Withdrawal of arbitration proceedings with liberty to recommence does not bar a fresh Section 11 application.

The Applicant sought appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, in disputes arising from a loan agreement dated 3 May 2024.

The agreement’s Clause 8.2 provided for a sole arbitrator appointed by the lender.

The Applicant had previously initiated two arbitration proceedings concerning the transaction, both of which it said were withdrawn with liberty to commence fresh proceedings; the Respondents argued that a fresh Section 11 application was barred by abandonment and that the Applicant should instead seek substitution of the earlier arbitrator under Section 15(2).

The Court found no material showing that either earlier proceeding remained pending and accepted that both had been withdrawn with liberty to take fresh proceedings.

Whether the Applicant could maintain a fresh Section 11 application after withdrawing earlier arbitration proceedings concerning the same transaction.

Whether the Applicant was required to seek substitution of the earlier sole arbitrator under Section 15(2), rather than seek appointment of a tribunal under Section 11.

Section 11 of the Arbitration and Conciliation Act, 1996, concerns appointment of an arbitrator where the agreed appointment procedure has not resulted in a valid appointment.

The principles of Order XXIII Rule 1 of the Code of Civil Procedure, 1908, may apply to Section 11 proceedings: a fresh proceeding on the same cause of action may be barred where an earlier proceeding was withdrawn without liberty to bring a fresh one; abandonment, however, is not readily inferred (Rajiv Gaddh v. Subodh Parkash, 2026 INSC 302; Dani Wooltex Corporation v. Sheil Properties Pvt. Ltd., (2024) 7 SCC 1).

Section 18’s equal-treatment principle extends to the constitution of the tribunal, requiring parties to have an equal say in that process.

Under Bhadra International (India) Pvt. Ltd. v. Airports Authority of India, 2026 SCC OnLine SC 7, an arbitrator ineligible under Section 12(5) read with the Seventh Schedule lacks a valid mandate; Section 14 read with Section 15 provides for court intervention and substitution where such a mandate is terminated.

Section 15(2) applies where an existing arbitral mandate has ended and a vacancy must be filled.

The Court held that the earlier proceedings had been withdrawn with liberty and that no proceeding remained pending; accordingly, the bar under Order XXIII Rule 1 did not apply, and the fresh application was not an attempt to revive a pending reference.

It also found that Clause 8.2 gave the lender unilateral control over appointment, without equal participation by the Respondents, contrary to the equal-treatment principle described in Bhadra International.

Section 15(2) did not require the Applicant to seek substitution because the earlier proceedings had been withdrawn and there was no continuing arbitral proceeding or surviving mandate for which a vacancy needed to be filled.

It appointed Mr. Jash Gandhi as sole arbitrator to adjudicate the disputes arising from the loan agreement, directed the parties to share the tribunal’s costs in the first instance, and left all issues on the merits open before the tribunal.