National Highways Authority Of India vs M S Irb Westcoast Tollway Ltd & Ors.
- Court
- Delhi High Court
$~J
* IN THE HIGH COURT OF DELHI AT NEW DELHI
%
Judgment pronounced on: 16.10.2026
# CNR No.DLHC010039722026
ARB.P. 241/2026
+
NATIONAL HIGHWAYS AUTHORITY OF INDIA .....Petitioner
Through: Mr. Ankur Mittal, Sr. Adv., Mr.
Abhay Gupta, Mr. Ankur Saboo, Ms.
Ipshita Dutta and Mr. Aviraj Pandey,
Advs.
versus
M S IRB WESTCOAST TOLLWAY LTD & ORS ......Respondents
Through: Mr. Atul Nanda, Sr. Adv., Ms.
Rameeza Hakim, Ms. Devika Mohan,
Mr. Uday Khanna, Mr. Aalam Bir
Singh Nijar, Mr. Annamaya Nanda
and Mr. Pratyush Srivastava, Advs.
CORAM:
HON'BLE MR. JUSTICE SACHIN DATTA
JUDGMENT
1. The present petition has been filed by the petitioner, National
Highways Authority of India (hereinafter referred to as “NHAI”) under
Section 11(6) of the Arbitration & Conciliation Act, 1996 (hereinafter
referred to as “A&C Act”), seeking appointment of a presiding arbitrator so
as to complete the constitution of the Arbitral Tribunal for adjudication of
the disputes between the parties under a Concession Agreement dated
25.03.2013 (hereinafter referred to as “CA”).
2. The parties have already nominated their respective nominee
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arbitrators. The only vacancy remaining is that of the presiding arbitrator.
The respondents resist the petition on a single ground. It is contended that
the petition is not maintainable because the arbitral proceedings before the
Arbitral Tribunal originally constituted in October 2024 (erstwhile Arbitral
Tribunal) stood terminated by the Procedural Order No. 6 dated 16.07.2025,
circulated via email dated 21.07.2025 (hereinafter referred to as ‘Procedural
Order No. 6 dated 16.07.2025’), whereby all three members of that Tribunal
recused themselves. It is contended that the same tantamounts to termination
under Section 32(2)(c) of the A&C Act and that in terms of the judgment of
the Supreme Court in Harshbir Singh Pannu & Anr. v. Jaswinder Singh ,
2025 SCC OnLine SC 2742, the only remedy of a party aggrieved by an
order of termination is to seek recall of that order before the same Tribunal
and failing that, to approach the Court under Section 14(2) of the A&C Act.
3. As such, it is submitted by the Respondents that a fresh petition under
Section 11 is barred.
4. The question that arises is, therefore, as follows: “when the Members
of an arbitral tribunal recuse themselves from a reference on account of a
disagreement with one of the parties as to the quantum of their fees, without
passing any order under Section 32 of the A&C Act, would the reference
itself stand terminated [so as to attract the consequences set out in Harshbir
Singh Pannu (supra)] or would the same merely occasion a vacancy in the
office of each arbitrator, to be filled in by substitution under Section 15(2) of
the A&C Act.”
5. For the reasons that follow, this Court is of the view that, in this
factual context, the dicta laid down in Harshbir Singh Pannu (supra) , will
not apply and that the vacancy in the Arbitral Tribunal is to be supplied by
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taking recourse to Section 15(2) of the A&C Act.
FACTUAL BACKGROUND
6. On 25.03.2013, the CA was entered into between the petitioner and
respondent no.1, IRB Westcoast Tollway Ltd., a Special Purpose Vehicle
(hereinafter referred to as “the Concessionaire”), for “Four Laning of
Goa/Karnataka Border to Kundapur Section of NH-66 (formerly NH-17)
from Km 93.700 to Km 283.300 in the State of Karnataka under NHDP
Phase IV on a Design, Build, Finance, Operate and Transfer (DBFOT) Toll
Basis” (hereinafter referred to as “the Project Highway”). Respondent no.2,
IRB Infrastructure Trust, is the current promoter of the Concessionaire, and
respondent no.3, IRB Infrastructure Developers Ltd., is its erstwhile
promoter and was the successful bidder for the project. Respondent nos.2
and 3 are not signatories to the CA.
7. The Arbitration Clause is contained in Article 44.3 of the CA. The
same reads as under:
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8. On 08.01.2024, the Concessionaire raised claims upon the petitioner
described as “interim claims of compensation for Damages and Losses on
account of Overstay at Site beyond Schedule Four Laning Date” (the First
Set of Claims), aggregating approximately to Rs. 2987.45 Crores.
9. On 21.06.2024, the Concessionaire issued the first notice of
arbitration, inter alia , stating as follows:
“Hence, now this notice invoking arbitration agreement is being served.
We are nominating Hon’ble Justice P. N. Deshmukh, Retd. Judge of the
Hon’ble Bombay High Court as our nominated arbitrator. (Email:
[email protected]. Postal address: Flat No. 2201, A wing,
Lotus Enpar Residency, Shankarrao Narm Marg, Lower Parel, Mumbai
– 400013)
We are calling upon the Authority to nominate its arbitrator in
accordance with the arbitration agreement, so that a Three Member
Arbitral Tribunal can be expeditiously constituted as per agreed
procedure for expeditious resolution of all these disputes and
differences”.
10. In response to this letter, the petitioner nominated Hon’ble Mr. Justice
(Retd.) V. Ramasubramanian, former Judge of the Supreme Court of India,
as its nominee arbitrator vide its communication dated 23.07.2024. On
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19.08.2024, the petitioner issued a suspension notice-cum-order consequent
to the collapse of the old Kaali Bridge on 07.08.2024, which was disputed
by the Concessionaire by a letter dated 26.08.2024.
11. On 11.09.2024, the petitioner issued a Show Cause Notice to the
Concessionaire as well as to respondent nos.2 and 3, and on 12.09.2024 the
suspension notice-cum-order dated 19.08.2024 was withdrawn. On
27.09.2024, the Concessionaire issued a further notice invoking arbitration,
addressed to the petitioner as well as to respondent nos.2 and 3, in respect of
the disputes concerning the old Kaali Bridge (the second set of claims).
