Dispute Over Extension of the Arbitrator’s Mandate
In South Bihar Power Distribution Company Ltd. v. India Power Corporation Ltd. & Anr., the Supreme Court of India clarified the distinction between the power to appoint an arbitrator under Section 11 and the power to extend the arbitrator’s mandate under Section 29A of the Arbitration and Conciliation Act, 1996. The Court held that a High Court does not acquire jurisdiction to extend the mandate merely because it appointed the arbitrator.
The judgment was delivered on 28 October 2026 by a Bench comprising Justice Ujjal Bhuyan and Justice Atul S. Chandurkar.
Background of the Dispute
The dispute arose from a Distribution Franchisee Agreement dated 31 December 2013 involving South Bihar Power Distribution Company Ltd., India Power Corporation Ltd. and India Power Corporation (Bodhgaya) Ltd., which was subsequently renamed Vikriti Power Ltd.
The agreement contemplated a three-member arbitral tribunal for resolving disputes. However, with the consent of the parties, the Patna High Court appointed a sole arbitrator in April 2018 under Section 11 of the Arbitration and Conciliation Act, 1996.
When the first arbitrator became unable to continue, the High Court appointed Justice Dipak Misra, a former Chief Justice of India, as the replacement arbitrator on 10 March 2021, again with the parties’ consent.
The proceedings continued before the replacement arbitrator but could not be completed within the prescribed period. Although the parties agreed to an additional six months as permitted under the Act, the arbitration remained unfinished.
The respondents consequently approached the Patna High Court seeking a further extension of time to complete the proceedings.
Patna High Court’s Decision
On 15 September 2023, the Patna High Court extended the arbitrator’s mandate by four months. It also rejected South Bihar Power Distribution Company’s request to constitute a three-member arbitral tribunal instead of continuing with the sole arbitrator.
The High Court held that the company had waived its objection to the sole arbitrator by consenting to the appointment and participating in the proceedings. It also rejected the objection concerning the special purpose vehicle’s ability to pursue arbitration while undergoing corporate insolvency resolution proceedings.
On the question of jurisdiction, the High Court concluded that it could extend the arbitrator’s mandate under Section 29A because it had originally appointed the arbitrator under Section 11.
South Bihar Power Distribution Company challenged the decision before the Supreme Court.
Issues Considered by the Supreme Court
The Supreme Court considered three principal questions:
Whether the appellant had waived its contractual right to have disputes decided by a three-member arbitral tribunal by consenting to and participating in proceedings before a sole arbitrator.
Whether the corporate insolvency resolution process and the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, prevented the special purpose vehicle from pursuing its arbitration claim.
Whether a High Court could extend an arbitrator’s mandate under Section 29A merely because the arbitrator had been appointed by that High Court under Section 11.
Appointment of an Arbitrator and Extension of Mandate Are Distinct Powers
The Supreme Court explained that Section 11 and Section 29A serve different purposes under the Arbitration and Conciliation Act, 1996.
Section 11 deals with the appointment of arbitrators when the parties fail to follow the agreed appointment procedure. Section 29A, on the other hand, governs the time limit for making an arbitral award and the extension of the arbitrator’s mandate when the statutory period expires.
The Court emphasised that the authority to appoint an arbitrator does not automatically confer jurisdiction to extend the arbitrator’s mandate. The jurisdiction for an application under Section 29A must be determined by the statutory definition of “Court” under Section 2(1)(e) of the Act.
For domestic arbitration, this generally means the principal civil court of original jurisdiction in the district having the requisite jurisdiction. The definition also includes a High Court exercising ordinary original civil jurisdiction where applicable.
The Supreme Court clarified that the High Court’s role under Section 11 does not alter this definition. The appointment provisions cannot be interpreted as conferring an additional power to extend the mandate when the statute assigns that function to the court defined under Section 2(1)(e).
