Full Judgment Text
$~O-54
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (T) (COMM.) 71/2025
Date of Decision: 03.09.2025
IN THE MATTER OF:
M/s P M PROJECTS AND SERVICES
PRIVATE LIMITED
HAVING ITS OFFICE AT: 30-B, INDUSTRIAL AREA,
RAU-PITHAMPUR ROAD, INDORE - 453331,
MADHYA PRADESH .....PETITIONER
Through: Mr. Saurajay Nanda, Ms. Mehak
Joshi and Ms. Raadhika Chawla,
Advs.
versus
BEN AND GAWS PRIVATE LIMITED
HAVING ITS OFFICE AT:
E 48/9 MILLENIUM, OKHLA
INDUSTRIAL AREA, PHASE-II,
NEW DELHI - 110020. .....RESPONDENT
Through: Ms. Apeksha Lodha and Mr. Prajjwal
Gour, Advs.
CORAM:
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV
J U D G E M E N T
PURUSHAINDRA KUMAR KAURAV, J. (ORAL)
1. The controversy involved in the present matter would indicate that the
Petitioner/Claimant herein, M/s PM Projects & Services Pvt. Ltd. (“the
Petitioner”), had earlier filed a petition under Section 11(5) of the
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
Signing Date:10.09.2025
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O.M.P. (T) (COMM.) 71/2025 Page 1 of 15
Arbitration and Conciliation Act, 1996 (“Act of 1996”) seeking appointment
of a sole arbitrator to adjudicate disputes arising out of an Indemnity Bond
dated 26.03.2021 executed by the Respondent in favour of the Petitioner.
2. It is seen that the Indemnity Bond dated 26.03.2021 contains an
arbitration clause which provides that “in case of any dispute arising under
this undertaking, the same shall be referred to a sole arbitrator mutually
chosen by PMPS and B&G, for fast-track procedure arbitration under
Section 29B of the Arbitration and Conciliation Act, 1996.” The Indemnity
Bond appears to be duly stamped.
3. The Petitioner is a private limited company incorporated under the
Companies Act, with its registered office at 30-B, Industrial Area, Rau-
Pithampur Road, Indore, Madhya Pradesh, engaged in the manufacture and
export of industrial process equipment and plant machinery.
4. The Respondent is a private limited company incorporated under the
Companies Act, 2013, having its headquarters at E-48/9 Millennium, Okhla
Industrial Area, Phase-II, New Delhi, engaged in the manufacture of storage
tanks and grain storage silos.
5. The parties originally entered into a Dealer Agreement dated
04.12.2018 under which the Petitioner was appointed dealer for the
Respondent for the territory of Indore, Madhya Pradesh. Pursuant to
enquiries by M/s Avi Agri Business Limited for supply, installation, and
commissioning of hopper-bottom silos at Ujjain, the Respondent quoted for
the work, negotiations and site inspections followed, and Avi Agri placed an
order through the Petitioner specifying the Respondent as manufacturer.
6. The Petitioner placed purchase orders on the Respondent for supply
and installation (P.O. No. 2PO2000118 dated 19.06.2020 for Rs.
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
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77,08,050/– P.O. No. 2PO2000869 dated 04.12.2020 for Rs. 5,42,800/–).
7. The scope under the purchase orders included design, engineering,
manufacture, supply, erection, installation, commissioning, warranty, and
after-sales services. The Petitioner is stated to have made advance payments
amounting to approximately 85% of the invoice value (Rs. 66,00,000/–) by
31.10.2020. Despite repeated follow-ups, the Respondent allegedly failed to
supply material and mobilise installation teams in a timely manner; the work
progressed slowly and remained incomplete. In March 2021 the parties
agreed to time-bound milestones, and the Petitioner provided commercial
security by issuing a post-dated cheque dated 31.05.2021 for Rs.16,50,850/-;
this arrangement was evidenced by the Indemnity Bond dated 26.03.2021.
8. The case of the Petitioner seems to be that the Respondent wrongfully
presented and sought to encash the post-dated cheque on 27.08.2021,
resulting in a legal notice under Section 138, N.I. Act, dated 02.09.2021.