12. The communication dated 27.09.2024, inter alia , reads as under:
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13. On 17.10.2024, Hon’ble Mr. Justice (Retd.) Krishna Murari, former
Judge of the Supreme Court of India, communicated his consent to act as the
Presiding Arbitrator along with his disclosure under the Sixth Schedule,
whereupon the erstwhile Arbitral Tribunal stood constituted. Around the
same time, the Concessionaire and respondent nos.2 and 3 had filed
O.M.P.(I)(COMM) 355/2024 under Section 9 of the A&C Act, seeking,
inter alia , stay of the Show Cause Notice dated 11.09.2024.
14. By order dated 18.10.2024, a coordinate Bench of this Court directed
that the said petition should be treated as an application under Section 17 of
the A&C Act. It was, inter alia , directed as under:
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PROCEEDINGS BEFORE THE ERSTWHILE ARBITRAL
TRIBUNAL:
15. By procedural Order No. 1 dated 20.10.2024, the erstwhile Arbitral
Tribunal fixed the Section 17 application for hearing on 26.10.2024. By
procedural Order No. 2 recording the hearing held on 26.10.2024 (as revised
on 27.10.2024), the erstwhile Arbitral Tribunal, inter alia , directed as under:
16. By procedural Order No. 3 dated 12.11.2024, the erstwhile Arbitral
Tribunal, after hearing the parties on the Section 17 application, reserved
orders and, inter alia , further directed as under:
17. By order dated 24.12.2024, the erstwhile Arbitral Tribunal allowed
the Section 17 application and, held that respondent no.2 and 3 were
veritable parties to the contract and the arbitration proceedings. It was, inter
alia , held as under:
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18. The aforesaid order has been challenged by the petitioner in ARB. A.
(COMM) No. 16/2025 under Section 37(2)(b) of the A&C Act, which is
pending. It appears that the petitioner raised no objection to the fixation of
ad-hoc fee either before the order dated 24.12.2024 was passed or in the
Memorandum of appeal.
19. On 13.01.2025, the petitioner issued a cure-period notice requiring
replacement/rehabilitation of old structures, giving rise to a third set of
disputes (third set of claims) which were referred to conciliation. Following
its failure, the Concessionaire issued a third notice of arbitration dated
03.05.2025.
20. By procedural Order No. 4 dated 25.03.2025, the erstwhile Arbitral
Tribunal fixed the schedule for pleadings and directed as under:
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21. On 02.04.2025, i.e. more than three months after the order dated
24.12.2024, the petitioner filed before the erstwhile Arbitral Tribunal an
application seeking recall of the Procedural Order no. 2 (as revised on
27.10.2024) to the extent it fixed the fee of Rs.10,00,000/- per arbitrator for
adjudication of the Section 17 application.
22. The ground taken was that the rules of arbitration of International
Centre for Alternative Dispute Resolution (ICADR) to which Article 44.3.1
of the CA refers, do not provide for a separate fee for interim application. It
was, inter alia , averred as under:
XXX XXX XXX
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23. On 21.05.2025, in response to the third notice of arbitration dated
03.05.2025, the petitioner addressed a letter to the Concessionaire stating,
inter alia , as under:
24. On the same day i.e. 21.05.2025, the Concessionaire issued a fourth
notice of arbitration in respect of disputes concerning deemed modification
of the concession period under Article 29 of the CA. It was, inter alia , stated
as under:
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25. On 16.06.2025, the Concessionaire and respondent nos. 2 and 3 filed
before the erstwhile Arbitral Tribunal a consolidated statement of claim
covering all four sets of claims in stated compliance with the decision of this
Court in Gammon India Ltd. Vs. NHAI , 2020 SCC OnLine Del 659. The
consolidated statement of claims, with annexures ran into more than
1,38,000 pages and the aggregate value of the claims was stated to be
approximately Rs. 3515 Crores.
26. By procedural Order No. 5 dated 01.07.2025, the erstwhile Arbitral
Tribunal recorded as under:
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THE RECUSAL:
27. At the hearing held on 16.07.2025, the erstwhile Arbitral Tribunal
passed the Procedural Order No. 6, which was circulated on 21.07.2025 and
reads as follows:
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STEPS TAKEN BY THE PARTIES CONSEQUENT UPON THE
RECUSAL
28. On 19.07.2025, the petitioner addressed a communication purporting
to nominate another nominee arbitrator, in view of recusal of all Members of
the Arbitral Tribunal on 16.07.2025. However, the concerned nominee
expressed her inability to accept the assignment. On 21.07.2025, the
petitioner addressed a communication nominating Hon’ble Mr. Justice
(Retd.) Uday U. Lalit, former Chief Justice of India, as its nominee
arbitrator, who conveyed his consent on the same day. On 17.08.2025, the
Concessionaire sought to nominate Hon’ble (Retd.) Justice Virendrasingh
Gyansingh Bisht, former Judge of the Bombay High Court as its nominee
arbitrator. He furnished his consent on 22.08.2025.
29. On 10.09.2025, Hon'ble Mr. Justice (Retd.) Uday U. Lalit recused
himself from acting as an arbitrator, which was communicated to the parties
vide email dated 11.09.2025 from Hon’ble (Retd.) Justice Virendrasingh
Gyansingh Bisht. On 29.09.2025, the petitioner nominated Hon'ble Mr.
Justice (Retd.) Sakha Ram Singh, former Judge of the High Court of
Allahabad as its nominee arbitrator who furnished his acceptance/consent on
02.10.2025.
