Bombay High Court
SAP India Private LimitedversusCOX AND KINGS LIMITED
- Decided
- Disposal
- DISPOSED OFF
Holding
The petition is allowed and the mandate of the Justice Lokur Tribunal is extended by one year.
Summary
SAP India Private Ltd. sought an extension of the mandate of the Justice Lokur Arbitral Tribunal, which had been adjourned sine die after the respondent was admitted to corporate insolvency proceedings. The respondent argued that the tribunal was functus officio and that the petitioner had not shown sufficient cause under Section 29A(5) of the Arbitration and Conciliation Act, 1996. The petitioner contended that the delay was caused by the statutory moratorium, the parallel arbitration before the Justice Shah Tribunal, and its diligent attempts to raise jurisdictional objections. The Court examined the legislative intent of Section 29A, the effect of the insolvency moratorium, and prior Supreme Court precedents on extensions of arbitral time‑limits. It held that the petitioner had established sufficient cause and that the tribunal could be revived despite the lapse. Accordingly, the petition was allowed and the tribunal’s time‑limit for rendering an award was extended by one year.
Issues considered
- Whether the petitioner has demonstrated sufficient cause under Section 29A(5) of the Arbitration and Conciliation Act, 1996 to extend the mandate of the arbitral tribunal.
- Whether the Justice Lokur Tribunal is functus officio and can be revived after adjournment sine die.
- The effect of the parallel arbitration before the Justice Shah Tribunal on the continuation of the original arbitration.
- The impact of the Corporate Insolvency Resolution Process and liquidation on the arbitral proceedings and enforceability of any award.
- Whether an extension of time is permissible despite the expiry of the original mandate.
Legislation cited
- Arbitration and Conciliation Act, 1996 — s. 11, 16, 29A(5), 32
- Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 — s. 29
- Insolvency and Bankruptcy Code, 2016 — s. 14, 33
Subjects
- Arbitration
- Section 29A
- Extension of time
- Functus officio
- Insolvency
- Corporate liquidation
- Parallel arbitration
- Jurisdiction
- Moratorium
- Set‑off
Judgment
4-CARBP-865-2026
Digitally
signed by
MOHAMMAD
MOHAMMAD AREEB
AREEB MOHD
AKBAR
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
MOHD
AKBAR Date:
2026.09.16
17:18:18
+0530
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL ARBITRATION PETITION NO. 865 OF 2026
SAP India Private Limited ...Petitioner
Versus
Cox and Kings Limited ...Respondent
_______
Mr. Yohaann Limathwalla, Mr. Farhad Sorabjee, Mr. Pratik Pawar, Ms.
Shanaya Cyrus Irani, Mr. Siddhesh S. Pradhan i/b. J. Sagar Associates for
the Petitioner.
Mr. Navdeep Dahiya, Mr. Hiroo Advani, Ms. Janhavi Sakalkar, Ms.
Hitanshi Mehta i/b. Advani Law, Bharucha & Partners for Respondent.
_______
CORAM : ARIF S. DOCTOR, J.
RESERVED ON : 3rd SEPTEMBER 2026
PRONOUNCED ON : 10th SEPTEMBER 2026
JUDGMENT
1. The present Petition seeks an extension of the mandate of the Arbitral
Tribunal constituted by the Hon’ble Supreme Court by Order dated 2nd
January 2019. The Arbitral Tribunal comprises of three retired Judges,
one of Bombay High Court and two of the Hon’ble Supreme Court. The
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Tribunal is presided over by Justice Madan Lokur and, hence, for ease of
reference, the Tribunal shall be referred to as the “Justice Lokur
Tribunal”. The Petitioner is the Claimant in the arbitration before the
Justice Lokur Tribunal.
2. The Respondent has filed an Affidavit in Reply opposing the captioned
Petition, essentially on the ground that the Justice Lokur Tribunal is
functus officio and that the Petitioner has not shown sufficient cause
under the provisions of Section 29A(5) of the Arbitration and
Conciliation Act, 1996 (“Arbitration Act”) for seeking an extension of
time.
Submissions on behalf of the Petitioner:
3. Mr. Limathwalla, learned counsel appearing on behalf of the Petitioner, at
the outset submitted that the Petitioner and the Respondent had entered
into a contract for the provision of business software and related
implementation services. Clause 15.7 of the General Terms and
Conditions (“GTC”) provided for arbitration.
