A succeeding arbitrator lacks jurisdiction after the award period expires without court extension.

On 18.09.1984, the Union of India placed an order with the appellant for 48,310 boxes.

After a dispute concerning non-supply of the first instalment, the matter was referred to arbitration.

The first arbitrator recorded that the time to make the award had expired and adjourned the proceedings sine die, leaving the respondent to seek an extension from a competent court.

Without obtaining a court extension, the respondent appointed a new arbitrator, who rejected the appellant’s jurisdictional objection and made an award for Rs.4,64,552 on 24.08.1992.

The ADJ dismissed the appellant’s objections under Sections 16, 30 and 33 of the Arbitration Act, 1940, and made the award a rule of the court.

The appellant challenged that decision under Section 39 of the Act.

Whether, after the first arbitrator’s time to make the award had expired and the proceedings had been adjourned sine die, a succeeding arbitrator could proceed and make an award without a court order extending time under Section 28 of the Arbitration Act, 1940.

Whether the appellant was precluded from raising that jurisdictional objection because it had not separately challenged the succeeding arbitrator’s order rejecting the objection.

Rule 3 of the First Schedule to the Arbitration Act, 1940 provides the applicable period for making an award.

Under Section 28, the power to enlarge that period rests with the court; an arbitrator cannot extend the time, subject to the statutory qualification concerning the parties’ agreement identified in Hari Krishna Wattal v. Vaikunth Nath Pandya [(1973) 2 SCC 510].

In Hari Shanker Lal v. Shambhu Nath [AIR 1962 SC 78], the Supreme Court held that, once the applicable period expires, arbitrators become functus officio unless the court extends time.

Applying these principles, the Delhi High Court in Union of India v. Woodspot [2009 SCC OnLine Del 3059] and Union of India v. Peeco Hydraulic (P) Ltd. [2012 SCC OnLine Del 2495] held that, absent a lawful extension, a succeeding arbitrator cannot continue the reference and an award made by that arbitrator is vitiated.

The first arbitrator expressly recorded that the time to make the award had expired and adjourned the proceedings sine die, directing the respondent to obtain a court extension.

The respondent obtained no such extension and instead appointed a succeeding arbitrator; nor was there an agreement between the parties extending time in accordance with law.

Applying Section 28 and the cited authorities, the Court held that the succeeding arbitrator lacked jurisdiction to continue the reference.

The appellant’s failure to separately challenge the arbitrator’s order rejecting its objection did not bar the jurisdictional challenge to the award, which was subsequently raised in objections under Sections 16, 30 and 33.

It allowed the appeal and set aside both the ADJ’s judgment and decree dated 19.12.2007 and the arbitral award dated 24.08.1992.