9. The Petitioner replied on 12.09.2021, denying any liability on the
ground that the preconditions for presentment (completion, joint inspection,
and issuance of stability certificate) had not been satisfied and appended the
Indemnity Bond to its reply.
10. Thereafter, defects and deficiencies in workmanship and materials
were notified to the Respondent. Specific complaints recorded on the file
include leakage during rains, alleged non-compliance with applicable IS
codes, and use of sub-standard materials and malfunctioning of
control/temperature monitoring systems.
11. On 06.09.2022, the Petitioner and its Director received summons in
complaint proceedings initiated by the Respondent under Section 138, N.I.
Act in relation to the said cheque.
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
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12. The Petitioner contends that such proceedings are mala fide and
unsustainable given the non-completion and defective execution of the
contract and reserves its rights in that regard.
13. By notice dated 17.01.2023 under Section 21 of the Arbitration and
Conciliation Act, 1996, the Petitioner invoked arbitration in terms of Clause
6 of the Indemnity Bond and proposed appointment of a sole arbitrator
through the Delhi International Arbitration Centre (DIAC).
14. Pursuant to the Section 21 notice dated 17.01.2023, the Section 11(5)
petition for the appointment of the sole arbitrator was filed, and vide order
dated 04.12.2023, in ARB. P. 926/2023, this Court found that the arbitral
dispute had arisen between the parties and thus appointed a sole Arbitrator.
15. Subsequently, when the arbitration proceedings were taken up, the
sole Arbitrator, however, vide order dated 28.03.2025, recused himself from
the matter for the reasons stated therein.
16. The recusal order records that the arbitrator had received an advance
application under Section 14 of the Act of 1996, containing allegations
against the Tribunal that procedural orders are not being supplied to both
parties. Against the same, the Tribunal noted that procedural orders had
indeed been issued to both parties and that the Tribunal was not guilty of
any professional misconduct or “window dressing” during the arbitration;
and that the averments made in the Section 14 application were unfounded,
contrary to the factual matrix, and appeared to be aimed at delaying the
statutory timelines. Notwithstanding these observations, the Tribunal
expressed its unwillingness to continue and accordingly recused, leaving the
parties to pursue such lawful remedies as may be available to them. The said
order of the Tribunal reads as under:-
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
Signing Date:10.09.2025
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“ ORDER
28.03.2025
Present: None for the parties
I have taken up the matter today, pursuant to an advance Notice
received by the undersigned from Mr. Prajjwal Gaur, Advocate alongwith
an application under Section 14 of the Arbitration & Conciliation Act,
1996, wherein, unfounded allegations have been leveled against the
Arbitrator.
The procedural orders were being sent to both the parties, the
Arbitrator was not guilty of any professional misconduct/ window dressing
during the course of Arbitration Proceedings, the averments made by the
Respondent in the said petition are otherwise unfounded, contrary to
factual matrix and were made in order to delay the timelines of the
Arbitration & Conciliation Act, 1996, which were being informed to both
the parties.
Be that as it may, the undersigned is not willing to continue as an
Arbitrator in the matter and hence forth, Recuse himself from the matter,
the parties may resort to lawful remedies available to them, as per law .”
17. It is under the aforesaid circumstances, the petitioner has approached
this Court under Section 15 of the Act of 1996, and for the appointment of a
substitute sole Arbitrator following the withdrawal of the sole Arbitrator.
18. On notice being issued vide order dated 08.08.2025, the reply has
been filed by the respondents, wherein an objection has been raised that the
instant petition is not maintainable under Section 15, and instead, the
petitioner has to follow the similar procedure as was envisaged before taking
up the initial Petition Section 11(6).
19. It is the case of the respondent that, as per the rules applicable for
appointment, the petitioner has to initiate proceedings by invoking Clause 6
of the Indemnity Bond dated 26.03.2021.