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4. He then submitted that, on 29th October 2017, the Petitioner claimed that
there were certain amounts outstanding from the Respondent under the
GTC read with Order Form 1.
5. The Petitioner then filed an application under Section 11 of the
Arbitration Act, in which, pursuant to an Order of the Hon’ble Supreme
Court dated 2nd January 2019, the Justice Lokur Tribunal was appointed.
The Petitioner filed its Statement of Claim before the Justice Lokur
Tribunal on 22nd March 2019, inter alia, seeking an amount of INR
17,98,47,906/- as outstanding amounts due and payable by the
Respondent, under the GTC read with Order Form 1.
6. On 4th July 2019, the parties consented to an extension of six months for
completion of the arbitral proceedings before the Justice Lokur Tribunal,
after which the Respondent filed its Statement of Defence and
Counter-claim on 31st July 2019, claiming INR 45,99,71,098/- from the
Petitioner.
7. On 22nd October 2019, after the completion of pleadings in the arbitration
before the Justice Lokur Tribunal, the National Company Law Tribunal,
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Mumbai (“NCLT”), admitted the Respondent into the Corporate
Insolvency Resolution Process (“CIRP”). Accordingly, a moratorium
under Section 14 of the Insolvency and Bankruptcy Code, 2016 (“IBC”),
came into force, resulting in an automatic stay of all legal proceedings
against the Respondent. The Justice Lokur Tribunal, therefore, on 5th
November 2019, informed the parties that the arbitral proceedings stood
adjourned sine die.
8. He submitted that the Respondent then, on 7th November 2019, issued a
fresh notice under Clause 15.7 of the GTC invoking arbitration against
the Petitioner and SAP SE, the parent company of the Petitioner. On 6th
October 2020, the Respondent filed an application under Section 11 of the
Arbitration Act before the Hon’ble Supreme Court for the appointment of
an arbitrator pursuant to the Respondent’s invocation of arbitration.
9. On 16th December 2021, the NCLT directed the Respondent’s liquidation
since no resolution plan was forthcoming. The Petitioner accordingly
lodged its claim with the Liquidator on 21st February 2022. The
Liquidator then, on 16th March 2022, admitted the Petitioner’s claim for a
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nominal amount of Re. 1/- and specifically recorded that the liability
could not be quantified owing to the ongoing arbitration proceedings with
Cox and Kings. Mr. Limathwalla was at pains to point out that the only
arbitration proceedings pending on that date between the Parties were the
proceedings before the Justice Lokur Tribunal.
10. Mr. Limathwalla then submitted that it was only on 9th September 2024
that the Hon’ble Supreme Court allowed the Respondent’s Section 11
application and appointed Justice Mohit Shah, former Chief Justice of
this Court, as the Sole Arbitrator (“the Justice Shah Tribunal”) to
adjudicate the Respondent’s disputes against the Petitioner and SAP SE,
leaving open all rights and contention of the Petitioner to raise all
objections with regard to the joinder of SAP SE before the Justice Shah
Tribunal.
11. He submitted that the Respondent thereafter filed its Statement of Claim
before the Justice Shah Tribunal on 11th October 2024, in which the
Respondent had initially claimed an amount of INR 45.99 crores. The
Petitioner then filed an application under Section 16 of the Arbitration
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Act challenging the jurisdiction of the Justice Shah Tribunal, inter alia,
on the ground that the subject matter of the arbitration was already
pending before the Justice Lokur Tribunal. This Application was,
however, rejected.
12. The Respondent thereafter filed an amended Statement of Claim before
the Justice Shah Tribunal in which the Respondent’s claim was enhanced
to INR 45,99,71,097/-. Mr. Limathwalla pointed out that this amount was
virtually identical to that claimed by the Respondent in its Counter-claim
before the Justice Lokur Tribunal. The Petitioner, therefore, on 24th July
2025, filed a second application under Section 16 of the Arbitration Act,
once again challenging the jurisdiction of the Justice Shah Tribunal. This
Application was also, however, rejected on 10th November 2025.
