Substitution of sole arbitrator warranted once mandate ends: SC
The Supreme Court of India has recently made a significant ruling regarding the substitution of a sole arbitrator in arbitration proceedings. The Court has held that the substitution of a sole arbitrator is warranted when their mandate ceases to exist. This judgment has far-reaching implications for arbitration proceedings in India and is expected to bring clarity and certainty to the process.
The Supreme Court’s decision was made in the case of Mohan Lal Fatehpuria v. MS Bharat Textiles & Ors. (2025 INSC 1409), where the Court explained that on the expiry of the initial or extended period, the arbitrator cannot proceed, and their mandate terminates, subject to a court order passed in a proceeding under Section 29A(4) of the Arbitration and Conciliation Act. This means that once the arbitrator’s mandate comes to an end, they no longer have the authority to continue with the arbitration proceedings, and a new arbitrator must be appointed to take their place.
The Arbitration and Conciliation Act, 1996, is the primary legislation governing arbitration in India. The Act provides for the appointment of arbitrators, the conduct of arbitration proceedings, and the enforcement of arbitration awards. Section 29A(4) of the Act deals with the termination of the arbitrator’s mandate and provides that the mandate of the arbitrator shall terminate if the arbitrator fails to deliver the final award within the specified period.
The Supreme Court’s decision in this case is important because it clarifies the position of law regarding the substitution of a sole arbitrator. The Court has made it clear that once the arbitrator’s mandate ceases to exist, they cannot continue with the arbitration proceedings, and a new arbitrator must be appointed. This ensures that the arbitration proceedings are conducted in a fair and impartial manner and that the parties to the dispute have confidence in the process.
The substitution of a sole arbitrator is a critical aspect of arbitration proceedings. The arbitrator plays a crucial role in resolving disputes between parties, and their impartiality and independence are essential to the fairness and integrity of the process. When an arbitrator’s mandate ceases to exist, it is essential to appoint a new arbitrator to ensure that the proceedings are conducted in a fair and transparent manner.
The Supreme Court’s decision is also significant because it highlights the importance of adhering to the timelines specified in the Arbitration and Conciliation Act. The Act provides for specific timelines for the completion of arbitration proceedings, and the Court has made it clear that these timelines must be adhered to. This ensures that arbitration proceedings are conducted in an efficient and timely manner, which is essential for the resolution of disputes between parties.
In conclusion, the Supreme Court’s decision in the case of Mohan Lal Fatehpuria v. MS Bharat Textiles & Ors. (2025 INSC 1409) is a significant development in the law of arbitration in India. The Court has made it clear that the substitution of a sole arbitrator is warranted when their mandate ceases to exist, and this decision is expected to bring clarity and certainty to the arbitration process. The decision highlights the importance of adhering to the timelines specified in the Arbitration and Conciliation Act and ensures that arbitration proceedings are conducted in a fair, transparent, and efficient manner.
The implications of this decision are far-reaching, and it is expected to have a significant impact on arbitration proceedings in India. The decision is likely to lead to a reduction in delays and uncertainties in arbitration proceedings, which is essential for the resolution of disputes between parties. It is also expected to promote confidence in the arbitration process, which is critical for the effective resolution of disputes.
Overall, the Supreme Court’s decision is a welcome development in the law of arbitration in India. It provides clarity and certainty to the arbitration process and ensures that arbitration proceedings are conducted in a fair, transparent, and efficient manner. The decision is expected to have a significant impact on arbitration proceedings in India and is likely to promote the use of arbitration as a means of resolving disputes between parties.
About the Author
