After Two Arbitrators Die, Orissa HC Reconstitutes Iron-Ore Tribunal, Holding Section 29A Doesn’t Apply Once Its Mandate Ends

The parties’ predecessors entered into two agreements in 2002, each containing an arbitration clause providing for two party-appointed arbitrators and arbitration under the Arbitration and Conciliation Act, 1996.

After disputes arose, the parties appointed arbitrators, and the Supreme Court appointed a presiding arbitrator in 2011.

The petitioner filed its claim; a counterclaim was later accepted by the tribunal, and the petitioner challenged that decision in a writ petition.

While that petition was pending, the petitioner’s nominee and the presiding arbitrator died.

The writ petition was withdrawn in 2023 with liberty to raise the disputes before a newly constituted tribunal.

The petitioner then nominated a replacement arbitrator and sought the opposite party’s confirmation of its surviving nominee, but received no response.

It applied under Section 11(6) for appointment of a presiding arbitrator.

The opposite party argued that the arbitration was time-barred because the period under Section 29A had expired.

Section 15(1)(a) provides for termination of an arbitrator’s mandate when the arbitrator withdraws or is otherwise unable to act; under Section 15(2), a substitute arbitrator is to be appointed according to the rules applicable to the appointment of the arbitrator being replaced.

In Yashwith Construction P. Ltd. v. Simplex Concrete Piles India Ltd., (2006) 6 SCC 204, and Huawei Technologies Company Limited v. Sterlite Technologies Limited, (2016) 1 SCC 721, the Supreme Court held that the parties’ agreed appointment procedure constitutes the relevant “rules” for Section 15(2).

Shailesh Dhairyawan v. Mohan Balkrishna Lulla, (2016) 3 SCC 619, confirms that, absent an agreement excluding substitution expressly or by necessary implication, a substitute arbitrator may be appointed under that procedure.

Section 11(6) permits court appointment where the agreed appointment procedure is not effective.

The Court held that Section 29A did not bar the appointment in this case once the tribunal’s mandate had terminated.

The Court treated the deaths of the petitioner’s nominee and the presiding arbitrator as terminating the tribunal’s mandate, but not the arbitration agreement.

Nothing in the clause indicated that the arbitration was personal to the deceased arbitrators or that vacancies could not be filled; the agreed appointment procedure therefore continued to govern substitution.

The petitioner had nominated its replacement, and because the opposite party’s nominee remained alive and had not withdrawn, the Court presumed that nominee’s appointment continued.

The Court rejected the Section 29A objection, reasoning that the tribunal had become defunct upon termination of its mandate and that this did not prevent constitution of a substituted tribunal.

The reconstituted tribunal was directed to proceed from the stage at which the earlier tribunal became defunct, under the aegis of the High Court of Orissa Arbitration Centre, and to endeavour to adhere to the time limit under Section 29A.

The petition was disposed of accordingly.