20. In order to substantiate the aforesaid submission, reliance is placed on
a decision of the Supreme Court in the case of Yashwith Constructions (P)
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
Signing Date:10.09.2025
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1
Ltd. vs. Simplex Concrete Piles India Ltd. and Anr ; the decision of this
Court in the case of M/s Raj Chawla and Co. Stock Share Brokers v. M/s
2
Nine Media and Information Services Ltd. & Anr. ; and another decision
3
in the case of Mother Bood Foods Pvt. Ltd. v. Ready Roti India Pvt. Ltd .
It is also contended that the decision passed in the case of M/s Raj Chawla,
has not been interfered with by the Supreme Court in SLP bearing no.
5071/2023 and vide order dated 27.03.2023, the SLP has been dismissed.
21. Learned counsel for the petitioner, however, opposes the aforesaid
contention, and he submits that the decision relied upon by learned counsel
for the respondent has no application under the facts of the present case. He
submits that the issue in hand has been conclusively decided by this Court in
4
Mithlesh Kumar Aggarwal v. Athena Infrastructure Ltd ., GMR Ambala
Chandigargh Expressesways Ptv. Ltd. v. National Highway Authority of
5 6
India & Ors. ; Tricolor Hotels Ltd. v. Dinesh Jain , and decision of the
High Court of Calcutta in the case of Ramjee Power Construction Ltd. v.
7
Damodar Valley Corporation , and the decision of the Bombay High Court
8
in the case of SAP India Private Limted v. Cox & Kings Limited .
22. He, therefore, contends that the Court will have to draw a distinction
between an Arbitrator who is substituted on recusal or for any reason by the
Court, and an Arbitrator who was initially appointed in terms of the Rules
and mechanism provided in the agreement.
1
(2006) 6 SCC 204
2
2023 SCC OnLine Del 520
3
2024 SCC OnLine Del 4616
4
2017 SCC OnLine Del 7875
5
2018 SCC OnLine Del 7588
6
2022 SCC OnLine Del 3717
7
2009 SCC OnLine Cal 321
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
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23. I have heard learned counsel for the parties and perused the record.
24. The facts which remain undisputed in the instant case is that the
Arbitrator has been appointed by this Court in exercise of power under
Section 11(6) of the Act of 1996.
25. The Court, while appointing the arbitrator, has taken note of the fact
that the parties failed to appoint the arbitrator by consent in terms of Clause
6 of the Indemnity Bond dated 26.03.2021.
26. It also remains undisputed that the Arbitrator appointed by the Court
had recused vide proceedings dated 28.03.2025.
27. The sole question that arises for consideration is whether, under the
facts of the present case, the petitioner has to initiate proceedings as
envisaged under Clause 6 of the Indemnity Bond dated 26.03.2021, or to
seek for the substitution in terms of Section 15 of the A&C Act.
28. If the decisions relied upon by learned counsel for the parties are
examined in their proper perspective, particularly the case of Mithlesh
Kumar Aggarwal , this Court observed that the Arbitrator therein had been
appointed pursuant to a petition under Section 11 of the Act of 1996.
29. Since the parties had forfeited their contractual right to appoint an
Arbitrator, the Court exercised its power under Section 11 to make the
appointment. In those circumstances, the decision of the Supreme Court in
Yashwith Constructions (P) Ltd . was considered but distinguished, and the
Arbitrator was substituted in exercise of the power of the Court under
Section 15(2) of the Act. The Court drew a clear distinction between cases
where arbitration proceedings are initiated under the mechanism stipulated
in the agreement itself, and cases where proceedings are commenced
8
2019 SCC OnLine Bom 722
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
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pursuant to an appointment made by the Court under Section 11 of the Act.
30. The paragraph nos. 5 to 9 of the said decision in the case of Mithlesh
Kumar Aggarwal is reproduced as under:-
“ 5. Mr Datta, learned Senior Counsel appearing for the respondent does
not dispute that an arbitrator is be appointed in place of late Justice S.K.
Mahajan (Retired). He, however, submits that as per the agreement, the
respondent must be given an opportunity to re-appoint an arbitrator in
place of late Justice S.K. Mahajan. This Court is unable to accede to the
aforesaid submission principally for the reason that late Justice S.K.
