Case Note & Summary
The case involves a dispute arising out of a Deed of Assignment of Development Rights dated 6 December 2010 between the applicants (Nalin Vallabhbhai Patel and Another) and the respondents (Atharva Realtors and Others). The applicants had earlier filed a Section 9 petition (Commercial Arbitration Petition No. 1310 of 2019) seeking interim measures, which was converted into a Section 17 application, and a sole arbitrator was appointed on 14 November 2019. The arbitrator passed an interim order on 31 August 2020 but thereafter the proceedings stalled. The applicants filed a petition under Section 29A (Commercial Arbitration Petition No. 221 of 2024) seeking extension of the arbitrator's mandate, which was refused by the Bombay High Court on 18 October 2024 on the ground that the applicants had abandoned the proceedings. The Supreme Court dismissed the Special Leave Petition against that order on 14 February 2025. Subsequently, the applicants issued a notice on 10 July 2025 demanding appointment of a new arbitrator, and when the respondents did not consent, filed the present application under Section 11(6) of the Arbitration and Conciliation Act, 1996. The respondents opposed the application, arguing that the refusal to extend the mandate had terminated the arbitral proceedings and that a fresh appointment was impermissible. The court analyzed the distinction between termination of an arbitrator's mandate under Section 29A and termination of arbitral proceedings under Section 32 of the Act. It held that refusal to extend the mandate does not bring the proceedings to an end; the arbitration agreement survives and the dispute remains unresolved. The court also noted that the earlier order did not record a finding of abandonment under Section 25(a) and that mere delay does not constitute abandonment. The court allowed the application and appointed a sole arbitrator to adjudicate the disputes, subject to the arbitrator's consent and disclosure requirements under Section 11(8) and Section 12 of the Act.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11, Section 29A Arbitration and Conciliation Act, 1996 - Refusal to Extend Mandate - The Court considered whether a refusal to extend the mandate of an arbitrator under Section 29A terminates the arbitral proceedings and bars a fresh appointment under Section 11. Held that refusal to extend mandate does not terminate the proceedings; a fresh appointment under Section 11 is permissible as the arbitration agreement survives and the dispute remains unresolved. (Paras 1, 5, 10-12) B) Arbitration Law - Termination of Arbitral Proceedings - Section 32 Arbitration and Conciliation Act, 1996 - Distinction between Termination of Mandate and Termination of Proceedings - The Court distinguished between termination of an arbitrator's mandate under Section 29A and termination of arbitral proceedings under Section 32. Held that only Section 32 enumerates grounds for termination of proceedings; refusal to extend mandate does not fall under those grounds. (Paras 8-10) C) Arbitration Law - Abandonment of Proceedings - Section 25(a) Arbitration and Conciliation Act, 1996 - Inaction by Claimant - The Court examined whether the applicants' inaction amounted to abandonment. Held that mere delay or inaction does not constitute abandonment under Section 25(a) unless the respondent demonstrates prejudice; the earlier order refusing extension did not record abandonment as a finding. (Paras 2, 4, 11)
Issue of Consideration
Whether refusal by the Court to extend the mandate of an arbitrator under Section 29A of the Arbitration and Conciliation Act, 1996 brings an end to the arbitral proceedings, making it impermissible to appoint another arbitrator under Section 11 of the Act to decide the same dispute.
Final Decision
The Court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties, subject to the arbitrator's consent and compliance with Section 11(8) and Section 12 of the Arbitration and Conciliation Act, 1996.
Law Points
- Refusal to extend arbitrator's mandate under Section 29A does not terminate arbitral proceedings
- Section 11 appointment is permissible after mandate expiry
- Distinction between termination of mandate and termination of proceedings
- No bar equivalent to Order IX Rule 9 CPC in arbitration
