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Civil · Reportable judgment

Mohan Lal Fatehpuria vs M/s Bharat Textiles & Ors.

Court
Supreme Court of India
Date
10 December 2025
Case No.
Civil Appeal No. 14681 of 2025
Result
Allowed
Bench
Sanjay Kumar
Citation
[2025] 12 S.C.R. 408 : 2025 INSC 1409
Acts & Sections
Arbitration and Conciliation Act, 1996
Supreme Court Reports [2025] 12 S.C.R. 408 : 2025 INSC 1409
Issue for consideration
Issue arose as regards the correctness of the order passed by the High Court declining substitution of a sole arbitrator, however, extending his mandate u/s.29A(6) of the Arbitration and Conciliation Act, 1996.
Headnote

Arbitration and Conciliation Act, 1996 – s.29A(6) – Substitution of a sole arbitrator – On facts, the sole arbitrator issued directions requiring the parties to deposit the administrative expenses – Appellants sought time, in an arbitral proceeding, to move an application before the High Court u/s.29A(4) – Thereupon, the sole arbitrator adjourned the proceeding sine die – Appellants then filed petitions u/s. 29A(6) seeking substitution of the sole arbitrator and extension of tenure for the substitute arbitrator – High Court declined substitution of a sole arbitrator, however extended his mandate u/s.29A(6) for a further period – Correctness:

Held: Substitution of a sole arbitrator is warranted, when his mandate ceases to exist, to effectuate the object of the Act, which mandates expeditious resolution of the dispute – In view of mandate contained in s.29A(1), the sole Arbitrator was under an obligation to pass an award within a period of one year from 01.03.2022, i.e. on or before 28.02.2023 – However, the sole Arbitrator failed to do so – Parties did not apply for extension of period to pass an award – Sole arbitrator in view of mandate contained in s.29A(4) became functus officio – Mandate of the sole Arbitrator terminated on 28.02.2023 – When mandate of arbitrator has expired, his continuation is impermissible – s.29A(6) empowers and obligates the Court to substitute the Arbitrator – In view thereof, the case warranted the exercise of jurisdiction u/s.29A(6) – High Court erred in granting an extension when the mandate of the sole arbitrator had ceased to exist – Impugned order quashed and set aside – Mandate of sole arbitrator terminated by operation of law – Former Judge of the High Court appointed as the substituted sole arbitrator. [Paras 11, 13, 14]

Keywords: Substitution of sole arbitrator · Time limit for arbitral award · Deposit administrative expenses · Tenure for the substitute arbitrator

As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Nidhi Jain. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

Judgment Alok Aradhe, J. 1. Leave granted. 2. These appeals are filed against an order dated 22.04.2025 by Delhi High Court by which it has declined substitution of a sole arbitrator but has extended his mandate under Section 29A(6) of the Arbitration and Conciliation Act, 1996 (hereinafter, referred to as the ‘Act’) for a further period of four months. FACTS 3. The appellants who are husband and wife, along with respondent nos. 2 to 4 executed a partnership deed dated 18.05.1992 which contained an arbitration clause. M/s. Bharat Textiles namely, respondent no.1, was registered on 05.01.2
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