30. In the meantime, the respondents had filed W.P.(C) 12165/2025
before this Court seeking, inter alia , permission to re-approach the erstwhile
Arbitral Tribunal for re-fixation of the arbitral fee separately for each set of
claims in terms of the Fourth Schedule of the A&C Act, and a declaration
that the petitioner’s letters dated 19.07.2025 and 21.07.2025 nominating a
new nominee arbitrator were illegal. By judgment dated 09.10.2025, this
Court dismissed W.P.(C) 12165/2025. The said judgment, inter alia , holds
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as under:
ARB.P. NO. 1862/2025 FILED BY THE RESPONDENTS FOR
APPOINTMENT OF PRESIDING ARBITRATOR THEREIN:
31. On 30.10.2025, Hon’ble Mr. Justice (Retd.) Sakha Ram Singh,
informed the parties through email, i nter alia , stating as under:
32. In November, 2025, the respondents filed ARB. P. NO. 1862/2025
under Section 11(6) of the A&C Act, seeking appointment of a presiding
arbitrator. The said petition came to be disposed of vide order dated
01.12.2025. The same reads as under:
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33. The presiding arbitrator, who was appointed, eventually came to
address a letter dated 05.01.2026 recusing himself from the arbitration
proceedings and requested the parties “to take necessary steps for appointing
the substitute Presiding Arbitrator”.
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PRESENT PETITION AND THE RESPONDENT’S RECALL
APPLICATION:
34. The present petition came up for hearing on 05.02.2026, on which
date notice was issued. On 04.02.2026, the respondents filed before the
erstwhile Arbitral Tribunal an “Application seeking recall of Procedural
Order No. 6 dated 16.07.2025”. The reliefs sought therein were as under:
35. The following averments in the application are material:
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36. It is in the aforesaid factual conspectus that this Court has considered
the matter.
SUBMISSIONS ON BEHALF OF THE PETITIONER:
37. Mr. Ankur Mittal, learned senior counsel for the petitioner submitted
that the entire edifice of the respondents’ objections rests on a
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mischaracterisation of the procedural Order No. 6 dated 16.07.2025. That
Order records that members of the erstwhile Arbitral Tribunal “have decided
to recuse themselves from further proceedings in the matter”. It does not
purport to terminate the arbitral proceedings; nor does it refer to Section 32
or 38 of the A&C Act. Further, the same records no finding that the
continuation of the proceedings has become ‘unnecessary or impossible’. It
is, thus, submitted that the same is in substance and in form, a withdrawal of
the arbitrators from office, which contingency has been addressed by
Section 15(1)(a) of the A&C Act.
38. It is submitted that the A&C Act draws a clear and deliberate
distinction between the termination of mandate of an arbitrator (Sections 13,
14 and 15) and the termination of arbitral proceedings (Section 32). The
former results in substitution under Section 15(2); the latter brings the
reference to an end.
39. It is further submitted that Sections 15(3) and 15(4) make it clear that
upon substitution the proceedings continue and the prior orders/rulings are
preserved. It is submitted that a recusal by the arbitrators whether by one
member or by all the three members, results only in termination of their
respective mandates. The same does not terminate the reference.
40. It is emphasised that the procedural Order No. 6 dated 16.07.2025 did
not even purport to terminate the proceedings. Learned counsel submits that
the judgment of the Supreme Court in Harshbir Singh Pannu (supra), is
wholly distinguishable. In that case, the sole arbitrator having fixed his fee
in terms of the Fourth Schedule with the consent of the parties, terminated
the proceedings by an express order under Section 38 of the A&C Act, on
account of non-payment of his fees.
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41. It is submitted that the same is in stark contrast to the facts of the
present case, where there is no order terminating the arbitral proceedings. It
is submitted that the remedial route discussed in Harshbir Singh Pannu
(supra), namely, an application for recall before the Arbitral Tribunal and, if
the same is dismissed, an application before the Court under Section 14(2)
of the A&C Act, pre-supposes both a termination order capable of recall and
a Tribunal capable of considering it.
42. It is emphasised that Harshbir Singh Pannu (supra), is authority for
what happens after a Tribunal passes an order of termination; the same is not
applicable to a situation where arbitrators withdraw from office. It is further
submitted that respondents’ own conduct, belies their present stance. It is
pointed out that the respondents have themselves, proceeded to nominate
their fresh nominee arbitrator pursuant to the recusal of their previous
nominee arbitrator. It is further pointed out that thereafter, the respondents
themselves went ahead and invoked Section 11(6) by filing ARB. P. No.
1862/2025, pursuant to which, a presiding arbitrator was appointed by this
Court vide order dated 01.12.2025.
43. It is submitted that, having participated in the reconstitution of the
Arbitral Tribunal and having filed ARB. P. No. 1862/2025 for the said
purpose, the respondents cannot be heard to object to the maintainability of
the present petition which has been filed simply to supply the vacancy of
presiding arbitrator.
44. In the amended written submissions filed on behalf of the petitioner, it
has further been submitted that the Presiding Arbitrator was appointed by
this Court under Section 11(6) of the A&C Act vide order dated 01.12.2025.
Upon his recusal, Section 15(2) of the A&C Act requires the substitute
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arbitrator to be appointed in accordance with the same mechanism, and the
present petition is, therefore, in accordance with the statutory mandate. It
has also been submitted that the respondents’ contention, that the said
Presiding Arbitrator never entered upon the reference and merely furnished
a conditional declaration under Section 12 of the A&C Act on 22.12.2025, is
misconceived, since the A&C Act does not contemplate any such
“conditional” declaration. In any event, the Arbitral Tribunal stood duly
constituted upon the passing of the order dated 01.12.2025 by this Court
under Section 11 of the A&C Act.
45. In the written submissions filed on behalf of the petitioner, the
judgment in Harshbir Singh Pannu (supra), has been sought to be
distinguished in the following terms:
“18. Harshbir Singh Pannu (Supra) deal with sections 25, 30, 38 and
consequences of termination u/s 32 and does not deal with substitution as
provided u/s 15 of A&C, Act, 1996. A passing reference of termination of
mandate tribunal and termination of AT is given in paras 268-269 of the
judgment.
19. Further, the judgment deals with a materially different factual
situation, whereby, the sole arbitrator had fixed fees under the Fourth
Schedule; the parties failed to deposit the fees and the arbitrator
expressly terminated the arbitral proceedings. The issue was whether,
following such termination, a fresh reference could be commenced.
20. Here, there is (i) no order terminating the arbitral proceedings, (ii)
no invocation of Sections 25, 30, 38 and 32 (2) for termination, (iii) no
refusal by the Petitioner to pay fees under the Fourth Schedule, (iv) no
attempt by the Petitioner to restart a claim; the Respondents'
consolidated Statement of Claim is already on record and (v) only
completion of the AT is sought, with both party already appointed their
respective nominees.