13. Learned Counsel then pointed out that the Petitioner challenged the
Order dated 10th November 2025 by filing a Writ Petition before this
Court. The Writ Petition was, however, dismissed on 23rd December
2025, and the Special Leave Petition filed by the Petitioner impugning
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the order dated 23rd December 2025 was also dismissed by the Hon’ble
Supreme Court on 23rd January 2026.
14. Mr. Limathwalla submitted that in the aforesaid circumstances, the
Petitioner approached the Justice Lokur Tribunal on 2nd February 2026
seeking resumption and continuation of the arbitral proceedings,
principally for adjudication of the Petitioner’s pending claim. He
submitted that the Respondent opposed the request on the ground that the
Justice Lokur Tribunal had become functus officio and lacked jurisdiction
to revive or continue the proceedings and also that the Respondent’s
Counter-claim was pending before the Justice Shah Tribunal and that the
Petitioner’s claim had been lodged with the Liquidator.
15. Mr. Limathwalla submitted that, on 24th March 2026, the Justice Shah
Tribunal recorded that the Respondent would not press its Counter-claim
before the Justice Lokur Tribunal and that the Petitioner and SAP SE
would file their Statement of Defence before the Justice Shah Tribunal
without prejudice to their rights and contentions before the Justice Lokur
Tribunal. He submitted that, despite this position having been recorded by
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the Justice Shah Tribunal, the Respondent, reiterated before the Justice
Lokur Tribunal on 3rd April 2026 that the Justice Lokur Tribunal was
functus officio and lacked jurisdiction to revive the proceedings.
16. He submitted that the Petitioner, then on 20th April 2026, appeared before
the Justice Lokur Tribunal and made detailed submissions seeking revival
and continuation of the proceedings for adjudication of its pending
claims, at which time he submitted that the Respondent chose not to
appear. Upon conclusion of the Petitioner’s submissions, the Justice
Lokur Tribunal directed the Petitioner to approach this Court and seek an
extension of time, and thus the present Petition was filed.
17. Mr. Limathwalla submitted that, pursuant to the order of the Hon’ble
Supreme Court in Re:Cognizance for Extension of Limitation,1 the
period from 15th March 2020 to 28th February 2022 stood excluded for the
purpose of computation of limitation. On that basis, he submitted that 469
days remained available to the Justice Lokur Tribunal and that its
mandate would consequently expire on 13th June 2023.
1
(2022) 3 SCC 117.
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18. Mr. Limathwalla submitted that the Petitioner had diligently pursued its
claims throughout and that the inability of the Justice Lokur Tribunal to
proceed resulted from circumstances beyond the Petitioner’s control,
including the commencement of CIRP against the Respondent, the
consequent statutory moratorium, the COVID-19 exclusion period, and
the Respondent’s subsequent decision to pursue the same subject matter
before a separately constituted arbitral tribunal.
19. Mr. Limathwalla submitted that the Petitioner had established the
necessary grounds under Section 29A of the Arbitration Act for the
extension of the mandate of the Justice Lokur Tribunal, since the
Petitioner had not in any manner delayed or sought to frustrate the
arbitration that was pending before the Justice Lokur Tribunal.
20. He submitted that the interests of justice would require this Court to
extend the mandate of the Justice Lokur Tribunal to complete the
arbitration proceedings and adjudicate on the merits of the Petitioner’s
claim, which remained pending before the Tribunal originally constituted
for that very purpose. He reiterated that the proceedings before the Justice
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Lokur Tribunal was stayed not on account of any fault, much less default
on the part of the Petitioner. He therefore submitted that the mandate of
the Justice Lokur Tribunal ought to be extended to enable the Petitioner’s
claim to be adjudicated on merits. This, he submitted, would best serve
the substantive interest of justice and would aid the very object of
arbitration and the purpose for which the Justice Lokur Tribunal was
appointed in the first instance.
Submissions on behalf of the Respondent:
21. Mr. Dahiya, learned counsel for the Respondent, submitted that the
principal question before the Court was whether the Petitioner had
demonstrated “sufficient cause” within the meaning of Section 29A(5) of
the Arbitration Act. He submitted that the Petitioner had not.
