MOHAN LAL FATEHPURIA v. M/S BHARAT TEXTILES
Substitution of Arbitrator under Section 29A(6): Supreme Court clarifies the power and obligation of the Court when the arbitrator's mandate has expired under the Arbitration and Conciliation Act, 1996.
Court: Supreme Court of India
Citation: 2025 INSC 1409
Decision Date: 10-12-2025
List of Laws
The Arbitration and Conciliation Act, 1996; Section 29A of the Arbitration and Conciliation Act, 1996
- Facts: A partnership deed containing an arbitration clause was executed between the appellants (husband and wife) and respondents. Disputes arose, and the High Court appointed Mr. Anjum Javed as the sole arbitrator. The arbitrator directed parties to deposit administrative expenses, which was challenged by the respondents. The arbitrator adjourned the proceedings sine die after the appellants sought time to move an application before the High Court under Section 29A(4) of the Arbitration and Conciliation Act, 1996.
- Procedural Posture: The appellants filed petitions under Section 29A(6) of the Act seeking substitution of the sole arbitrator and extension of tenure. The Delhi High Court declined the substitution but extended the arbitrator's mandate for four months. The appellants appealed this order to the Supreme Court.
- Issue: Did the High Court err in extending the mandate of the sole arbitrator when the arbitrator's mandate had already terminated under Section 29A of the Arbitration and Conciliation Act, 1996, and should the arbitrator be substituted?
- Holding: Yes, the High Court erred. The Supreme Court quashed the High Court's order, terminated the mandate of the existing arbitrator, and appointed a substitute arbitrator.
- Reasoning: The Court noted that Section 29A aims for the timely disposal of arbitration proceedings. The sole arbitrator's mandate had terminated on 28.02.2023, as the award was not passed within the stipulated time, even after excluding the period affected by the COVID-19 pandemic. While Section 29A(6) empowers the court to substitute the arbitrator while extending the period, the High Court erred in extending the mandate of an arbitrator whose mandate had already ceased. The Court emphasized that when the mandate of an arbitrator expires, their continuation is impermissible, and substitution is warranted to effectuate the object of expeditious dispute resolution. The Court stated, "Section 29A(6) empowers and obligates the Court to substitute the Arbitrator".
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