21. Respondents rely on para 251, 415 (IV) & (V) of Harshbir Singh
Pannu (Supra) to say that any varied reason would constitute
termination u/s 32. It is submitted that, if Section 32 is exhaustive and
termination can occur only through Section 32(2), recusal cannot
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terminate the proceedings, and no Section 32(2) order exists here. The
remedial route discussed in Harshbir Singh Pannu (Supra) under Section
14(2) of the Act, presupposes both a termination order capable of recall
and a tribunal capable of considering it. Neither exists in the present
case. All members of the erstwhile AT recused, their mandates
terminated under Section 15(1)(a) of the Act. The above has already been
held by this Hon'ble Court in term2026-2176-183102025(1)-21, P.1034-
1038). The Respondents application dated 04.02.2026 (1-2, Pg.176-183
of Reply) is therefore addressed to a forum that no longer exists.”
SUBMISSIONS ON BEHALF OF THE RESPONDENT:
46. Mr. Atul Nanda, learned senior counsel for the respondents submitted
that the present petition is not maintainable. He submitted that the
procedural Order No. 6 dated 16.07.2025 is in substance an order
terminating arbitral proceedings under Section 32(2)(c) of the A&C Act. It
is submitted that the termination of the Arbitral Tribunal is referable only to
Section 32 of the A&C Act; other provisions such as Section 25, 30 and 38
of the A&C Act merely enumerate circumstances in which termination may
be taken recourse to.
47. Reliance was placed on Harshbir Singh Pannu (supra), particularly
paras 209-213, 253-262, 310-316 and 415 thereof, for the proposition that:
(i) Section 32 of the A&C Act is exhaustive of the modes of termination; (ii)
the arbitral reference is “singular, not perpetual” and once the Arbitral
Tribunal is seized of a dispute, the mechanism of the A&C Act cannot be re-
invoked to refer the same dispute to another tribunal; (iii) the remedy of a
party aggrieved by an order of termination is to first seek recall before the
same Tribunal and if the same is refused, to approach the Court under
Section 14(2) of the A&C Act.
48. It is further submitted that Section 14(1)(b) and Section 15(1)(a)
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contemplate the withdrawal of an individual arbitrator from an Arbitral
Tribunal and not collective withdrawal of the Arbitral Tribunal as a whole.
It is submitted that recusal of the entire Arbitral Tribunal is nothing but a
termination of proceedings.
49. Mr. Nanda, also submits that the procedural Order No. 6 dated
16.07.2025 was occasioned solely by the petitioners’ unreasonable stand on
arbitral fees. He further submitted that the judgment/order dated 09.10.2025
in W.P.(C) 12165/2025, does not bar the respondent’s objection. It is
submitted that the said judgment preceded Harshbir Singh Pannu (supra),
and merely holds that the relief could not be granted in the writ jurisdiction.
It is submitted that Harshbir Singh Pannu (supra) has since clarified the
proper remedy, pursuant to which the respondents have filed an application
dated 04.02.2026 before the erstwhile Arbitral Tribunal seeking recall of
procedural Order No.6 dated 16.07.2025.
50. As regards filing of ARB. P. 1862/2025 by the respondents
themselves, and the order dated 01.12.2025 passed therein, it is submitted
that the same preceded the judgment of the Supreme Court in Harshbir
Singh Pannu (supra).
REASONING & CONCLUSION:
51. At the outset, it is necessary to take note of the scheme of the A&C
Act, particularly the following features thereof:
1
(i) Section 15(1)(a)
contemplates that an arbitrator may
1
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
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withdraw from office for any reason and such withdrawal is a
complete self-sufficient event, resulting in termination of the mandate
of the arbitrator. In such a scenario, Section 15(2) contemplates that
“a substitute arbitrator shall be appointed according to the rules that
were applicable to the appointment of the arbitrator being replaced”.
Thus, the consequence prescribed by the legislature in the event
of withdrawal from office, is “substitution”. It is also relevant to note
that under the scheme of the A&C Act, an arbitrator is not required to
justify his/her withdrawal. It is also not envisaged that a withdrawal
may be “recalled”. The authority of an arbitrator flows entirely from
his mandate; upon the arbitrator’s withdrawal, that mandate
terminates by operation of Section 15(1)(a) itself, and Section 15(2) is
attracted. This has been authoritatively explained by the Supreme
Court in Yashwith Constructions (P) Ltd. v. Simplex Concrete Piles
India Ltd. , (2006) 6 SCC 204, in the following terms:
“4. … The withdrawal of an arbitrator from the office for any
reason is within the purview of Section 15(1)(a) of the Act.
Obviously, therefore, Section 15(2) would be attracted and a
substitute arbitrator has to be appointed according to the
rules that are applicable for the appointment of the arbitrator
to be replaced. Therefore, what Section 15(2) contemplates is
an appointment of the substituted arbitrator or the replacing
of the arbitrator by another according to the rules that were
applicable to the appointment of the original arbitrator who
was being replaced.
…”
An arbitrator who has withdrawn from office, therefore, retains
no authority in relation to that reference; whatever authority subsists
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vests in the substitute arbitrator.
(ii) it is also relevant to note that Section 15(3) of the A&C Act
provides that any hearing previously held (prior to substitution) may
be repeated at the discretion of the Arbitral Tribunal. The same
necessarily implies that the arbitral proceedings are not obliterated by
the substitution. Further, Section 15(4) of the Act makes it clear that
prior orders or rulings “shall not be invalid solely because there has
been a change in the composition of the arbitral tribunal”.
The clear implication is that a reference in which the arbitrator
has been substituted is, therefore, the same reference and not a new
one. The same is, thus, inherently distinct from a situation where
arbitral proceedings are “terminated”.
(iii) Save where the arbitral proceedings culminate in a final
award, termination of arbitral proceedings under Section 32 of the A&C
Act is not an event that occurs by operation of law or by the conduct of
the arbitrators. It requires an order of the Arbitral Tribunal under Section
32(2) and, in a situation covered by Section 32(2)(c) of the A&C Act, a
finding of the Tribunal that the continuation of the proceedings “has for
any other reason become unnecessary or impossible”. The termination of
the mandate of the Arbitral Tribunal under Section 32(3) is, in turn, a
consequence of such an order.
