Introduction: The Promise and Challenge of Procedural Efficiency

Arbitration has long been recognised as a timely and cost- efficient means of resolving a dispute as opposed to litigation, particularly in commercial matters where time is money and predictability is paramount. The arbitration regime in India, particularly after the 2015 and 2019 amendments to the Arbitration and Conciliation Act, 1996, have sought to align with the global standards1. One of the major reforms pertains to Section 23(4)2 of the Arbitration Act as added by the 2019 Amendment, which provides that the pleadings, which consist of statement of claim, statement of defence, counterclaim and rejoinder, are to be filed within six months of the date the tribunal is constituted.

The goal was straightforward, to ensure that laxity in procedures is eliminated right at the beginning and foster a sense of discipline early in arbitral proceedings. Presumably, this six-month time frame empowers the pace at which the rest of the arbitration process proceeds and feeds into the 12-month schedule to give the award as under Section 29A3.

This early efficiency in procedure is not however realised in practice. Essentially the arbitrators, particularly those in the ad hoc proceedings, grant extensions liberally. Procedural calendars do not have the force of law and Section 23(4)4, which is cast in mandatory language, is not accompanied by sanctions in the event of non-compliance. The outcome is that the supposedly procedural backbone is usually rendered as procedurally ineffective.

This blog attempts to decipher the difference between what legislators intended and what is real in terms of procedures. It discusses the manner in which Section 23(4)5 has been interpreted, how the international institutions manage pleading deadlines better, as well as why the Indian arbitration system needs to take back control of sanity in arbitration at the initial first step itself. The six month pleading period, as proposed by this paper, can make or break to the entire arbitration period.

Understanding Section 23: Structure and Purpose of the Pleading Framework

Section 23 of the Arbitration and Conciliation Act, 1996, outlines the pleading framework governing the initial written submissions in arbitral proceedings. The substantive adjudication rests

1. Arbitration & Conciliation Act, No. 26 of 1996, Acts of Parliament, 1996 (India), as amended by the Arbitration and Conciliation (Amendment) Act, No. 33 of 2019.

• The Arbitration and Conciliation Act, No. 26 of 1996, § 23(4), India Code (1996), https://legislative.gov.in/sites/default/files/A1996-26.pdf.

• The Arbitration and Conciliation Act, No. 26 of 1996, § 29A, India Code (1996), https://indiacode.nic.in.

• Id. § 23(4).

• Id. § 23(4).

• Sub section (1)7 requires the claimant to lodge a statement of claim to give all the facts, legal bases and available reliefs.

• Sub-section (2)8 gives the respondent the liberty of making a statement of defence and in case the need arises, counterclaim or set-off claim.

• Sub-section (3)9 empowers the arbitral tribunal to allow the amendment to pleadings except

where they lead to delay or disadvantage.

• Sub-section (4) forms the central act of procedure change which was inserted through the 2019 Amendment. It provides that the pleadings will be done within a period of six months, starting from the date the tribunal receives notice of its constitution10.

Section 23(4)11 was meant to institutionalise procedural efficiency at the very first stage of

arbitration. It was seen as the counterpart to Section 29A12 that stipulates the twelve-month limit to the issuance of arbitral awards. Theoretically, this staging was intended to compel parties and tribunals to adopt procedural discipline at an early stage and thereby expedite the resolution process.

Nonetheless, Section 23(4)13 does not have any explicit enforcement provision. Non-compliance does not attract any statutory penalty, an adverse cost order or a deemed consequence. It is this gap that has made courts apply the provision differently. In the case of Yashovardhan Sinha HUF v. Satyatej Vyapaar Pvt. Ltd. (Calcutta High Court, 2024)14, the Court determined that Section 23(4)15 is a statement of direction rather than a mandatory command, given that, as a consequence of non- compliance, no penalty is prescribed. The Court emphasised that although legislative time limits are important, the primacy of adjudicatory fairness and tribunal discretion should be upheld.

Thus, despite its apparently peremptory phrasing, Section 23(4)16 is often treated as aspirational in practice. Its impact is significantly diluted by interpretive flexibility and the absence of institutional

• Arbitration and Conciliation Act, No. 26 of 1996, § 23, India Code (1996), https://www.indiacode.nic.in.

• The Arbitration and Conciliation Act, No. 26 of 1996, § 23(1), Acts of Parliament, 1996 (India).