22. He then pointed out that the Petitioner had sought an extension of the
mandate until 30th April 2027, although the Justice Lokur Tribunal had
not presided since 5th November 2019. Mr. Dahiya submitted that the
mandate of the Justice Lokur Tribunal had expired on 17th June 2022 and
not on 13th June 2023, as contended by the Petitioner. He submitted that
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Section 29A(5) permits an extension of time only upon sufficient cause
being established, and the Court cannot extend time under Section 29A of
the Arbitration Act mechanically or as a matter of course. In support of
his contention, he placed reliance upon the decision of the Hon’ble
Supreme Court in Rohan Builders (India) Private Limited v. Berger
Paints India Limited.2
23. Mr. Dahiya then also placed reliance upon the decision of the Hon’ble
Supreme Court in Ajay Protech Pvt. Ltd. v. General Manager & Anr.,3 to
submit that the expression ‘sufficient cause’ must be understood in the
context of the underlying purpose of arbitration, namely, effective
resolution of disputes through the agreed mechanism and not permitting
procedural delay to defeat substantive adjudication. He also placed
reliance upon the decision of the Hon’ble Supreme Court in the case of C.
Velusamy v. K. Indhera4 to point out that the Hon’ble Supreme Court
reiterated that an arbitral tribunal’s mandate is not automatically extended
2
2023 SCC OnLine Del 2990.
3
(2026) 7 SCC 452
4
(2026) 5 SCC 340
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and that the Court must exercise its discretion after close scrutiny of the
facts, while considering the rights of all stakeholders.
24. Mr. Dahiya submitted that in the facts of the present case the Petitioner
had failed to plead or establish sufficient cause for the delay. The Petition
and Rejoinder, according to him, contained only general assertions that
the Petitioner had no alternative forum and that the delay was caused by
“extraordinary circumstances”. He pointed out that the Petitioner had not
offered any specific explanation for the period between 16th December
2021, when the Respondent was ordered to be liquidated, upto 23rd April
2026, when the present Petition was filed. He also pointed out that the
Petitioner had not produced any correspondence, document or other
material explaining why the Petitioner had not sought an extension of the
mandate during this period. He pointed out that the Respondent had
specifically pleaded in its Affidavit in Reply that this four-year period
remained unexplained.
25. Mr. Dahiya then placed reliance upon the decision of this Court in the
case of Bilkish Mohammed Umar Khatri v. Sarabjit Singh Arora5 to
5
2020 SCC OnLine Bom 2451.
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point out that this Court had refused an extension under Section 29A in
circumstances where the intervening period had not been explained. He
also placed reliance upon the decision in the case of NeoGrowth Credit
Private Limited v. Prestige Home Textiles Co.6 and Skylark Cagers India
Private Limited v. Institute of Liver and Biliary Sciences,7 which he
submitted recognised that an unexplained delay is inconsistent with the
expeditious nature of arbitration.
26. Mr. Dahiya submitted that the Petitioner knew, at least by 16th March
2022, that the Liquidator had admitted its claim only notionally at Re. 1/-.
He submitted that if the Liquidator’s reference to “ongoing arbitration
proceedings” related to the Respondent’s Section 11 proceedings before
the Hon’ble Supreme Court, the Petitioner’s remedy lay under the IBC,
including the statutory mechanism for challenging the quantification of
its claim, which it admittedly did not pursue.
27. Alternatively, he submitted that if the Liquidator was referring to the
arbitration before the Justice Lokur Tribunal, the Petitioner knew on 16th
March 2022 that its claim depended upon proceedings that had been
6
2019 SCC OnLine Bom 10743.
7
2023 SCC OnLine Del 1276.
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adjourned sine die since 5th November 2019. He submitted that even as
per the Respondent’s computation of time, the mandate of the Justice
Lokur Tribunal remained alive until 17th June 2022, which gave the
Petitioner ample opportunity to seek an extension under Section 29A.
Despite this, he submitted that the Petitioner did not seek an extension.
28. Mr. Dahiya submitted that the Petitioner’s own actions therefore
demonstrated the absence of sufficient cause. He submitted that, even
assuming the mandate of the Tribunal had expired only in June 2023 and
that the Petitioner’s claim could only be quantified before the Justice
Lokur Tribunal, there was no explanation for the Petitioner’s failure to
approach the Justice Lokur Tribunal until February 2026 and thereafter
this Court only in April 2026. He was at pains to point out that the
Petitioner was not inactive during this period, since the Petitioner had
actively participated in the proceedings before the Justice Shah Tribunal
by filing two applications under Section 16 of the Arbitration Act,
followed by a Writ Petition before this Court and an SLP before the
Hon’ble Supreme Court.
