Fast Track Procedure: Section 29B

Section 29B, inserted by the Amendment Act of 2015, allows parties to agree that their dispute will be decided on documents within six months. The tribunal is a sole arbitrator in most cases, there is no oral hearing unless all the parties ask for one or the tribunal needs clarification, and the fees are fixed by agreement rather than by a schedule. The provision is the Act's answer to the small and medium commercial dispute, where the cost and delay of a conventional reference are out of proportion to the amount at stake.

1. The Provision

The sequence, the cases it suits, and the requirement that survives

2. How the Procedure Is Adopted

1. By written agreement. The agreement must be in writing. It may be contained in the arbitration clause, or made later, but not later than the time of appointment of the tribunal, so a reference already under way on the ordinary procedure cannot be converted under this section.
2. By all the parties. The section speaks of the parties agreeing. One party cannot elect into the fast track, and a tribunal cannot impose it.
3. Optionally, a sole arbitrator. Sub-section (2) permits, but does not require, the parties to agree that the tribunal shall consist of a sole arbitrator chosen by them. In practice this is the usual arrangement, since a three-member tribunal deciding on documents within six months gives up much of the saving the procedure is meant to produce.
4. With fees agreed. Sub-section (6) leaves the fees and the manner of payment to agreement between the arbitrator and the parties, so the Fourth Schedule model fee structure does not govern a fast track reference. The fee should be settled in writing before the reference begins.

3. The Six-Month Clock

The period runs from the date the tribunal enters upon the reference, which the Explanation to Section 29A(1) defines as the date on which the arbitrator, or all the arbitrators, have received notice in writing of their appointment. This differs from the ordinary rule in Section 29A(1), where the twelve-month period runs from the date of completion of pleadings under Section 23(4). The fast track clock therefore starts earlier and the pleadings must be completed within the six months rather than before they begin.

Where the award is not made in time, sub-sections (3) to (9) of Section 29A apply. The parties may by consent extend the period by up to six months. Beyond that the mandate terminates unless the court extends it for sufficient cause, and on such an application the court may reduce the fees of an arbitrator by up to five per cent for each month of delay attributable to the tribunal, substitute one or all of the arbitrators, and impose actual or exemplary costs. An application for extension is maintainable even after the period has expired, following Rohan Builders (India) (P) Ltd. v. Berger Paints India Ltd., 2024 INSC 686.

4. The Procedure in Practice

• Documents only is the default. The tribunal decides on written pleadings, documents and submissions. An oral hearing is the exception, permitted where all the parties request one or the tribunal considers it necessary for clarifying certain issues.
• The tribunal may call for more. Sub-section (3)(b) allows it to seek further information or clarification, which is how a documents-only reference deals with a gap in the record without converting itself into a hearing.
• Technical formalities may be dispensed with. Where a hearing is held, the tribunal may adopt whatever procedure it considers appropriate for expeditious disposal.
• A timetable at the outset. Since there is no hearing to structure the reference, the first procedural order should fix dates for the statement of claim, the defence and counterclaim, the reply, document production and written submissions, leaving time within the six months for deliberation and the award.

5. Fast Track Compared with the Ordinary Procedure

6. When to Choose It, and When Not

The procedure suits a dispute in which the facts are largely documented and the issues are narrow: a claim for the price of goods delivered, a dispute about the computation of an instalment or an escalation, a question of construction of a clause, or a claim where the amount is modest enough that a full reference would cost more than it recovers. It is unsuitable where the credibility of witnesses is in issue, where the facts are disputed at length, where expert evidence must be tested, or where the amount is large enough that both sides will want to argue the case fully. A party who accepts the fast track in such a case gives up the hearing it will later wish it had.

A practical middle course is to provide in the clause that the fast track procedure applies to claims below a stated value, and the ordinary procedure above it. Institutional rules take the same approach through expedited procedures triggered by the amount in dispute or by the consent of the parties, and where an institution is named its expedited rules may serve the purpose without invoking Section 29B at all.

7. Drafting Points

• Record the agreement to the fast track in writing, and do it in the clause or before the tribunal is appointed.
• Provide for a sole arbitrator and, if possible, name the appointing institution so that the appointment itself does not consume the six months.
• Settle the fees and their manner of payment at the outset, since Section 29B(6) leaves them entirely to agreement.
• State whether the parties waive an oral hearing altogether, or preserve the right to request one jointly.
• Fix the seat, the language and the timetable in the same clause, so that nothing is left to be negotiated after the dispute has arisen.

8. Related Topics and Provisions