• The Arbitration and Conciliation Act, No. 26 of 1996, § 23(2), Acts of Parliament, 1996 (India).

• The Arbitration and Conciliation Act, No. 26 of 1996, § 23(3), Acts of Parliament, 1996 (India).

1. Arbitration and Conciliation (Amendment) Act, No. 33 of 2019, § 6, Gazette of India, Extraordinary, pt. II, sec. 1 (Aug. 9, 2019) (India).

1. Arbitration and Conciliation Act, § 23(4), supra note 2.

1. Arbitration and Conciliation Act § 29A, supra note 3.

1. Id. § 23(4).

1. Yashovardhan Sinha v. Satyatej Vyapaar (P) Ltd., 2024 SCC OnLine Cal 5386 (India).

1. Id. § 23(4).

1. Id. § 23(4).

2518 which allows termination on grounds of failure to present a claim, lacks any enforceable

mechanism. Without penalties of cost, exclusionary sanctions, or automatic continuation of proceedings, parties and even tribunals habitually apply the six-month rule as an advisory not a binding rule. This outcome results in systematic decline in the efficiency of arbitration.

Judicial Interpretation and Divergence in the Enforcement of Section 23(4)

The introduction of section 23(4)19 brought structure and discipline to the initial stages of arbitral proceedings. Nonetheless, the absence of any direct consequences of failing to abide by them has resulted in a lack of enforceability, and it is up to the courts to ascertain its strength. The courts will hence be critical in dictating the extent to which this clause can extend in practice and as the precedents indicate the interpretations have been anything but consistent.

Courts even before Section 23(4)20 made it known that they were keen to enforce procedural rigour. In Srei Infrastructure Finance Ltd. v. Tuff Drilling Pvt. Ltd. (Delhi HC, 2018)21, a tribunal cancelled its proceedings due to non-filing of the claim, under the Section 25(a)22. This was supported by the court, and it ruled that delays in pleading can be penalised by tribunals when they are reasonable.

Since 2019, the courts have been in dilemma about what Section 23(4)23 actually entails. In

Shapoorji Pallonji v. Jindal India Thermal (Delhi HC, 2020)24  stated that the provision is

retrospective in nature implying that the six-month period was to be applied to even the cases that were in the state of arbitration. However, in MBL Infrastructures v. Rites Ltd.25, a different bench of Delhi HC decided that it has only prospective application showing inadvertigent lack of interpretiveness.

In Emco Ltd. v. Delhi Transco Ltd. (Delhi HC, 2024)26, court provided that the 12-month time limitation mentioned in Section 29A27 only begins to run when pleadings have been finished and not right after commencing the arbitration itself. This ground-breaking judgment has squarely

1. Id. § 23(4).

1. The Arbitration and Conciliation Act, No. 26 of 1996, § 25, Acts of Parliament, 1996 (India).

1. Arbitration and Conciliation Act, supra note 2, § 23(4).

• Id. § 23(4).

• Srei Infrastructure Fin. Ltd. v. Tuff Drilling Pvt. Ltd., (2018) 11 SCC 470 (India).

• The Arbitration and Conciliation Act, No. 26 of 1996, § 25(a), Acts of Parliament, 1996 (India).

• Id. § 23(4).

• Shapoorji Pallonji & Co. (P) Ltd. v. Jindal India Thermal Power Ltd., 2020 SCC OnLine Del 2611 (India).

• MBL Infrastructure Ltd. v. Rites Ltd., 2020 SCC OnLine Del 3712 (India).

• EMCO Ltd. v. Delhi Transco Ltd., 2024 SCC OnLine Del 6306 : (2025) 316 DLT 146 (Del. HC).

• Arbitration and Conciliation Act, supra note 3, § 29A.

These instances indicate the shifting consideration of the judiciary with regard to Section 23(4)29 as both flexible and structuring and accordingly, its effectiveness is relative, depending on situations rather than absolute.

Comparative Lens: Global Practices in Procedural Discipline

The most prominent cause why a provision like Section 23(4)30fails to gain traction in practice is the fact that the ad hoc model of arbitration practiced in India lacks the institutional framework upon which timelines can be enforced. Conversely, the most recognised arbitral institutions worldwide, including the International Chamber of Commerce (ICC), and the Singapore International Arbitration Centre (SIAC) have incorporated the concept of procedural discipline into their systems unlike the ad hoc delays commonly observed in India.