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29. Mr. Dahiya submitted that the Petitioner’s conduct amounted to
“fence-sitting”. According to him, the Petitioner sought revival of the
arbitration proceeding before the Justice Lokur Tribunal only after the
Petitioner’s attempts to resist the arbitration before the Justice Shah
Tribunal had failed. He placed reliance on the decision in Desire
Infrabuild Private Limited v. Oyo Apartments Investments LLP8 to point
out that permitting the petitioner would lead to not only enjoying the
fruits of being a fence sitter but also putting a premium on its inaction.
30. He then also placed reliance upon the decision in Surinder Singh v.
Arrow Engineering Limited,9 in which he pointed out that this Court had
declined to revive stale arbitral proceedings in view of prolonged
inactivity and the applicant’s failure to seek an extension even after the
Tribunal’s mandate had expired.
31. In the alternative and without prejudice to the above, Mr. Dahiya
submitted that any extension of time would serve no useful purpose
because the Respondent was in liquidation. He therefore submitted that
even if any award was passed in favour of the Petitioner, the same would
8
2025 SCC OnLine Del 5929.
9
2025 SCC OnLine Bom 1761.
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be incapable of being enforced under the provisions of Sections 33(5) and
33(1)(b)(iv) of the IBC.
32. Mr. Dahiya submitted that the Petitioner’s claim had already been
admitted in the liquidation and that the statutory mechanism under the
IBC remained available for determination of its quantum. He further
pointed out that the Justice Shah Tribunal had recorded on 24th March
2026 that the Respondent would not press its Counter-claim before the
Justice Lokur Tribunal. He therefore submitted that if the mandate of the
Justice Lokur Tribunal were to be extended, the only surviving claim
would be the Petitioner’s claim, which had already been lodged and
admitted in the liquidation.
33. Mr. Dahiya further submitted that the disputes had, in any event, been
placed before the Justice Shah Tribunal pursuant to the Hon’ble Supreme
Court’s order dated 9th September 2024. He pointed out that the Petitioner
had resisted the Section 11 application on the ground that the
Respondent’s claims were already pending before the Justice Lokur
Tribunal and that parallel proceedings could result in conflicting
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decisions. He submitted that the Hon’ble Supreme Court, however, did
not adjudicate those objections at the Section 11 stage and instead left it
open for the Petitioner to raise all objections before the Justice Shah
Tribunal. He submitted that these objections were then raised by the
Petitioner before the Justice Shah Tribunal and were rejected by the order
dated 31st March 2025.
34. Mr Dahiya therefore submitted that continuation of two arbitrations
arising from the same contractual framework would create a real risk of
inconsistent findings and conflicting decisions. He pointed out that the
Respondent’s claim before the Justice Shah Tribunal was for a refund of
the licence fee paid for the SAP Hybris Solution and the amounts paid
towards its implementation, on the allegation that the software was not
delivered as contracted, whereas the Petitioner’s claim before the Justice
Lokur Tribunal was for unpaid invoices for the same software under the
same contractual framework. The two claims, he submitted, were
therefore substantially mirror images of each other.
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35. Mr. Dahiya submitted that the statutory scheme of the IBC also
reinforced the need for finality. In support of his contention, he placed
reliance upon the Insolvency Law Committee’s February 2020 Report
and submitted that Parliament had subsequently enacted Section
33(1)(b)(iv), extending the effect of the moratorium under Section
14(1)(a) to liquidation.
36. Mr. Dahiya therefore submitted that, when viewed cumulatively, the
Petition sought an extension of the mandate of the Justice Lokur Tribunal
nearly four years after the mandate had expired in respect of a company
which was now in liquidation. He reiterated that the Petitioner had neither
explained the intervening period nor demonstrated any circumstance
beyond its control that prevented it from seeking an extension within the
prescribed period.
37. Mr. Dahiya accordingly prayed that the Petition be dismissed with
exemplary costs.
