The Madras High Court clarifies that an award passed after the mandate of the arbitrator has expired cannot be subsequently ratified by the Court

Brief Facts

Suryadev Alloys & Power Pvt. Ltd. (“Suryadev”) and Shri Govindaraja Textiles Pvt. Ltd. (“Govindaraja”) entered into a power purchase agreement. Disputes arose between the parties when Govindaraja failed to clear certain invoices of Suryadev, resulting in Suryadev invoking the bank guarantees held by it. However, even after invoking the bank guarantees, there was a balance amount due, which led to Suryadev invoking arbitration. Govindaraja contended that Suryadev had not allotted power as per the contracted demand of energy and by September 2015, it had completely stopped the power supply. Govindaraja filed a counter claim for the losses incurred in purchasing power from TANGEDCO. The arbitrator entered reference on 20 March 2017.

During the arbitration proceedings, the time period for making an award was about to expire. Suryadev therefore filed an application under Section 29A of the Arbitration and Conciliation Act, 1996 (“Act”) seeking an extension of time (“Application”). By its order dated 4 September 2018, the Application was allowed and the time period for making the award was extended by six months from the date of receipt of the order. Thereafter, the parties concluded their arguments on 9 February 2019 and the award was reserved.

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