Arbitrators’ recusal does not terminate arbitration; Delhi High Court rules vacancies must be filled by substitutes false

NHAI and respondent no. 1 were parties to a Concession Agreement dated 25 March 2013 containing an arbitration clause.

Following several sets of claims, a three-member arbitral tribunal was constituted.

On 16 July 2025, all three arbitrators recused themselves after a disagreement concerning their fees; Procedural Order No. 6 recorded their recusal but did not expressly terminate the proceedings or invoke Section 32 of the Arbitration and Conciliation Act, 1996 (“the Act”).

The parties nominated substitute arbitrators, and, at the respondents’ instance, the Court appointed a presiding arbitrator under Section 11(6). That arbitrator later recused himself. NHAI then filed the present petition to fill the resulting vacancy.

The respondents objected that the earlier tribunal’s recusal had terminated the arbitral proceedings and that the remedy was recall followed, if necessary, by an application under Section 14(2), as discussed in Harshbir Singh Pannu.

1. Whether the simultaneous recusal of all members of the tribunal, without an order under Section 32, terminated the arbitral proceedings or instead terminated the arbitrators’ mandates, requiring substitution under Section 15(2) of the Act.

2. Whether NHAI’s petition under Section 11(6) to appoint a substitute presiding arbitrator was maintainable in light of Harshbir Singh Pannu.

Sections 14(1)(b) and 15(1)(a) of the Act provide for termination of an arbitrator’s mandate upon withdrawal from office; Section 15(2) requires appointment of a substitute according to the rules applicable to the original appointment.

Sections 15(3) and 15(4) preserve the continuity of proceedings and the validity of prior orders despite a change in the tribunal’s composition.

By contrast, Section 32(2) provides for termination of arbitral proceedings by an order of the tribunal, and Section 32(3) makes termination of the tribunal’s mandate a consequence of that order.

In Yashwith Constructions (P) Ltd. v. Simplex Concrete Piles India Ltd., (2006) 6 SCC 204, the Supreme Court held that withdrawal attracts substitution under Section 15(2).

Harshbir Singh Pannu & Anr. v. Jaswinder Singh, 2025 SCC OnLine SC 2742, distinguishes termination of an arbitrator’s mandate from termination of proceedings and holds that proceedings terminate only by a final award or an order under Section 32(2); where proceedings have been terminated by such an order, the prescribed recourse is recall before the tribunal and, if necessary, an application under Section 14(2), rather than a fresh Section 11 petition.

Section 13(2) of the General Clauses Act, 1897 provides that the singular includes the plural, absent a contrary context.

Procedural Order No. 6 used the term “recuse,” did not refer to Section 32, and contained no finding that continuation of the proceedings had become unnecessary or impossible; nor did it record a default under Section 38.

The Court therefore treated it as each arbitrator’s withdrawal from office under Section 15(1)(a), not as an order terminating the reference.

The fact that all three arbitrators withdrew simultaneously did not alter the statutory consequence: each mandate terminated and was subject to substitution, while the proceedings continued.

Harshbir Singh Pannu did not bar the petition because it concerned an express termination order under Section 32, which was absent here; its reasoning instead recognised substitution under Section 15 when an arbitrator withdraws.

The respondents’ own nomination of a substitute arbitrator and prior Section 11 petition for appointment of a presiding arbitrator further contradicted their contention that the reference had ended.

The proceedings therefore continued, and the vacancy in the presiding arbitrator’s office was to be filled by substitution under Section 15(2) and the Concession Agreement’s appointment mechanism.

The petition was allowed, and Mr. Justice (Retd.) Rajesh Bindal was appointed presiding arbitrator alongside the parties’ nominee arbitrators, subject to his declaration under Section 12.

The proceedings were directed to resume from the stage reached on 16 July 2025, subject to the tribunal’s discretion; the position concerning respondents nos. 2 and 3 remained subject to the outcome of the pending appeal.