Mahajan (Retired) was appointed by this Court in a petition under Section
11 of the Act, since the respondent had forfeited its right to appoint an
arbitrator.
6. The Supreme Court in Yashwith Constructions (P) Ltd. v. Simplex
Concrete Piles India Ltd. and Anr.: (2006) 6 SCC 204 had interpreted
Section 15(2) of the Act liberally and had explained that the provision
applicable for appointment of the substitute arbitrator would be the same
as "at the initial stage". Thus, the expression "rules" in Section 15(2) of
the Act, was read to imply that the same procedure which was applicable
for appointment of an arbitrator, who is sought to be substituted, would be
applicable for appointment of the substitute arbitrator.
7. In The Chhotanagpur Regional Handloom v. Association of
Corporation and Apex: Manu/DE/2600/2008 , a Coordinate Bench of this
Court while considering the applicability of the provisions of Section 15(2)
of the Act in context of the petition filed under Section 14 of the Act,
rejected the contention that after the mandate of the arbitral tribunal was
declared as terminated under Section 14 of the Act, the parties were to be
relegated to start the process under the original agreement and this Court
ought not to proceed to appoint a substitute arbitrator. The Court referred
to the decision of the Supreme Court in Yashwith Constructions (supra)
and held that Section 15(2) of the Act has to be viewed as a part of a
broader effort to strengthen the alternative dispute resolution mechanism
rather than undermine it. Relegating the parties to commence the process
once again may lead to confusion and may in certain circumstances
compel one of the parties to again approach the Court under Section 11(6)
of the Act which could not be the legislative intent. The Court held that
Section 15(2) required the Court to appoint an arbitrator as a logical
sequitur to Section 14 of the Act.
8. In Ramjee Power Construction Ltd. v. Damodar Valley Corporation:
(2009) 2 Arb LR 625 , the Calcutta High Court considered the decision of
the Supreme Court in Yashwith Construction (supra) and observed as
under:-
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KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
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"As observed above, the expression "rules that were applicable to
the appointment of the arbitrator being replaced" in section 15,
have carefully been chosen. If the arbitrator being replaced was
appointed by the Chief Justice and/or his designate in accordance
with section 11 of the 1996 Act read with the applicable rules, the
substitute arbitrator would also have to be appointed by the Chief
Justice and/or his designate in the same manner."
9. The Calcutta High Court following the decision of the Supreme Court
in Datar Switchgears Ltd. v. Tata Finance Ltd. and Anr.: (2002) 8 SCC
151 , held that once an application under Section 11 was made, the right of
either party to appoint an arbitrator stood extinguished. In view of the
aforesaid, the Court reasoned that if the arbitrator is appointed in
accordance with Section 11 of the Act, the substitute arbitrator would also
have to be appointed in the same manner. This Court respectfully concurs
with the aforesaid view.”
31. Similarly, in GMR Ambala Chandigarh , this Court took note of the
decision of the Supreme Court in Yashwith Constructions (P) Ltd , along
with other applicable precedents, and in paragraph 14 applied the same
distinction. It was held that where a party fails to appoint or nominate its
arbitrator, the Court is required to make such appointment under Section
11(6) of the A&C Act, and any subsequent substitution of the arbitrator must
be effected by the same authority, namely, the High Court.
32. An almost similar position has been taken by this Court in the case of
Tricolor Hotels Limited . The relevant paragraphs of the said decision are
reproduced as under:-
“ 26. It is settled law that the procedure for substitution of an arbitrator
under Section 15 of the Act must be the same as the initial appointment of
the said arbitrator, who is sought to be substituted. Section 15 of the Act is
very categorical in its stipulation that where the mandate of an arbitrator
terminates, a substitute arbitrator shall be appointed according to the
Rules that were applicable to the appointment of the arbitrator being
replaced. Section 14 of the Act states that mandate of an arbitrator shall
terminate and he shall be substituted by another arbitrator if he withdraws
from his office. Thus, in the present case the mandate of the arbitrator was
terminated when he recused himself from the arbitral proceedings.
