian Constitution, we find it necessary to order all accused applicants whose bail applications were issued on or after 15 March 2020. This has also been said with a condition that the non-availability of protection as a consequence of lockdown can be released on personal bond execution as ordered by the Court or to the satisfaction of prison authorities where the accused is incarcerated, given that the accused claimant undertakes to provide the necessary security within one month from the date of the actual release of the accused.

CONCLUSION(Allahabad HC extends time):

The entire world has been fighting against the rapid Corona- Outbreak. To deal with Corona, many initiatives have been taken up. And also to deal with the time Post Corona. The example would be a common man. Like providing adequate food, shelter, cloth, medical protection and sanitation measures by the government. The large-scale industries, today would deal with the matter as “Force-Majeure” by frustrating all the existing contracts which were available. However, such implications are taking place in every field gradually.  

The Allahabad High court on 5th April 2020 has taken a similar effort. The Allahabad HC extends the time for arbitral proceedings. Despite facing the problems regarding the pending Arbitrations and Conciliations. Under the Indian Arbitration and conciliation act after the Lockdown would become burdensome. To escape such situations, the Government has taken an initiative to use the Existing provisions. Such as 29 A of the Act and extended the period for more 12 months as it an extraordinary circumstance. This could be a better initiative that the court could take in the present situation.

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