Facts: The Applicants, successors-in-interest to Tata Motors Ltd, entered into Dealership Agreements with Respondent No. 1 in 2012 and 2013. Following disputes over outstanding payments exceeding Rs. 20 Crores, arbitration was invoked in 2016 through the Bombay Chamber of Commerce & Industry (BCCI). A sole arbitrator was appointed, but he withdrew from the reference on 18 March 2021 due to ill health. The Applicants requested BCCI for a substitute arbitrator, but none was appointed. The Applicants subsequently filed petitions for extension of mandate under Section 29A and for substitution under Sections 14 and 15 of the Arbitration and Conciliation Act. On 2 July 2025, the High Court granted liberty to the Applicants to pursue the remedy under Section 11 of the Act. Consequently, the present applications were filed for the appointment of a substitute arbitrator.
Procedural Posture: The case reached the Bombay High Court as original commercial arbitration applications under Section 11 of the Arbitration and Conciliation Act, 1996, following the withdrawal of a previously appointed arbitrator and the failure of the designated institution to appoint a substitute.
Issue: Whether the application for appointment of a substitute arbitrator under Section 11 is barred by limitation under Article 137 of the Limitation Act, and whether the benefit of Section 14 and Section 5 of the Limitation Act can be extended to condone the delay.
Holding: Yes, the application is maintainable. The Court condoned the delay and appointed a substitute arbitrator, holding that technicalities should not prevail over the adjudication of the reference when the parties have diligently pursued their remedies.
Reasoning: The Court reasoned that there is a distinction between the termination of an arbitrator's mandate (Sections 14/15) and the termination of arbitral proceedings (Section 32). Withdrawal of an arbitrator results in a vacancy but not the end of the proceedings. While Article 137 of the Limitation Act applies to Section 11 applications (prescribing a three-year period), the Applicants were entitled to the exclusion of time under the Supreme Court's COVID-19 extension orders and the exclusion of time under Section 14 of the Limitation Act for the period spent bonafide prosecuting the Section 29A and Section 14/15 petitions. Furthermore, following "HPCL Bio-Fuels Ltd. v/s. Shahaji Bhanudas Bhad", the Court held that delay in Section 11 applications is condonable under Section 5 of the Limitation Act even without a formal condonation application, provided the facts warrant such exercise of discretion.