Substitution of Sole Arbitator Warranted Once Mandate Ends: SC
The Supreme Court of India has 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 ruling has far-reaching implications for the arbitration process and provides clarity on the circumstances under which a sole arbitrator can be substituted.
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. In such cases, the substitution of the sole arbitrator is necessary to ensure that the arbitration process can continue uninterrupted.
The ruling is based on the principle that an arbitrator’s mandate is limited to a specific period, and once that period expires, their authority to act as an arbitrator also comes to an end. The Court emphasized that the arbitrator’s mandate is not indefinite and that it is subject to the provisions of the Arbitration and Conciliation Act.
The implications of this ruling are significant, as it provides clarity on the circumstances under which a sole arbitrator can be substituted. It also highlights the importance of ensuring that the arbitration process is conducted in a fair and efficient manner. The substitution of a sole arbitrator can be a complex process, and the Court’s ruling provides guidance on how to navigate this process.
The Court’s ruling is also consistent with the principles of natural justice, which require that parties to an arbitration have a fair and impartial hearing. The substitution of a sole arbitrator can be necessary to ensure that the arbitration process is fair and unbiased. The Court’s ruling recognizes the importance of ensuring that the arbitration process is conducted in a manner that is consistent with the principles of natural justice.
The Arbitration and Conciliation Act provides a framework for the conduct of arbitration proceedings in India. The Act sets out the procedures for the appointment of arbitrators, the conduct of arbitration proceedings, and the enforcement of arbitration awards. The Act also provides for the substitution of arbitrators in certain circumstances, including when an arbitrator’s mandate ceases to exist.
The Court’s ruling is a significant development in the field of arbitration law in India. It provides clarity on the circumstances under which a sole arbitrator can be substituted and highlights the importance of ensuring that the arbitration process is conducted in a fair and efficient manner. The ruling is also consistent with the principles of natural justice and recognizes the importance of ensuring that parties to an arbitration have a fair and impartial hearing.
In conclusion, the Supreme Court’s ruling on the substitution of a sole arbitrator is a significant development in the field of arbitration law in India. The ruling provides clarity on the circumstances under which a sole arbitrator can be substituted and highlights the importance of ensuring that the arbitration process is conducted in a fair and efficient manner. The ruling is consistent with the principles of natural justice and recognizes the importance of ensuring that parties to an arbitration have a fair and impartial hearing.
The full details of the case can be found at the following url:
https://www.verdictum.in/court-updates/supreme-court/mohan-lal-fatehpuria-v-ms-bharat-textiles-ors-2025-insc-1409-substitution-sole-arbitrator-mandate-ceases-exist-1600780
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