27. Considering the facts in the present case, it is clear that appointment
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
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of the sole arbitrator in the present case was done by this Court. Section
11(2) of the Act provides that the parties are free to agree on a procedure
for appointing an arbitrator or arbitrators. If there is no procedure agreed
between the parties for appointment of an arbitrator, then in terms of
Section 11(5) of the Act, appointment of an arbitrator is to be made within
30 days from receipt of a request by one party from the other party. If an
arbitrator is not so appointed within 30 days of receipt of request for
appointment of an arbitrator, then as per Section 11(4) of the Act, an
application is made before Court for appointment of an arbitrator. In the
present case, arbitrator was not appointed by respondent in terms of
Section 11(5) of the Act. Thus, this Court in exercise of its power under
Section 11(6) of the Act appointed sole arbitrator in the present case.
Once a party forfeits its right for appointment of an arbitrator and
arbitrator is appointed by Court, then said right cannot be revived
subsequently for substitution of an arbitrator in terms of Section 15 of the
Act. The procedure as given under Section 11(5) of the Act cannot be
resorted to for substitution of an arbitrator, when the initial appointment
of an arbitrator is done by Court in exercise of its power under Section
11(6) of the Act.
28. In the present case, order appointing the arbitrator by this Courtwas a
consent order and on this account, the parties in the present case had
given up their right for appointment of an arbitrator. Therefore, petitioner
did not have the option to resort to the procedure as envisaged under
Section 11(5) of the Act to wait for 30 days for the respondent to appoint
an arbitrator after recusal by the arbitrator in order to contend that the
limitation period in terms of Article 137 of the Limitation Act commenced
only after expiry of 30 days. Such a course of action was not available to
the petitioner.
29. Considering the above, substituted arbitrator in the present case is to
be appointed by this Court only in terms of Section 15 of the Act in
consonance with the Rules applicable to the appointment of the arbitrator
being replaced. It was not permissible for the respondents to appoint a
substitute arbitrator as the initial appointment itself was made by this
Court. Therefore, the contention on behalf of the petitioners that the
limitation period of 3 years in terms of Article 137 of the Limitation Act
started running only after expiry of 30 days from the date of recusal of the
arbitrator, is totally misplaced and is rejected.”
33. The High Court of Calcutta, in the case of Ramjee Power
Construction Ltd, as well as the High Court of Bombay in the case of SAP
India Private Ltd, has also taken a similar view. Paragraph 48 of SAP India
Private Ltd is culled out hereunder for reference:-
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
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“ 48. It can be thus clearly seen from the common thread which flows from
decisions of the Supreme Court in Yashwith Constructions (P) Ltd. (supra)
and Shailesh Dhairyawan (supra) and the decisions of learned Single
Judge of Delhi High Court in Mithlesh Kumar Aggarwal (supra) and
GMR Ambala Chandigarh Expressways Pvt. Ltd. (supra), and the decision
of learned Single Judge of Calcutta High Court in “R.B. Rajesh v. The
Chief Engineer” (supra), and the decisions of learned Single Judge of this
Court in Rajesh K. Shah v. Kamlesh K. Sahani (supra), and Ignatius Tony
Pereira (supra), that when the initial appointment of an arbitrator is made
by the Court by an order passed under Section 11 of the Act, an
appointment of a substitute arbitrator would be required to be made in the
same manner by the Court, as in terms of Section 15 subsection (2) of the
Act the initial procedure and the rule so followed, would be required to be
followed in appointing a substitute arbitrator. This also for the reason that
the party whose right to make an appointment of an arbitrator as per the
arbitration agreement stands forfeited, in the Court making the
appointment as per Section 11 of the Act, would not have any authority to
make an appointment of a substitute arbitrator.”
34. It is in the aforesaid context that the decision in Yashwith
Constructions (P) Ltd. has been consistently understood and applied, both
by this Court and by various other High Courts, to mean that once an
Arbitrator has been appointed under Section 11(6) of the Arbitration and
Conciliation Act, the substitution of such Arbitrator does not necessitate
undergoing the same exercise as at the stage of the initial appointment.
