The Supreme Court of India's decision in Tata Sons Private Limited v. Siva Industries and Holdings Limited (Miscellaneous Application No. 2680 of 2019 in Arbitration Case (Civil) No. 38 of 2017) is a landmark ruling concerning the temporal application of statutory timelines within the framework of international commercial arbitration under Indian law. The central question before the court was whether Section 29A (1) of the Arbitration and Conciliation Act, 1996, as amended, which establishes deadlines for delivering arbitral awards, is applicable to international commercial arbitrations seated in India. This case significantly impacts the conduct and efficiency of such arbitrations.

Background Facts and Circumstances:
The dispute arose from a series of agreements involving Tata Sons Pvt. Ltd. ("Tata Sons"), Siva Industries and Holdings Ltd. ("Siva Industries"), and Tata Tele Services Ltd. ("TTSL").

• 2006 Share Subscription Agreement: Tata Sons, Siva Industries, and TTSL entered into an agreement whereby Siva Industries received shares in TTSL.
   
• 2008 Share Subscription Agreement with NTT Docomo: Tata Sons, TTSL, and NTT Docomo Inc. ("Docomo"), a Japanese telecommunications company, executed a Share Subscription Agreement. This agreement allowed Docomo to acquire a 26% equity stake in TTSL through a combination of primary and secondary share acquisitions.
   
• 2009 Share Acquisition and Agreements: Docomo acquired 20.740 million equity shares of TTSL from Siva Industries. This transaction was formalized with a Shareholders' Agreement among Tata Sons, TTSL, and Docomo. Crucially, an Inter Se Agreement was also executed between Tata Sons, TTSL, and Siva Industries. This agreement stipulated that should Docomo exercise its right to sell its shares back to Tata Sons under the Shareholder's Agreement, Siva Industries would be obligated to purchase a pro-rata share of such TTSL shares. This Inter Se Agreement formed the basis for the later dispute.
   
• Docomo's Exit and Arbitration: In July 2014, Docomo exercised its sale option, triggering the contractual obligation for Tata Sons to purchase its shares. When disputes arose regarding the valuation and execution of this buy-back option, Docomo initiated arbitration proceedings against Tata Sons under the Rules of the London Court of International Arbitration (LCIA). The arbitral tribunal ruled in favour of Docomo, ordering Tata Sons to pay substantial damages and acquire Docomo's TTSL shares.
   
• Siva Industries' Default and Subsequent Arbitration: Following the outcome of the Docomo arbitration, Tata Sons invoked the Inter Se Agreement and demanded that Siva Industries purchase its proportionate share of TTSL shares from Docomo. Siva Industries failed to comply with this demand, leading Tata Sons to commence arbitration proceedings against Siva Industries and its promoter, Mr. C. Sivasankaran.
   
• Invocation of Arbitration and Appointment of Arbitrator: Tata Sons filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, before the Supreme Court of India, requesting the appointment of an arbitral tribunal to adjudicate the dispute with Siva Industries. With the consent of both parties, the Court appointed Justice S.N. Variava (Retd.) as the sole arbitrator.
   
• Extension of Time and Insolvency Proceedings: During the arbitration, both parties agreed to extend the statutory time limit for the arbitrator to render the award by six months, utilizing the provision under Section 29A (3) of the Act. However, during this extended period, insolvency proceedings were initiated against Siva Industries under the Insolvency and Bankruptcy Code (IBC), resulting in a moratorium that effectively halted the arbitration proceedings. The moratorium was eventually lifted on June 3, 2022, allowing the arbitration to resume.

Key Legal Issues Before the Supreme Court:

• Applicability of Amended Section 29A to International Commercial Arbitration: Does the amended Section 29A of the Arbitration and Conciliation Act, 1996, specifically the twelve-month time limit stipulation for rendering an arbitral award, apply to international commercial arbitrations seated in India? This involved interpreting the scope and intent of the amendment.
   
• Retrospective Application of the Amendment: Does the amendment to Section 29A, which came into effect on August 30, 2019, apply retrospectively to arbitration proceedings that were already ongoing as of that date? This addressed the fundamental principles of statutory interpretation concerning procedural laws.

Court's Analysis and Reasoning:

• Exclusion of International Commercial Arbitrations from Time Limit: The Court recognized that the Arbitration and Conciliation (Amendment) Act, 2019, explicitly amended Section 29A to exclude international commercial arbitrations from the stringent twelve-month time limit for rendering arbitral awards. This exclusion signalled a deliberate policy shift to promote a more flexible and accommodating approach to international arbitrations.
   