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Submissions on behalf of the Petitioner in Rejoinder:
38. In rejoinder, Mr. Limathwalla submitted that the Respondent’s objections
could broadly be grouped under five heads: (i) absence of sufficient
cause; (ii) the Justice Lokur Tribunal being functus officio; (iii) the effect
of the constitution of the Justice Shah Tribunal; (iv) the effect of the
Respondent’s liquidation and the amendments to the IBC; and (v) the
alleged futility of proceeding with the Petitioner’s claim before the
Justice Lokur Tribunal.
39. He submitted that, although these objections were framed as objections
to “sufficient cause”, they did not address the central question under
Section 29A(5), i.e., whether, having regard to the peculiar facts of the
case and the circumstances that interrupted the proceedings before the
Justice Lokur Tribunal, sufficient cause existed to extend its mandate.
40. Also placing reliance upon the decision in the case of Rohan Builders
(India) Pvt. Ltd. v. Berger Paints India Ltd., he submitted that an
application under Section 29A(4) is maintainable, whether it is filed
before or after the expiry of the prescribed period. He therefore submitted
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that the mere fact that the present Petition was filed after the expiry of the
mandate did not render it non-maintainable.
41. Mr. Limathwalla then submitted that the Petitioner had established
sufficient cause within the meaning of Section 29A(5) of the Arbitration
Act. He reiterated that the interruption of the proceedings before the
Justice Lokur Tribunal was not attributable to any lack of diligence on the
Petitioner’s part but resulted from circumstances beyond the Petitioner's
control, namely (i) the Respondent’s admission into CIRP, (ii) the
resulting statutory moratorium, (iii) the Respondent’s subsequent
invocation of a fresh arbitration concerning the same subject matter, and
(iv) the Petitioner’s bona fide pursuit of its jurisdictional objections
before the Justice Shah Tribunal, this Court and the Hon’ble Supreme
Court.
42. He then submitted that it was wholly inequitable for the Respondent to
rely upon consequences arising from its own conduct to oppose the
extension of the mandate of the Justice Lokur Tribunal. He submitted that
the Respondent, having already filed its Counter-claim before the Justice
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Lokur Tribunal had consciously chosen to invoke a fresh arbitration in
respect of the same subject matter. He submitted that the Petitioner was
therefore entitled to oppose the subsequent proceedings because the same
disputes were already sub judice before the Justice Lokur Tribunal.
43. Mr. Limathwalla submitted that the Petitioner’s position was not that of a
fence sitter since the Petitioner had consistently maintained that the
Justice Lokur Tribunal was the appropriate forum for adjudication of
disputes arising from the parties’ contractual relationship. He submitted
that the Petitioner was granted liberty by the Hon’ble Supreme Court to
raise all contentions with regard to the jurisdiction of the Justice Shah
Tribunal and the joinder of SAP SE before the Justice Shah Tribunal,
which is precisely what the Petitioner had done. He therefore submitted
that, in these facts, it was wholly untenable for the Respondent to contend
that the Petitioner had abandoned its own claims.
44. Mr. Limathwala then placed reliance upon the Liquidator’s email dated
16th March 2022, which recorded that the Petitioner’s claim was admitted
notionally at Re. 1/- because the liability could not then be quantified
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owing to the “ongoing arbitration proceedings with Cox & Kings Ltd.”
He also reiterated that the Respondent’s subsequent Statement of Claim
before the Justice Shah Tribunal substantially mirrored its Counter-claim
before the Justice Lokur Tribunal. He therefore submitted that the parallel
proceedings were a consequence of the Respondent’s own actions, for
which the Petitioner could not be faulted.
45. Mr. Limathwalla submitted that the existence of “sufficient cause” must
be assessed on the facts and circumstances of each case and cannot be
determined by an inflexible test based solely on the passage of time. He
then placed reliance upon the decision in Ajay Protech to point out that
“sufficient cause” must be understood in light of the underlying purpose
of arbitration, namely, effective resolution of disputes. He submitted that
the facts of the present case fell squarely within that principle because the
arbitration proceedings before the Justice Lokur Tribunal were interrupted
because the Respondent was admitted to the CIRP process and not on
account of any wilful default on the Petitioner’s part.