35. In the present petition, therefore, this Court finds no impediment to
substituting the Arbitrator. As regards the decision in M/s Raj Chawla , it
was rendered in the specific facts of that case, without consideration of the
earlier binding precedents such as Mithlesh Kumar Aggarwal, GMR
Ambala Chandigarh , and Tricolor Hotels Limited.
36. Furthermore, a perusal of the Indemnity Bond, which governs the
present dispute and is binding upon the parties, reveals that it expressly
contains an arbitration clause. Clause 6 thereof stipulates that the arbitration
proceedings shall be governed under Section 29B of the Act of 1996. The
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
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said clause reads as under:-
“6. That in case of any dispute arising under this undertaking, the same
shall be referred to a sole arbitrator mutually chosen by PMPS and
B&G, for fast-track procedure arbitration under Section 29B of the
Arbitration & Conciliation Act, 1996.”
37. Thus, the intent of the parties is manifestly clear inasmuch as they
consciously agreed that any dispute arising out of the Indemnity Bond would
be resolved through arbitration, and more significantly, that such arbitration
would be conducted under the fast-track procedure envisaged in Section
29B of the Act of 1996. This demonstrates not only their preference for
arbitration as a mode of alternative dispute resolution but also their
deliberate choice to adopt a mechanism designed to expedite the process
within the framework of the Act. For the sake of clarity, the text of Section
29B of the Arbitration and Conciliation Act, 1996 is reproduced hereunder:-
“[29B. Fast track procedure.-- (1) Notwithstanding anything contained
in this Act, the parties to an arbitration agreement, may, at any stage
either before or at the time of appointment of the arbitral tribunal,
agree in writing to have their dispute resolved by fast track procedure
specified in sub-section (3).
(2) The parties to the arbitration agreement, while agreeing for
resolution of dispute by fast track procedure, may agree that the
arbitral tribunal shall consist of a sole arbitrator who shall be chosen
by the parties.
(3) The arbitral tribunal shall follow the following procedure while
conducting arbitration proceedings under sub-section (1):--
(a) The arbitral tribunal shall decide the dispute on the basis of
written pleadings, documents and submissions filed by the parties
without any oral hearing;
(b) The arbitral tribunal shall have power to call for any further
information or clarification from the parties in addition to the
pleadings and documents filed by them;
(c) An oral hearing may be held only, if, all the parties make a
request or if the arbitral tribunal considers it necessary to have
oral hearing for clarifying certain issues;
(d) The arbitral tribunal may dispense with any technical
formalities, if an oral hearing is held, and adopt such procedure
as deemed appropriate for expeditious disposal of the case.
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Signed By:AMIT KUMAR
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(4) The award under this section shall be made within a period of six
months from the date the arbitral tribunal enters upon the reference.
(5) If the award is not made within the period specified in sub-section
(4), the provisions of sub-sections (3) to (9) of section 29A shall apply
to the proceedings.
(6) The fees payable to the arbitrator and the manner of payment of the
fees shall be such as may be agreed between the arbitrator and the
parties.]”
38. A plain reading of Section 29B indicates that it provides for a special
procedure akin to summary proceedings, whereby oral hearings and
arguments are curtailed, and the arbitral tribunal is primarily required to
decide the matter on the basis of documents, affidavits, and written
submissions. The underlying objective of the provision is that when the
documentary record substantially speaks for itself, the adjudication is done
based on the same itself, and that the proceedings are both swift and
efficient.
39. Furthermore, a perusal of Section 15 of the Act of 1996, which
provides for termination of mandate and substitution of an arbitrator, is
apposite. The provision makes it clear that where an arbitrator withdraws
from office for any reason (as has occurred in the present case, where the
sole arbitrator has recused himself following allegations of bias), or where
the parties so agree, a substitute arbitrator is to be appointed in accordance
with the same rules that governed the appointment of the arbitrator being
replaced. Importantly, unless the parties agree otherwise, any hearings
already conducted may, at the discretion of the newly constituted arbitral
tribunal, be repeated, and further, any orders or rulings issued by the
previous arbitrator prior to such substitution shall not be invalidated merely
on account of the change in composition. The relevant provision is culled
out hereunder for reference:-
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KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
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“Section 15. Termination of mandate and substitution of arbitrator.
