Abstract – This paper explores the ambiguity surrounding the term ‘completion of pleadings’ in Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, which often leads to confusion in calculating limitation periods. Drawing on the UK’s legal framework the authors propose practical reforms that India could use to strengthen procedural clarity in arbitration proceedings.

Introduction

Treading on the path of the law and traversing its nitty gritty in a concomitant hope for the deliverance of substantive justice is how laymen view the legal system. The same is also infamous for those procedural intricacies; infamous for the processes and procedures that constitute the ‘due process of law’ and ‘procedure established by law.’ Seen as a pestiferous obstruction to justice rather than a gateway to it, procedural law has been disparaged for its incessant red-tapism that hinders the accessibility of the common populace to law and justice. Even in today’s day and age, it is starkly clear that these allegations are not without merit.

Existing procedural inaccuracies, ambiguities, and underdeveloped interpretative jurisprudence are to blame for the aforesaid allegations, and present-day arbitration law in India is riddled with them. The authors will focus on one such lack of procedural law in the subsisting arbitration law in India today, i.e., the need for a definitive understanding of the phrase ‘completion of pleadings’ with respect to S. 23(4) and S. 29A of the Arbitration and Conciliation Act, 1996 (hereinafter ‘the Act’) and the resultant obstruction of justice by problematic and uncertain computation of limitation periods for arbitral awards. To do so, the authors will analyse the prevailing legal framework in the United Kingdom to recommend steps India can implement in taking a leaf from foreign jurisprudence.

The Dubiety Surrounding Completion Of Pleadings

As succinctly put by the Supreme Court, “The procedural law is intended to facilitate, not to obstruct, the course of substantive justice”. In the pursuit of equity, good conscience, and justice, it is imperative that procedural law is revisited to have its gaps filled by the Courts. However, that has not been the case for the phrase ‘completion of proceedings’ in arbitration law.

S. 29A of the Act was inserted in the legislation by the 2019 Amendment, which draws inspiration from the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration (hereinafter ‘UNCITRAL Model Law’). The amendment was introduced aiming for the facilitation of regulated fast-track arbitration in India. In the hopes that introducing such mechanisms in Indian arbitral proceedings would help with faster and more efficient completion of proceedings, and lighten the burden of courts and tribunals with respect to the ever-growing pile of pending cases, 29A was amended in furtherance of the goals envisioned by the 2015 amendment. The provision sets a mandatory limitation period for the rendering of the arbitral award within 12 months of completion of pleadings. For the completion of pleadings, which are to be completed within 6 months of the institution and reference of the arbitral tribunal, the provision refers to its definition and ambit per S. 23(4) of the Act. It is worth noting that S. 23(4) explicitly provides that statements of claim and defence shall be completed within a period of six months from the date the arbitrator or all the arbitrators received notice in writing of their appointment.[1]

There is no mention of rejoinders for counterclaims and defences, or of amendments to the pleadings, which is a blatant violation of audi alteram partem, the principles of natural justice. The only mention of the amendments in the provisions relates to the principle of their permissibility by the arbitral tribunal contingent on the stage of proceedings they are filed at, and the Act nowhere specifies the exact date that would constitute as completion of pleadings.  Whether it would include any amendments to the pleadings or would be constituted when the statement of defence is submitted to the learned tribunal.

Though the Act indirectly answers the question with respect to counterclaims and defence to counterclaims by way of S. 2(9), by making every provision applicable to claim and defence to claim as applicable to counterclaims and defence to counterclaims, the same cannot be said for the amendment of pleadings.

The issue, however, was recently raised by the respondents in Harkirat Singh Sodhi v. Oram Foods Pvt. Ltd. And others before the Delhi High Court.  The respondents in the case argued that the date of completion of pleadings, per an interpretative reading of S. 23(4) and S. 29A of the Act, refers only to the filing of statements of claim and defence, and not, to any additional rejoinders for counters or additional applications for amendments. The counsel, in furtherance of this asseveration, relied on the Supreme Court rulings in Hitendra Vishnu Thakur v. State of Maharashtra and BCCI v. Kochi Cricket Pvt. Ltd to assert a consistent and contemplative reading of the prospective amendment as a whole.

In spite of the respondents’ attempts to draw the Court’s attention to the vitality of this procedural matter, the Court did not delve into the merits and failed to provide a definitive answer for the contemplation of ‘completion of pleadings’, thus missing the opportunity to steer the discourse on the said subject matter.

An Attempt At Finding Answers Through The Code of Civil Procedure

Since the bare text of the Arbitration and Conciliation Act and existing precedent fail to elucidate the matter, it may prove useful to turn to analogous rules and legislation, both Indian and foreign, in the bid to answer the question of completion of pleadings. The Bombay High Court iterated in Dinesh Shah v. Grace Realty, “While it is true that strict rules of evidence and procedure may not apply to arbitration, this does not mean that all analogous principles have to be completely ignored or set to one side”.