According to the ICC Rules (2021), the tribunal must conduct a case management conference within the first few months of proceedings, which normally leads to Procedural Order No. 1 (PO-1). This order sets rigid time schedules for pleadings, sometimes with rigid dates as to the pleading of the statement of claim, the defence, the counterclaim, and the rejoinder31. To help enforce, ICC puts in place assigned case managers to measure progress and to step in when timelines are not met. The failure to comply may lead to sanction of costs, non-application of procedural rights or most in severe circumstances proceedings are carried on ex parte.

Similarly proactive are the SIAC Rules (2016). Although parties are given the discretion of 14 to 28 days to file statements of claim and defence, the deadlines are strictly observed using internal institutional control32. The Secretariat is in consistent communication with tribunals to maintain a timely progression and may escalate to a Registrar in the case of continued non-compliance.

The two institutions consider procedural discipline as part of the arbitration process. They are efficient not only because of rules, but because of external accountability mechanisms, something that ad hoc Indian arbitrations do not have at present.

Section 23(4)33 cannot bite, as it works in a procedural vacuum. Institutions do not track the six- month rule or impose consequences in the event of a delay, making the rule more of a formality. The above could be realised by importing best practices experienced in other institutions across the globe.

• Id. § 23(4).

• Id. § 23(4).

• Arbitration and Conciliation Act, No. 26 of 1996, § 23(4) (India).

• International Chamber of Commerce, ICC Rules of Arbitration art. 24 (2021), https://iccwbo.org/dispute-resolution-services/arbitration/rules-of- arbitration/.

• Singapore Int’l Arb. Ctr., SIAC Rules, rr. 16–17 (6th ed. 2016), https://siac.org.sg/our-rules/.

• Id. § 23(4).

Pleadings delay is not a procedural den of delay, it is corrosive. It destroys even the chronology which arbitration tries to preserve; clarity, speed, and finality. Failure to file pleadings in the required time may cause the whole process of arbitral to become ineffective.

The first and foremost is an increase in costs. Extensions cause; higher counsel fees, arbitrator sitting, and administration costs, and discredit economically weak parties disproportionately. With the recent direction that the Delhi High Court in Emco Ltd. v. Delhi Transco Ltd. (2024)34 that the timeframe provided under Section 29A35 to compulsorily file arbitral proceedings will only start once pleadings have been finalized under Section 23(4)36 further shifts arbitral timeframe into a grey area.

The delays are oftentimes not accidental, rather an instrument that is tactically employed in an attempt to delay claims or to frustrate proceedings. This happens especially in complicated business controversies. At the same time, the quality of evidence degrades, memories degrade, institutional memory is lost and chains of documents are forgotten. The end result of all this is the undermining of the arbitral record. This kind of delayed decision is detrimental even to the credibility of arbitration and the arbitration process as a whole. When the parties and tribunal are unable to ensure discipline at the pre-trial phase of pleadings, the wider promise of arbitration as a time-limited substitution of litigation is not far-fetched.

Section 23(4)37 must be accorded a binding force. The reforms should have a statutory requirement of issuing Procedural Order No. 1 at the outset, absolute deadlines on pleadings and cost or procedural sanctions to be imposed on obstinate non-compliances. Notably, the Expert Committee on Arbitration Law, chaired by Justice T.K. Vishwanathan, in its February 2024 Report, recommended the adoption of a model procedural framework to be applied by default in ad hoc arbitrations. This framework aimed to instil uniformity and discipline in early-stage arbitration timelines38. However, the Draft Arbitration and Conciliation (Amendment) Bill, 2024, has not incorporated this recommendation, leaving a significant legislative omission that continues to weaken the enforceability of Section 23(4)39.

In the absence of such reforms, enforcement has to be dependent on arbitral tribunals and the

judiciary. Until a legislative backbone is provided, the effectiveness of Section 23(4)40 remains

• Emco Ltd., supra note 26.

• Arbitration and Conciliation Act, § 29A, supra note 3.

• Arbitration and Conciliation Act, § 23(4), supra note 2.

• Id. § 23(4).

• Expert Committee to Examine the Working of Arbitration Law, Report (Feb. 2024) (India), excerpts published in Year in Arbitration 2024: Reset or Rewind?, Kluwer Arb. Blog (Feb. 15, 2025).

• Draft Arbitration & Conciliation (Amendment) Bill, 2024 (India), § 5.

• Id. § 23(4).