2
The Supreme Court has explained in paragraphs 215-217
of
2
Harshbir Singh Pannu & Anr. v. Jaswinder Singh , 2025 SCC OnLine SC 2742, paragraph 215-217:
“ 215. This is further evident from the discussions of the Working Group on the UNCITRAL Model Law,
which decided to adopt Article 32 (corresponding Section 32 of the Act, 1996) in order to ensure that the
arbitral proceedings should not terminate automatically unless an order to that effect is passed by the
arbitral tribunal.
216. At the time of preparation of the UNCITRAL Model, both the Articles 25 and 30 respectively, had
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the Harshbir Singh Pannu (supra) that Article 32 of the UNCITRAL
Model Law from which Section 32 is drawn, was adopted precisely to
“ensure that the arbitral proceedings should not terminate
automatically unless an order to that effect is passed by the Arbitral
Tribunal”.
The Model Law, thus contains, as the Supreme Court notes in
Harshbir Singh Pannu (supra), “a dedicated provision relating to
termination of proceedings that would explicitly require an arbitral
tribunal to issue a formal order to such effect in order to bring the
arbitral proceedings to an end.”
(iv) Thus, withdrawal by an arbitrator and substitution
thereof (provided in Sections 12-15, which form part of Chapter III of
the A&C Act), is quite distinct from termination of arbitral
proceedings (provided for in Section 32, which forms part of the
stipulated that the proceedings shall terminate if the claimant does not file its statement of claims or where
the parties arrive at a settlement of the dispute, respectively. The Working Group was concerned that, there
could be a situation where, even without the indulgence of the arbitral tribunal, the proceedings could
simpliciter come to an end as soon as the conditions stipulated in Article(s) 25 and 30 were fulfilled.
217. Accordingly, it decided to adopt a dedicated provision relating to termination of proceedings that
would explicitly require an arbitral tribunal to issue a formal order to such effect in order to bring the
arbitral proceedings to an end. It was with this view that Article 32 was incorporated in the UNCITRAL
Model Law. At the cost of repetition, the relevant observations are once again reproduced below:—
“38. The Working Group considered the question whether it would be appropriate to include in
the model law a provision on termination of arbitral proceedings (on the basis of a note by the
Secretariat, WP.4l, paras. 38-41 and draft article F).
39. There was wide support in the Working Group for the view that the model law should contain
a provision on termination of arbitral proceedings. Such a provision would be useful because it would
provide certainty in respect of important consequences of the termination of arbitral proceedings.
40. The prevailing view was that there should be no automatic termination of arbitral proceedings
and that a procedural decision by the arbitral tribunal was needed for terminating the arbitral
proceedings. […]”
(Emphasis supplied)”
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Chapter VI which deals with the making of the arbitral award and
termination of proceedings). The two events i.e. withdrawal from
office and consequent substitution, and termination, are quite distinct.
(v) Section 2(1)(d) of the A&C Act defines an Arbitral
Tribunal to mean a sole arbitrator or a panel of arbitrators. An Arbitral
Tribunal comprising of three arbitrators is, therefore, nothing but an
aggregate of three offices held by individual arbitrators, each
appointed under the agreed procedure, and each capable of being
vacant and filled independently of the others. When each of the three
individuals withdraws from office, the legal consequences prescribed
by Section 15 attach to each of them. Nothing in the A&C Act
suggests that three withdrawals occurring simultaneously undergo a
transmutation into a deemed order under Section 32(2)(c) of the A&C
Act.
52. It may also be noted that Section 13(2) of the General Clauses Act,
1897 provides that in all Central Acts “words in the singular shall include
the plural, and vice versa.” There is nothing in the subject or context of
Section 15 of the A&C Act that is repugnant to its application to more than
one arbitrator at a time.
APPLICABILITY OF THE DICTA IN HARSHBIR SINGH PANNU
(SUPRA) TO THE PRESENT CASE
53. Contrary to what has been urged on behalf of the respondents, in
Harshbir Singh Pannu (supra), the Supreme Court has clearly recognised
that the termination of mandate of an Arbitral Tribunal takes place by way
of an express order under Section 32 of the A&C Act. In paragraph 109 of
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Harshbir Singh Pannu (supra), the Supreme Court while citing with
approval, the judgment of the Bombay High Court in Maharashtra State
Electricity Board Vs. Datar Switchgear Ltd ., 2002 SCC OnLine Bom 981,
has clearly observed that “The termination of a mandate of the arbitrator is
not co-terminus with the termination of arbitral proceedings. In the former,
the arbitrator merely withdraws from office, thereby permitting appointment
of a substitute arbitrator to continue the proceedings. In the latter, however,
the Arbitral Tribunal itself collapses.” The Supreme Court took note of the
illustration given by the High Court where the Tribunal under Section 16 of
the A&C Act held that there is no valid arbitration agreement. Such a
situation results in termination of the proceedings. The same cannot be
equated with a situation where an arbitrator simply withdraws or recuses
from office.
3
54. It is also relevant to note that in Harshbir Singh Pannu
(supra), the
Supreme Court has explicitly held that the termination of arbitral
proceedings under the A&C Act can occur in only two ways, viz . either
through passing of a final award or by an order of the Arbitral Tribunal
under Section 32(2).
55. It has further been held that Section 25(a), 30 and 38 of the A&C Act,
1996 merely enumerate the different circumstances in which the Arbitral
Tribunal would be empowered to pass an order for termination of
4
proceedings under Section 32(2) of the A&C Act.
Thus, the Supreme Court
3
Harshbir Singh Pannu & Anr. v. Jaswinder Singh , 2025 SCC OnLine SC 2742, paragraph 208:
“208. The aforesaid expression clearly stipulates that the termination of arbitral proceedings under the
Act, 1996 can occur in only two ways. The arbitral proceedings come to an end either through the passing
of the final award or by an order of the arbitral tribunal under sub-section (2) of Section 32”.