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46. Mr. Limathwalla submitted that the authorities relied upon by the
Respondent were distinguishable on their facts. He pointed out the
decision in the case of Rajendra Kumar v. National Highways Authority
of India10 concerned an application that was unsupported by particulars
or documentary material, whereas the present Petition sets out the
complete procedural history and the circumstances that prevented the
continuation of the arbitration before the Justice Lokur Tribunal. Bilkish
Mohammed v. National Highways Authority of India was likewise
distinguishable, as the intervening period in that case was wholly
unexplained. Similarly, Desire Infrabuild Private Limited v. Oyo
Apartments Investments LLP was distinguishable because, in that case,
the Petitioner sought an extension only after an award had been rendered
and a stay had been obtained against it.
47. On the question of whether the Justice Lokur Tribunal was functus
officio, he submitted that the Respondent could not unilaterally terminate
the arbitral proceedings by asserting that the Tribunal had become functus
officio. He pointed out that Section 32 of the Arbitration Act provides for
10
Order dated 20th May 2026 passed by Himachal Pradesh High Court in Arbitration Case No. 216 of
2025.
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the manner in which arbitral proceedings can be terminated. In the
present case, he submitted that it was not even the Respondent's case that
the proceedings before the Justice Lokur Tribunal had been terminated
under Section 32.
48. Mr. Limathwalla submitted that a party cannot terminate arbitral
proceedings merely by declining to participate and thereafter contend that
the proceedings had ceased to exist. Similarly, he pointed out that the
Respondent’s decision to pursue its claim before the Justice Shah
Tribunal could not extinguish the Petitioner’s independent claims before
the Justice Lokur Tribunal. While the Respondent might elect the forum
in which to pursue its own claim, that election could not deprive the
Petitioner of a forum for the adjudication of its pending claims.
49. Mr. Limathwalla also disputed the contention that adjudication of the
Petitioner’s claim would be futile because the Respondent was in
liquidation. He pointed out that Regulation 29 of the Insolvency and
Bankruptcy Board of India (Liquidation Process) Regulations, 2016,
recognises mutual credits and set-offs between the corporate debtor and a
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creditor. He therefore submitted that, even if the Petitioner were to
succeed in its claim before the Justice Lokur Tribunal, it would have the
benefit of claiming a set-off against the Respondent. He therefore
submitted that the Respondent’s contention that the Petitioner’s claim was
incapable of being given effect to could not, at this stage, justify denying
the Petitioner an opportunity to have its claim adjudicated on merits.
50. Mr. Limathwalla further pointed out that, once the Respondent made
clear that it would not press its Counter-claim before the Justice Lokur
Tribunal, the Petitioner immediately sought resumption of the
proceedings for adjudication of its own claims. He submitted that this
conduct demonstrated diligence rather than abandonment. He accordingly
submitted that sufficient cause within the meaning of Section 29A(5) had
been established and the objections taken by the Respondent would not
justify depriving the Petitioner of adjudication of its pending claims.
51. Mr. Limathwalla therefore submitted that the Petition be allowed in
terms of prayer clause ‘(a)’.
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52. Having heard Learned Counsel for the parties and considering the
peculiar facts of the present case, I find as follows, viz.
A.It is now well settled that the time to complete arbitration
proceedings can be extended after the expiry of the initial
twelve-month period or the extended six-month period, as held by
the Hon’ble Supreme Court in Rohan Builders (India) Pvt. Ltd. v.
Berger Paints India Ltd. The question, which therefore arises for
consideration in the present case, is whether the Petitioner has made
out sufficient cause for extending the mandate of the Justice Lokur
Tribunal under the provisions of Section 29A(5) of the Arbitration
Act.
B. The legislative intent underlying Section 29A is to ensure that
arbitral proceedings proceed expeditiously and that an arbitral award
is rendered within the prescribed timelines. The Hon’ble Supreme
Court, in C. Velusamy v. K. Indhera, has held that the Court must
exercise its discretion under Section 29A after carefully examining
the facts and circumstances of each case and not as a matter of
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routine. Similarly, as held in M/s Ajay Protech Pvt. Ltd. v. General
Manager & Anr., the expression “sufficient cause” must be
understood in the context of the underlying purpose of arbitration,
namely, the resolution of disputes through the mechanism agreed
upon by the parties. Therefore, where arbitration proceedings do not
conclude within the prescribed timelines for reasons beyond the
parties' or tribunal's control, or where the delay is not due to any
wilful default or deliberate attempt to delay by the party applying for
an extension, it would be manifestly unjust not to condone the delay
if sufficient cause is shown. This would really defeat the very
purpose of arbitration.
