Article 137 cannot extinguish a subsisting arbitral reference seeking substitution under Section 15(2).

The arbitration arose from an agreement dated 7 October 2005. After the petitioner invoked arbitration in 2013, the High Court appointed Justice V.M. Kanade as sole arbitrator in 2018. Pleadings were completed, the petitioner’s evidence was concluded, and the matter had reached cross-examination of the respondent.

The arbitrator withdrew on 20 August 2021 after being appointed Lokayukta of Maharashtra, leaving the arbitral reference without an arbitrator.

The petitioner later corresponded with the respondent about possible substitutes, including in June 2024, and filed this petition in 2025 seeking appointment of a substitute arbitrator under Section 15(2) of the Arbitration and Conciliation Act, 1996.

The respondent objected that the petition was barred by Article 137 of the Limitation Act, 1963 and also relied on Section 29A of the Arbitration Act.

1. Whether the petition seeking appointment of a substitute arbitrator under Section 15(2) was barred by Article 137 of the Limitation Act, 1963.

2. Whether the expiry of the period under Section 29A barred substitution, given that the arbitration commenced before the 2015 amendments.

Section 15(1)(a) of the Arbitration and Conciliation Act, 1996 terminates an arbitrator’s mandate when the arbitrator withdraws from office; Section 15(2) provides for appointment of a substitute under the rules applicable to the original appointment, while Sections 15(3) and (4) address the effect of substitution on prior proceedings.

Article 137 of the Limitation Act prescribes a three-year limitation period for applications to which it applies.

The judgment referred to Tricolor Hotels Ltd. v. Dinesh Jain, 2025 INSC 1132, concerning limitation for an application under Section 15(2).

Section 29A concerns the time for making an arbitral award; Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 provides that the amendments do not apply to arbitral proceedings commenced before the amendment unless the parties otherwise agree.

The judgment also considered M/s B and T AG v. Ministry of Defence, 2023 SCC OnLine SC 657; Tata Sons Private Limited v. Siva Industries and Holdings Limited, (2023) 5 SCC 421; Shree Vishnu Constructions v. Engineer-in-Chief, Military Engineering Service, (2023) 8 SCC 329; and Smt. Shilpa Datar v. M/s Legancy Global Projects Pvt. Ltd., W.P. No. 52489 of 2019.

The Court treated the arbitrator’s withdrawal as creating a vacancy in an existing arbitral tribunal, not terminating the arbitral reference. It emphasized that substantial proceedings had already occurred and that the petitioner continued to seek a substitute, while the respondent participated in correspondence about the way forward.

On limitation, the Court ultimately rejected the objection, relying on the continuing arbitral reference and the parties’ subsequent conduct.

It also held that Section 29A did not bar substitution because the proceedings commenced under Section 21 in 2013, before the 2015 amendment, and Section 26 excluded the amendment’s application absent agreement otherwise.

The reasoning on Article 137 is internally inconsistent: paragraphs 27 and 57 proceed on the basis that Article 137 applies but reject the objection in light of the facts, whereas paragraphs 55 and the final conclusion state that Article 137 has no application.

It appointed Justice Jagmohan Singh Bhatiya, former Judge of the Bombay High Court, as sole substitute arbitrator, directed him to continue the proceedings from the stage reached, and left him to determine under Section 15(3) and (4) whether any prior evidence or proceedings should be repeated.

The Court’s conclusion on Article 137 should be read with the inconsistency identified above: the judgment both states that Article 137 does not apply and, elsewhere, rejects the limitation objection on the footing that it does apply.