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is clear in that termination takes place only by virtue of an order; the
Supreme Court does not hold that in the absence of such an order every
event which brings the tribunal’s functioning to a halt, must be deemed to
bring about termination of proceedings. It is also relevant to note that
withdrawal of an arbitrator under Section 15(1)(a) of the A&C Act is not
among the circumstances enumerated in Section 25, 30, 32 and 38 or any
other provisions of the A&C Act, so as to suggest, directly or indirectly, that
the same would bring about termination of arbitral proceedings.
56. As noticed, Section 15 belongs to a different chapter of the Act and
brings about a different consequence. Importantly, Harshbir Singh Pannu
(supra), explicitly recognises this distinction in paragraphs 268 and 269
thereof, which read as under:
“268. It observed that where the mandate of the arbitrator terminates,
either as a result of the arbitrator withdrawing from the office, or upon
agreement of the parties, the Act, 1996 stipulates the recourse that would
be available namely, to seek appointment of a substitute arbitrator in
terms of Section 15 of the Act, 1996
.
269. However, in the event the arbitral proceedings are terminated and,
in consequence thereof, the mandate of the arbitral tribunal also
terminates, the Act, 1996 is completely silent on the remedy that may be
availed against the same. None of the provisions in the Act, 1996 address
the course of action that would be available to a party against an order
terminating the arbitral proceedings.”
57. It is, thus, evident that Harshbir Singh Pannu (supra), far from
supporting the inference sought to be derived by the respondents, explicitly
holds/recognises that where the mandate of an arbitrator terminates, either as
4
Harshbir Singh Pannu & Anr. v. Jaswinder Singh , 2025 SCC OnLine SC 2742, paragraph 213:
“213. The provisions of Section(s) 25(a), 30 and 38 of the Act, 1996, merely enumerate the different
circumstances in which the arbitral tribunal would be empowered to pass an order for termination of
proceedings under sub-section (2) of Section 32.”
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a result of the arbitrator withdrawing from office or upon agreement of the
parties, the recourse available is to seek appointment of a substitute
arbitrator in terms of Section 15 of the A&C Act, 1996.
58. The remedial scheme set out in Harshbir Singh Pannu (supra), viz .
filing of recall application followed by a petition under Section 14(2), if
necessary, is only in the event of termination of arbitral proceedings brought
about by virtue of an express order under Section 32 of the A&C Act.
59. The facts of Harshbir Singh Pannu (supra) involved a situation
where on account of non-payment of arbitrator’s fee, the sole arbitrator
expressly invoked Section 38 of the A&C Act and passed an order
terminating the arbitral proceedings.
60. The questions that were framed by the Supreme Court for
consideration (in paragraph 31) were in the following terms:
“I) What meaning should be ascribed to the words "termination of the
arbitral proceedings" figuring in the different provisions of the Act,
1996? Is the phrase susceptible to only one meaning?
II) What is the meaning and effect of the termination of arbitral
proceedings contemplated under Section 38 of the Act, 1996? Is it the
same as the termination of arbitral proceedings it the contemplated
under Section 32?
III) What is the remedy available to a party aggrieved by an order passed
by an arbitral tribunal terminating the proceedings?”
61. Each of the aforesaid questions presupposes that an order terminating
the arbitral proceedings has been passed by the Tribunal. It was in this
context that the Supreme Court held that the party who has allowed the
proceedings to be terminated by its own conduct, cannot set the mechanism
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5
in motion again before another set of arbitrators. In paragraph(s) 310-316
,
the Court prescribed the remedial sequences viz . an application for recall
before the Arbitral Tribunal that passed the termination order and in the
event of refusal of application of recall, an application under Section 14(2)
of the A&C Act. The judgment was therefore, directed at a situation where
termination has been expressly brought about and in this situation recourse
to a fresh petition under Section 11 of the A&C Act, 1996 was found to be
unavailable.
62. The remedy prescribed in paragraph(s) 310-316 of the Harshbir
5
Harshbir Singh Pannu & Anr. v. Jaswinder Singh , 2025 SCC OnLine SC 2742, paragraph nos. 310-
316:
“310. What emerges from the aforesaid is that where an arbitral tribunal passes an order for terminating
the proceedings under the Act, 1996, the appropriate remedy available to the parties would be to first file
an application for recall of such order before the arbitral tribunal itself.
311. It is no more res-integra that there is a clear distinction between a procedural review and a review on
merits as held in Hindustan Construction Company (supra). When applied to the Act, 1996, the irresistible
conclusion that can be reached is that the power of review is available to an arbitral tribunal to the limited
extent of curing a patent or procedural error. Thus, an arbitral tribunal has the power to entertain an
application for recall of an order terminating the proceedings passed by it.
312. Upon such application being preferred, the arbitral tribunal, as held in Bharat Heavy Electricals
(supra), would then be required to examine whether the order does or does not deserve to be recalled.
313. If a favourable order is passed for recommencing arbitration proceedings, the only option available
to a party aggrieved therefrom, would be to participate in the proceedings and thereafter challenge the
final award under Section 34 of the Act, 1996.
314. If, however, the recall application were to be dismissed, as held in Lalitkumar V. Sanghvi (supra), the
party aggrieved therefrom, would be empowered to approach the court under Section 14(2) of the Act,
1996.
315. The court would then in turn examine whether the mandate of the arbitrator stood legally terminated
or not. If it finds that the proceedings were not terminated in accordance with the law, it would be
empowered to either set-aside the order of termination of proceedings and remit the matter back to the
arbitral tribunal, or, if the circumstances so require, proceed to appoint a substitute arbitrator in terms of
Section 15 of the Act, 1996.
316. However, we make it abundantly clear that under no circumstances, can a party file a fresh
application under Section 11 of the Act, 1996 and initiate a second round of arbitration.”
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Singh Pannu (supra), is against an order terminating the arbitral
proceedings. Thus, the principles laid down in Harshbir Singh Pannu
(supra), clearly pre-suppose an order under Section 32 which is capable of
being recalled and the existence of an Arbitral Tribunal capable of recalling
it.