C. The decisions in Rajendra Kumar v. National Highways Authority
of India and Bilkish Mohammed Umar Khatri v. Sarabjit Singh
Arora, upon which reliance was placed by the Respondent, do not, in
my view, assist the Respondent. Neither decision lays down any
absolute proposition of law that an application seeking extension of
the mandate must necessarily fail merely because it is made after a
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considerable lapse of time. In both cases, the Court declined to
extend the mandate because the delay had not been satisfactorily
explained. The determinative consideration in those cases, therefore,
was the absence of sufficient cause and not merely the length of the
delay.
D.In the present case, it is not in dispute that, after completion of the
pleadings before the Justice Lokur Tribunal, the Respondent was
admitted into CIRP, resulting in a stay of legal proceedings against it
under Section 14 of the IBC. It was in these circumstances that the
Justice Lokur Tribunal adjourned the proceedings sine die. The
Respondent thereafter invoked a fresh arbitration against the
Petitioner and SAP SE in which the Respondent has made the
virtually identical claim against the Petitioner as that made by the
Respondent in its counter-claim filed in the proceedings before the
Justice Lokur Tribunal. What is crucial to note is that when the
Hon’ble Supreme Court allowed the Section 11 Petition filed by the
Respondent, the Hon’ble Supreme Court specifically kept open all
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rights and contentions of the Petitioner to raise all objections before
the Shah Tribunal. The Petitioner was, therefore, fully justified in
contesting the jurisdiction of the Justice Shah Tribunal.
E. The Hon’ble Supreme Court dismissed the Petitioner’s SLP on 23rd
January 2026. The Petitioner approached the Justice Lokur Tribunal
on 2nd February 2026, within a short period thereafter, seeking the
resumption of the original arbitration. Thus, immediately after the
jurisdictional challenge was finally exhausted, the Petitioner acted
promptly to seek resumption of the proceedings before the Justice
Lokur Tribunal. This conduct is inconsistent with any suggestion that
the Petitioner had abandoned the arbitration before that Tribunal. In
the context of these facts, Respondent’s contention that the Petitioner
was a “fence sitter” is ill-founded. Hence, the decisions in the case of
Desire Infrabuild Pvt. Ltd. v. Oyo Apartments Investments LLP,
upon which reliance was placed by the Respondent, would not apply.
F. On conduct, and crucially, the Respondent has withdrawn its
counter-claim before the Justice Lokur Tribunal and opposed the
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continuation of proceedings on the ground that the Petitioner's claim
has already been adjudicated by the Liquidator. Thus, the Petitioner
is placed in a position where its claim may effectively be prevented
from being adjudicated through no fault of the Petitioner. The
Respondent’s contention that the Petitioner’s claim has already been
adjudicated by the Official Liquidator also does not, at this stage,
take the matter any further, particularly having regard to Regulation
29 of the IBC, which recognises the right to claim mutual credits and
set-off. In any event, this is not something that the Court has to
consider when deciding whether the Petitioner has made out a case
for extension of time under Section 29A(5) of the Arbitration Act. It
is always open to the Respondent to raise all such objections before
the Tribunal.
G.Hence, for the reasons set out in (A) to (F) above, I am satisfied that
the Petitioner has made out a case for the extension of the mandate
of the Justice Lokur Tribunal. The delay in completion of the arbitral
proceedings before the Justice Lokur Tribunal cannot, in the facts of
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the present case, be attributed to any deliberate, wilful or negligent
default on the part of the Petitioner, much less of the Tribunal. In
these circumstances, to permit the mandate to lapse without
affording the Petitioner an opportunity to have its pending claim
adjudicated would, in my view, defeat rather than advance the
underlying object of the arbitral process.
53.For the reasons mentioned hereinabove, I pass the following Order:
ORDER
i. The captioned Petition is allowed, and the time limit for the arbitral
tribunal to make an award is extended by a period of one year.
ii. The extended time shall commence from the date on which a copy
of this Order is uploaded.
iii. There shall be no orders as to costs.
[ARIF S. DOCTOR, J.]
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