COVID-19 limitation exclusion applies to Section 29A; participation after mandate expiry waives jurisdictional objections.

The dispute arose from a 2014 works contract for the construction of dwelling units in Jodhpur

Although the work was completed on 10.03.2017, disputes emerged regarding delayed payments of the final bill and Running Account Receipts (RARs)

An Arbitrator was appointed on 15.09.2020, and pleadings were allegedly completed on 24.05.2021

On 10.04.2023, the Petitioner (UOI) filed an application under Section 29A of the Arbitration and Conciliation Act, 1996 ("A&C Act"), asserting that the Tribunal’s mandate had expired on 24.05.2022

Despite this objection, the Petitioner continued to participate in merit-based arguments through May 2023

The Arbitrator pronounced the Award on 27.08.2023, granting the Respondent approximately ₹6 crores plus 12% interest

The Petitioner challenged the Award under Section 34, primarily on the grounds of expired mandate and excessive interest

1. Whether the mandate of the Sole Arbitrator had terminated under Section 29A of the A&C Act prior to the pronouncement of the Award on 27.08.2023

2. Whether the Arbitral Tribunal’s grant of interest at the rate of 12% per annum was patently illegal or contrary to the contract

The Court applied Section 29A of the A&C Act, which prescribes a 12-month limit for awards (extendable by 6 months by consent) from the completion of pleadings

It relied on the Supreme Court’s directions in Suo Motu Writ Petition (C) No. 3 of 2020, which excluded the period from 15.03.2020 to 28.02.2022 from limitation periods due to COVID-19

Regarding the nature of the mandate, the Court applied Rohan Builders (India) Pvt Ltd v. Berger Paints India Limited, holding that termination under Section 29A is not absolute and is subject to the Court’s power to extend

On the issue of interest, the Court applied Section 31(7) of the A&C Act, which grants arbitrators wide discretion to award interest unless otherwise agreed by parties

The scope of judicial intervention was governed by Section 34, as interpreted in OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd., limiting interference to cases of patent illegality or conflict with public policy

The Court rejected the jurisdictional challenge, noting that when the COVID-19 exclusion period (ending 28.02.2022) is applied, the cumulative 18-month period (12 months under Section 29A(1) plus 6 months under 29A(3)) extended until 31.08.2023

Thus, the Award dated 27.08.2023 was within the permissible timeframe

Furthermore, the Court observed that the Petitioner’s active participation in hearings throughout April and May 2023, coupled with its post-award application for correction under Section 33, constituted an implied waiver of the objection and acceptance of the Tribunal’s jurisdiction

Regarding interest, the Court found that the Arbitrator provided a reasoned basis for the 12% rate, identifying it as compensatory for the Respondent's deprivation of funds

Following Sri Lakshmi Hotel Pvt. Ltd. v. Sriram City Union Finance Ltd., the Court held that the rate of interest is a matter of arbitral discretion and does not warrant interference unless it "shocks the conscience," which was not the case here

It held that the statutory timeline must be reckoned from the expiry of the COVID-19 exclusion period and that a party cannot "approbate and reprobate" by participating in proceedings and then challenging the mandate after an unfavorable outcome

The Court further allowed the Respondent's application (I.A. 43484/2024) to withdraw the ₹3,44,13,536/- deposited by the Petitioner, subject to a corporate guarantee