63. The situation in the present case is at complete variance. As already
noticed, no order terminating the proceedings has been passed. The reliance
on Harshbir Singh Pannu (supra), is thus misconceived at the threshold.
The respondents seek to apply, to a different event viz . withdrawal from
office, the consequences which the Supreme Court has attached to an order
of termination.
64. In short, Harshbir Singh Pannu (supra), answers the question “what
follows when an Arbitral Tribunal terminates the proceedings?”; it does not
answer the question “is the recusal a termination?”.
65. There is a further difficulty with the respondents’ submissions. The
recall remedy in Harshbir Singh Pannu (supra), is grounded in the Arbitral
Tribunal’s inherent power of procedural review over its own orders. This
6
has been noted in paragraph(s) 311-312 of Harshbir Singh Pannu (supra)
.
Withdrawal from office is not an order of the Tribunal over which the
Arbitral Tribunal retains the power of review; it is the relinquishment of the
6
Harshbir Singh Pannu & Anr. v. Jaswinder Singh , 2025 SCC OnLine SC 2742, paragraph nos. 311-
312:
“311. It is no more res-integra that there is a clear distinction between a procedural review and a review
on merits as held in Hindustan Construction Company (supra). When applied to the Act, 1996, the
irresistible conclusion that can be reached is that the power of review is available to an arbitral tribunal to
the limited extent of curing a patent or procedural error. Thus, an arbitral tribunal has the power to
entertain an application for recall of an order terminating the proceedings passed by it.
312. Upon such application being preferred, the arbitral tribunal, as held in Bharat Heavy Electricals
(supra), would then be required to examine whether the order does or does not deserve to be recalled.”
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office from which any such power would be exercised.
66. Nor does the discussion in paragraphs 277 to 282 of Harshbir Singh
Pannu (supra) , of the decision of this Court in VAG Educational Services
v. Aakash Educational Services Ltd. , (2022) 6 HCC (Del) 249, advance the
respondents’ case. In VAG Educational Services (supra) , the claimant had
withdrawn its claims and the sole arbitrator had passed an order terminating
the proceedings under Section 32(2)(a) of the A&C Act. The arbitrator
thereafter entertained an application for recall and restored the proceedings.
This Court set aside the order of restoration on the ground that the arbitrator,
whose mandate had terminated under Section 32(3) with the termination of
the proceedings, was coram non judice . The relevant observations have been
taken note of in paragraphs 278 to 280 of Harshbir Singh Pannu (supra) .
67. The case, therefore, was one in which there was an order of
termination under Section 32(2), which is precisely what is absent in the
present case.
68. Thus, the judgment of the Supreme Court in Harshbir Singh Pannu
(supra) clearly supports the petitioner’s contention that withdrawal of an
arbitrator from office must lead to the appointment of a substitute under
Section 15 of the A&C Act. It is only in the event of an order terminating
the proceedings under Section 32, in ‘consequence’ of which the mandate of
the Arbitral Tribunal terminates, that the remedial scheme fashioned in
Harshbir Singh Pannu (supra) is directed.
69. It also makes no difference that all the three members of the Arbitral
Tribunal recused simultaneously. The A&C Act nowhere contemplates that
plurality of withdrawals produces a consequence different from a singular
withdrawal. It is notable that the A&C Act defines Arbitral Tribunal to mean
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“a sole arbitrator or a panel of arbitrators”. The A&C Act contains no
provision for “recall” of a recusal/withdrawal order and also no provision
empowering a Court to compel an arbitrator who has withdrawn, to resume
office. The same would also be wholly illogical. Thus, for instance, in a
hypothetical situation where members of an arbitral tribunal recuse on
account of being unequipped to deal with a particular/technical subject
matter, it would be wholly incongruous if the parties were required to seek
“recall”, from the very arbitrators who had recused. The same is clearly not
contemplated by the A&C Act. Moreover, there is no logic to treat
simultaneous withdrawal of members of an arbitral tribunal any differently
from an individual or sequential withdrawal of all its members. The use of
the singular in Section 14(1) and 15(1) of the A&C Act reflects only that
withdrawal is, inherently, an act of the individual arbitrator/s who choose to
withdraw from office.
70. Had the erstwhile Arbitral Tribunal intended to terminate the
proceedings on the ground that the continuation of arbitral proceedings had
become impossible, it would have done so.
NATURE AND LANGUAGE OF THE PROCEDURAL ORDER NO. 6
DATED 16.07.2025
71. The following aspects are evident from the perusal of the Procedural
Order No.6 dated 16.07.2025 (whereby the arbitrators recused themselves
from the proceedings):
(i) The order does not use the word ‘terminate’ or ‘termination’ or
any cognate expression, anywhere. The operative verb used in the said
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7
order is “recuse”. Black’s Law Dictionary
defines “recusal” as the
“Removal of oneself as judge or policy-maker in a particular matter,
esp. because of a conflict of interest.” Thus recusal, in the ordinary
legal sense, is an act of an adjudicator withdrawing himself from the
matter; it is directed to the adjudicator's own continuation in office
and not to existence of the proceedings.
(ii) The order does not refer to Section 32 or any other provisions
under which the proceedings could be terminated.
(iii) The order records no finding that continuation of the
proceedings had become unnecessary or impossible.
(iv) The order records no default under Section 38 of the A&C Act. It
is noted that Section 38(2) of the A&C Act is attracted where a party
fails to pay the deposit which the Arbitral Tribunal has fixed. It is not
attracted when the Tribunal and a party are unable to agree on what
the fee should be.
72. Thus, on the face of it, the order dated 16.07.2025, cannot, by any
stretch of interpretation, be characterised as an order under Section 32 of the
A&C Act. The same merely brings about withdrawal from office, which
falls clearly within the sweep of Section 15(1)(a). The legislature has
expressly prescribed the consequence of the same viz . ‘substitution’.
73. This Court, therefore, rejects the submissions on behalf of the
respondents that procedural Order No.6 dated 16.07.2025 is ‘in substance’
an order of termination under Section 32(2)(c) of the A&C Act. On the
contrary, it is in substance an informed withdrawal from office by each of
the three-arbitrators within the meaning of Section 15(1)(a) of the A&C Act,
7
Bryan A. Garner (ed.), Black's Law Dictionary (9th edn., West Publishing Co., 2009), p. 1390.