Relevant Extract from the Judgment
Supreme Court of India, South Bihar Power Distribution Company Ltd. v. India Power Corporation Ltd. & Anr., paragraph 43:
“Based on our above discussion and analysis, we hold that the view taken by the High Court in so far the third question is concerned i.e. the Chief Justice of the High Court or his designate empowered under Section 11 of the 1996 Act can grant extension of time under Section 29A(4) is clearly unsustainable in law.
The conclusion reached by the High Court that the jurisdiction to extend the period of time has to be exercised by the High Court under Section 29A of the 1996 Act is not correct and is accordingly set aside.”
The extract establishes the central principle of the decision: the power to appoint an arbitrator under Section 11 and the power to extend the arbitrator’s mandate under Section 29A are separate statutory functions. The former does not, by itself, confer the latter.
Objection to the Sole Arbitrator Was Held to Be Waived
Although the Supreme Court rejected the High Court’s reasoning on jurisdiction to extend the mandate, it upheld the findings concerning the composition of the arbitral tribunal.
The appellant argued that the agreement expressly required a three-member tribunal and that the appointment of a sole arbitrator was inconsistent with the contractual arrangement.
The Supreme Court noted, however, that the appellant had consented to the appointment of the sole arbitrator, participated in the arbitration, filed counterclaims and supplementary counterclaims, and agreed to an extension of the arbitration period.
The Court held that this conduct amounted to acquiescence and waiver of the right to object to the composition of the tribunal within the prescribed period.
It further observed that a party cannot continue participating in arbitral proceedings without raising a timely objection and subsequently challenge the tribunal’s composition when an extension of time is sought.
Accordingly, the Supreme Court upheld the High Court’s finding that the appellant had waived its objection to the sole arbitrator.
Insolvency Moratorium Does Not Prevent a Corporate Debtor from Pursuing Its Own Claim
The appellant also questioned the special purpose vehicle’s ability to continue arbitration while undergoing corporate insolvency resolution proceedings.
The Supreme Court upheld the High Court’s conclusion that the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, does not necessarily prevent a corporate debtor from initiating proceedings to recover amounts due to it.
The Court distinguished between proceedings seeking recovery of debts from a corporate debtor and proceedings initiated by the corporate debtor to recover its own dues.
The purpose of the moratorium is to protect the corporate debtor from recovery action that could adversely affect the insolvency resolution process. A claim pursued by the corporate debtor, including an arbitration claim, is not automatically barred merely because insolvency proceedings are pending.
The Court therefore declined to interfere with the High Court’s conclusion on this issue.
District Commercial Court Had Already Extended the Mandate
During the pendency of the proceedings before the Supreme Court, the respondents approached the Principal District Judge-cum-Commercial Court, Patna, seeking a further extension under Section 29A.
On 23 March 2026, the District Commercial Court granted an additional six months for completion of the arbitration.
Consequently, although the Supreme Court set aside the High Court’s finding that it could extend the mandate merely because it had appointed the arbitrator, the jurisdictional correction did not materially affect the extension already granted by the competent court.
The Supreme Court accordingly lifted the restriction previously imposed on the arbitrator from delivering the award and directed that the arbitral proceedings be completed within six weeks.
Final Decision
The Supreme Court upheld the Patna High Court’s findings concerning the waiver of the objection to the sole arbitrator and the corporate debtor’s ability to pursue its arbitration claim despite the insolvency proceedings.
However, it set aside the High Court’s decision on the third issue, holding that the High Court could not extend the arbitrator’s mandate under Section 29A(4) merely because it had appointed the arbitrator under Section 11.
The Court directed the arbitrator to conclude the proceedings and deliver the award within six weeks. Both civil appeals were dismissed, and no order as to costs was made.
The judgment reinforces the principle that jurisdiction under the Arbitration and Conciliation Act, 1996, must be exercised in accordance with the specific statutory provisions governing each stage of arbitration. The authority to appoint an arbitrator and the authority to extend the arbitrator’s mandate cannot be treated as interchangeable powers.
