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Report No. 76

11.13. Reasons for the recommendation as to time limit.-

In suggesting substitution of the period of six months instead of the existing period of four months as the time during which arbitration proceedings should normally be completed,1 we are influenced by two considerations. We feel that the present period of four months is in most cases unrealistic, because it is not normally possible in complete arbitration proceedings within four months. At the same time, we do not want to fix a much longer period, lest it should give rise to an attitude of complacency on the part of the arbitrators and the parties. The underlying object of all arbitration proceedings is that such proceedings should be completed as speedily and expeditiously as possible.

1.Para. 11.12, supra.

11.14. At the same time, we are conscious of the fact that there may be quite a large number of cases in which it may not be possible to complete the arbitration proceedings within a period of six months. For such cases we have provided for the extension of the time for completing arbitration proceedings upto one year by the court under section 28 of the Act. A period of one year, in our opinion, should normally be the outside limit within which arbitration proceedings should be completed in most of the cases.

The power of the court to grant extension of time in most of the cases would thus be up to a period of one year. There may, however, be cases wherein voluminous evidence is required to be recorded. There may also be some special and adequate reasons which may be brought to the notice of the court, justifying the extension of time beyond a period of one year. To have a rigid rule of allowing no extension of time beyond a period of one year would be in such cases cause undue hardship to the parties.

For such exceptional cases we are empowering the court to extend the time beyond a period of one year. The underlying object of section 28 of the Act and paragraphs 3 and 5 of the First Schedule is to ensure due expedition and speed in the completion of arbitration proceedings and, at the same time, to ensure that the entire proceedings are not set at naught in those cases wherein because of voluminous evidence or other special and adequate reasons, the proceedings cannot be finished within the prescribed time.

11.15. The unusual delay in completing arbitration proceedings in some cases referred to by the Public Accounts Committee1 can well be taken care of by the changes suggested by us.

1. Paras. 11.7 and 11.8, supra.

11.16. Quality of personnel important.-

We must, however, state here that in the ultimate analysis, the expeditious disposal of proceedings in arbitration depends not so much on legislative provisions as to time limit, as on the quality of the personnel selected by the parties as arbitrators or umpires. This is a matter which can hardly be dealt with by legislation.

Arbitration Act, 1940 Back

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