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the mandate of each of them terminated on that date, but the arbitral
proceedings did not.
CONDUCT AND UNDERSTANDING OF THE RESPONDENTS
74. The conclusion reached above on the construction of the A&C Act
and of the procedural Order No.6 dated 16.07.2025, is, in the view of the
Court, sufficient to dispose of the objection of the respondents. However, it
it is relevant to note the conduct and understanding of the respondents which
places the matter beyond a shadow of a doubt.
75. The respondents’ characterisation of the order dated 16.07.2025 as a
termination, a conclusion which they claim to have arrived at after the
pronouncement of the judgment in Harshbir Singh Pannu (supra), is in
contradiction to the various steps taken by them. It is noted that the
respondents filed W.P.(C) 12165/2025, in which judgment was reserved on
13.08.2025. The relief sought was permission to re-approach the erstwhile
Arbitral Tribunal for re-fixation of the arbitral fee. It was nowhere the stand
of the respondents that the arbitral proceedings have themselves been
terminated.
76. Importantly, on 17.08.2025, the respondents themselves nominated
their nominee arbitrator and the same was expressly done “in view of
recusal of the members of the Arbitral Tribunal”. This was an action of
substitution under Section 15(2) read with Clause 44.3 of the CA. The same
is inconsistent with the assertion that the arbitral proceedings had come to an
end.
77. Most importantly, in November 2025, when two-party nominated
arbitrators were unable to agree upon the presiding arbitrator, it was the
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respondents who invoked Section 11(6) of the A&C Act by filing ARB. P.
No. 1862/2025. It was at the respondents instance that the coordinate Bench
of this Court on 01.12.2025, appointed a presiding arbitrator to adjudicate
the disputes between the parties.
78. The order itself records that the earlier Tribunal had recused itself on
16.07.2025 due to a disagreement regarding the Tribunal’s fee and that
following the recusal both parties nominated their respective nominee
arbitrators. The relief which the respondents sought in that petition is in
substance the very relief which the petitioner seeks in the present petition.
79. A party who has invoked the jurisdiction of this Court under Section
11(6) of the A&C Act and obtained an order appointing a presiding
arbitrator on the footing that the reference subsists, cannot, when the other
party invokes the same jurisdiction for the same purpose, be heard to
contend that the reference does not subsist. The respondents’ objection is,
therefore, ex-facie , untenable.
CONCLUSION:
80. For the above reasons, this Court holds:
(i) the procedural Order No. 6 dated 16.07.2025 is not an order
terminating arbitral proceedings under Section 32 of the A&C Act. It
is a withdrawal from office by each of the three members of the
erstwhile Arbitral Tribunal within the meaning of Section 15(1)(a) of
the A&C Act;
(ii) the consequence provided by the Act for such withdrawal is
‘substitution’, according to the rules that were applicable to the
appointment of arbitrators being replaced, namely Article 44.3.2 of
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CA. The parties have already substituted their respective nominee
arbitrators. The office of the presiding arbitrator having been filled by
the order dated 01.12.2025 in ARB. P. NO. 1862/2025 and having
fallen vacant on 05.01.2026, is required to be filled again.
(iii) the judgment of the Supreme Court in Harshbir Singh Pannu
(supra) supports the contention of the petitioner that a substitute
presiding arbitrator is required to be appointed by this Court.
(iv) Harshbir Singh Pannu (supra), particularly paragraphs 268-
269 thereof, support the proposition that where the mandate of an
arbitrator terminates as a result of the arbitrator withdrawing from
office, the recourse available is the appointment of a substitute
arbitrator in terms of Section 15 of the A&C Act, 1996. Further, as
elaborated hereinabove, the judgment in Harshbir Singh Pannu
(supra) is an authority for the proposition that an order of termination
of arbitral proceedings can be passed only under Section 32(2) of the
A&C Act, 1996. No such order has been passed in the present case
and as such, there is no occasion for the respondents to invoke the
remedies prescribed in Harshbir Singh Pannu (supra). As such, the
recall application filed by the respondents before the erstwhile
Arbitral Tribunal, is thoroughly misconceived.
(v) the respondents having themselves treated the procedural Order
No.6, dated 16.07.2025 as a recusal and having themselves previously
invoked Section 11(6) of the A&C Act for appointment of a presiding
arbitrator, cannot be permitted to contend to the contrary.
81. In the circumstances, it is incumbent on this Court to appoint a
Presiding Arbitrator, thereby constituting the Arbitral Tribunal for
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adjudication of the disputes between the parties under CA dated 25.03.2013.
82. Consequently, the present petition is allowed. Mr. Justice (Retd.)
Rajesh Bindal, former Judge, Supreme Court of India (Mob. No.: +91
7347025001) is appointed as the Presiding Arbitrator along with Hon'ble
Mr. Justice (Retd.) Sakha Ram Singh, former Judge of the High Court of
Allahabad (nominee arbitrator of the petitioner) and Hon'ble (Retd.) Justice
Virendrasingh Gyansingh Bisht, former Judge of the Bombay High Court
(nominee arbitrator of the respondents), to adjudicate the disputes between
the parties arising out of the CA dated 25.03.2013.
83. The aforesaid appointment shall be subject to the Presiding Arbitrator
furnishing the requisite declaration under Section 12 of the A&C Act. The
registry shall communicate a copy of this order to the substitute presiding
Arbitrator appointed forthwith.
84. The arbitral proceedings shall commence from the stage at which they
stood on 16.07.2025, subject to the discretion of the Arbitral Tribunal.
Further, as directed vide order dated 01.12.2025, in ARB. P. NO.
1862/2025, this order, insofar as the respondent no(s). 2 and 3 are concerned
remain subject to the outcome of the Arb. A (COMM) No. 16/2025.
85. Nothing in this order shall be construed as an expression of opinion of
this Court on the merits of the claims, counterclaims or defences of the
parties. The same are left open for adjudication by the Arbitral Tribunal in
accordance with law.
SACHIN DATTA, J
OCTOBER 16, 2026
at/nb
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