(1) In addition to the circumstances referred to in section 13 or section
14, the mandate of an arbitrator shall terminate—
(a) where he withdraws from office for any reason; or
(b) by or pursuant to agreement of the parties.
(2) Where the mandate of an arbitrator terminates, a substitute
arbitrator shall be appointed according to the rules that were
applicable to the appointment of the arbitrator being replaced.
(3) Unless otherwise agreed by the parties, where an arbitrator is
replaced under sub-section (2), any hearings previously held may be
repeated at the discretion of the arbitral tribunal.
(4) Unless otherwise agreed by the parties, an order or ruling of the
arbitral tribunal made prior to the replacement of an arbitrator under
this section shall not be invalid solely because there has been a change
in the composition of the arbitral tribunal.”
40. A perusal of Section 15(3) would indicate that, unless otherwise
agreed by the parties, it is within the discretion of the substituted arbitral
Tribunal either to proceed from the stage left by the earlier Tribunal or to
recommence the hearings afresh.
41. Thus, the scheme of the provision confers flexibility upon both the
parties and the newly appointed Tribunal, ensuring that the proceedings are
not rendered invalid merely by reason of substitution, while at the same time
preserving the option of a de novo hearing where circumstances so warrant.
42. While Section 15 of the Act provides the flexibility for proceedings to
either continue from the stage at which they were terminated by the earlier
Tribunal or to recommence de novo , such a mechanism is not expressly
envisaged under Section 11 of the Act of 1996. The scheme of Section 11,
when carefully read, does not contemplate continuation of proceedings from
the point at which they were left by a previously appointed arbitrator, if any.
In fact, section 11 does not even contemplate such a scenario ex facie .
Instead, it merely empowers the Court to appoint an arbitrator where the
parties have failed to agree on such appointment in terms of their agreement.
Signature Not Verified
Signature Not Verified
Signed
By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
Signing Date:10.09.2025
17:30:40
O.M.P. (T) (COMM.) 71/2025 Page 14 of 15
43. Thus, keeping in view the intent of the parties as manifested in Clause
6 of the Indemnity Bond, wherein the parties have consciously elected to
adopt the fast-track procedure under Section 29B of the Act, it is evident
that their overarching objective was to secure a quick and efficient
resolution of disputes.
44. On the fulcrum of such intent, this Court is of the considered opinion
that the parties, in circumstances where the arbitrator has recused, need not
be compelled to institute a fresh petition under Section 11. Instead, recourse
may appropriately be taken under Section 15 of the Act, which specifically
provides for substitution of an arbitrator in such eventuality, thereby
preserving both the continuity of proceedings and the expeditious resolution
as envisaged by the parties.
45. The Court, therefore, overrules the objections raised by the
respondent and proceeds to substitute the Arbitrator with Ms. Diksha Punia,
Advocate (Phone no. +91-9958535104, Email Id-
advdikshapunia@zohomail.in ) on the same terms and conditions as the
original Arbitrator had been appointed vide order dated 04.12.2023.
46. It is noted that the mandate of the learned Arbitrator expired on
17.06.2025, and therefore requires an appropriate extension.
47. Accordingly, the mandate of the learned Arbitrator is hereby extended
for a further period of twelve months from today.
48. With the aforesaid directions, the present petition stands disposed of.
(PURUSHAINDRA KUMAR KAURAV)
JUDGE
SEPTEMBER 3, 2025/ aks/sp
Signature Not Verified
Signature Not Verified
Signed
By:PURUSHAINDRA
KUMAR KAURAV
Signed By:AMIT KUMAR
SHARMA
Signing Date:10.09.2025
17:30:40
O.M.P. (T) (COMM.) 71/2025 Page 15 of 15