Therefore, while it is manifest from S. 19 of the Act that the Arbitral Tribunal is not bound by the Code of Civil Procedure, 1908 (hereinafter ‘CPC’), its analogous rules for civil proceedings might be constructive in providing an answer to the question at hand. Under the CPC, although Order VIII Rule 9 permits the parties to file a subsequent pleading with the leave of the Court, pleadings are generally deemed to be completed when the defendant files its written statement. Thitherto, if we draw a parallel of the same to the Act, pleadings should be deemed to be completed with the filing of the statement of defence, and must not include any amendments to the pleadings. Counters to the former, though, can be included by virtue of S. 2(9) of the Act.

If there is an analogous application of said rules in arbitration proceedings, the same would imply an exclusion of amendment to pleadings for the purposes of S. 29A, which, the authors argue, would be in direct and flagrant contravention of the principles of natural justice. Excluding amendments from the ambit of completion of pleadings, be it for the purposes of Section 29A or otherwise, would be restricting parties’ right to be heard and to present their side of the legal pleadings, in violation of the principle of ‘audi alteram partem’. If the entirety of the parties’ pleadings is not taken into consideration, it prima facie violates their natural legal right to be heard, enshrined within Art. 14 and Art. 21 of the Constitution which stipulates the right to a free and fair trial.

Further, in arguendo, even if the arbitrator includes into his consideration for rendering the award, the arguments put forward in amended pleadings, computing the limitation period from the date of the filing of the statement of defence would be severely impracticable. Therefore, the authors suggest that a more logical and beneficial interpretation of the procedural law here would be to include such amendments in the completion of pleadings, and compute the limitation period for the rendering of the award accordingly.

Suggestions to Fill the Lacuna – The Way Forward

After having conducted a thorough examination and analysis of the subject matter, the need for definitive legal framework that clearly demarcates the inclusion of amendments to pleadings under the completion of pleadings for the purposes of Section 29A is indubitably clear. There is a dire need for the Courts to give specific directives that can constitute a precedent to govern the subject matter.

In light of the above endeavour into the nitty-gritty of procedural arbitration law, the authors asseverate for the inclusion of amendments in the constitution of completion of proceedings for the purposes of computation of limitation period under S. 29A. The same would, firstly, streamline the procedure in a more practicable sense for the date of computation of the limitation period would align with the entirety of arguments submitted as well as considered by the arbitrator, as highlighted above. Secondly, it would also be in furtherance of the principles of natural justice. It would further ensure the rendering of a more efficacious, agreeable, and illustrative award by the tribunal by taking into consideration the entirety of the pleadings by both parties involved.

Conclusion

The primary fear in such instances, that of frivolous amendments filed merely for the facilitation of furthering the limitation period and causing delay in the ultimate rendering of the award, is well-founded. To allay these fears, the authors advocate for a more comprehensive amendment of S. 23(4) of the Act that lists more precise limitations and conditions on the filing and acceptance of applications for amendments. Currently, the provision only stipulates an undefined duration of limitation which is left to the discretion of the arbitral tribunal.

To recapitulate, an attempt has been made to highlight the prominent procedural lags in the emerging present-day arbitration law in India. Of which, the question of completion of proceedings vis-à-vis amendments and their resultant impact on the computation of the limitation period for the rendering of the arbitral award has been primarily probed into. After having expounded on the problem at hand in descriptive detail, it has been discovered how there is yet no definitive law delving into the subject matter, despite the issue having been raised before a High Court recently. Due to the same, by relying on precedent, the gap has been inspected through the lens of analogous rules of procedures provided in the CPC. However, an investigation into the modus operandi under the CPC reveals that a parallel application would, firstly, be impractical due to the difference in the nature of proceedings in the two cases and secondly, would imply the non-inclusion of amendment of pleadings. The implicated non-inclusion of amendment stems from the general rule in CPC that pleadings are generally deemed to be completed when the defendant files its written statement. Such a non-inclusion, as has been argued in the previous section of the article, would be in grave contravention of the natural justice principle of audi alteram partem. Thitherto, a practicable solution cannot be arrived at by taking analogous inspiration from the procedural civil law of the land, the CPC, and therein arises the need to examine foreign jurisprudence on the issue.

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[1] Justice S.M. Jhunjhunwala, Law of Arbitration and Conciliation, (9^th edn, Snow White Publications Pvt Ltd 2022)

The blog post has been written by Richa Maria and Jahnvi Thanvi, who are undergraduate students at the Rajiv Gandhi National University of Law, Punjab (RGNUL).