• Procedural Nature of the Amendment: The Court characterized the amendment to Section 29A as a procedural one. It emphasized that the amendment primarily aimed to streamline and facilitate the arbitration process in international commercial disputes, rather than altering substantive rights or obligations of the parties.
   
• Presumption of Retrospective Application: The Court reiterated the established legal principle that procedural amendments are generally presumed to have retrospective effect, unless the legislature explicitly indicates a contrary intention (i.e., prospective application only).
   
• Absence of Prospective Limitation: In this particular instance, the Court noted that the 2019 amendment to Section 29A did not contain any provision explicitly restricting its application to future arbitration proceedings. Therefore, the default presumption of retrospective application prevailed.
   
• Retrospective Applicability Confirmed: Based on the above reasoning, the Court definitively concluded that the amended Section 29A applies retrospectively to all ongoing arbitration proceedings as of August 30, 2019, the date the amendment came into force.

Judgment and Outcome:
Based on its analysis, the Supreme Court ruled that the twelve-month time limit prescribed in the original Section 29A does not apply to the international commercial arbitration between Tata Sons and Siva Industries. Consequently, the arbitration proceedings could continue without the necessity of obtaining an extension of the arbitrator's mandate based on the original time constraints of Section 29A. The Court effectively removed the statutory time pressure from the ongoing arbitration.

The amended Section 29A of India's arbitration law aims to streamline arbitration timelines, responding to Justice B.N. Srikrishna's report on the efficiency of arbitration. For example, imagine two Indian companies, A and B, in a domestic dispute; the initial Section 29A aimed to resolve their issues quickly. However, a committee was created to consider if the 12-month deadline should apply to international commercial arbitrations, acknowledging their unique challenges. Consider a complex case between an Indian firm, X, and a German company, Y, involving patents and multiple jurisdictions; the committee questioned if a rigid deadline was appropriate.

The committee discovered that international arbitration institutions resisted court-imposed deadlines. These bodies, like the International Chamber of Commerce (ICC) or the London Court of International Arbitration (LCIA), argued they already had effective procedural management systems. For instance, the ICC has rules and procedures that the parties involved usually agree on relating to timelines, that consider the contract issues and the jurisdictions involved, rather than arbitrary court-imposed deadlines. Different cases need different timeframes, and a one-size-fits-all approach was deemed unworkable. It would potentially harm the efficacy of arbitration if a complex patent dispute between X and Y was forced to a premature conclusion.

Consequently, parliament revised the law to limit judicial intervention in international arbitration, particularly concerning deadline extensions. This change freed international commercial arbitrations from mandatory timelines, allowing for more efficient proceedings aligned with international norms. For example, now, company X and Y's arbitration can proceed at a reasonable pace, dictated by the complexity of the issues and agreed upon by both parties and the arbitral tribunal, rather than being constrained by a strict court-mandated deadline. This move was praised by arbitral institutions, strengthening their independence and fostering a better environment for resolving cross-border disputes.

Conclusion and Implications:
The Supreme Court's decision in Tata Sons Private Limited v. Siva Industries and Holdings Limited provides crucial clarification regarding the applicability of statutory time limits in international commercial arbitration under Indian law.
The judgment reinforces the following key principles:

• Flexibility in International Arbitration: The ruling underscores the Indian judiciary's commitment to fostering a more flexible and efficient arbitration process in international commercial disputes. It recognizes that international arbitrations often involve complex legal and factual issues and require more time for thorough adjudication.
• Alignment with Global Best Practices: By excluding international commercial arbitrations from rigid domestic time limits, the Indian legal framework aligns more closely with international arbitration best practices, which emphasize party autonomy and efficient dispute resolution tailored to the specific needs of cross-border commercial transactions.
• Retrospective Application of Procedural Amendments: The case highlights the general rule that procedural changes apply to past cases unless the law clearly states otherwise.
• Promoting India as an Arbitration Hub: Ultimately, this decision contributes to making India a more attractive and competitive destination for international commercial arbitration, signalling a pro-arbitration stance from the Indian judicial system.

Written By: Md.Imran Wahab, IPS, IGP, Provisioning, West Bengal
Email: imranwahab216@gmail.com, Ph no: 9836576565