Withdrawal of Arbitrator with Direction to Continue Proceedings Constitutes Termination of Mandate under Section 14, Not Section 32.

The Petitioner filed a petition under Section 15(2) of the Arbitration and Conciliation Act, 1996 ("the Act") seeking the appointment of a substitute arbitrator

On 23.02.2026, the previous Sole Arbitrator passed an order noting that "continuation of the proceedings has for any other reason become impossible" following a contentious hearing regarding the production of additional documents and oral evidence

The Arbitrator returned the reference to the Delhi International Arbitration Centre (DIAC) for the nomination of another arbitrator, explicitly directing that proceedings continue from the current stage

The Respondent contested the petition, arguing that the order was passed under Section 32(1)(b) of the Act (termination of proceedings), and thus the Petitioner’s only remedy was to seek a recall of the order from the Arbitrator himself

1. Whether the Arbitrator’s order dated 23.02.2026 constituted a termination of the arbitral proceedings under Section 32 or a termination of the arbitrator's mandate under Section 14 of the Act.

2. Whether the Court has the jurisdiction to appoint a substitute arbitrator under Section 15(2) in the given circumstances.

Under Section 14, the mandate of an arbitrator terminates if they withdraw from office or become de jure or de facto unable to perform functions, allowing for a substitute arbitrator while the proceedings survive

Section 32 provides for the final termination of the arbitral proceedings themselves, which terminates the mandate as a consequence

The court also considered the Supreme Court precedent in Harshbir Singh Pannu v. Jaswinder Singh (2025), which held that an Arbitral Tribunal possesses inherent procedural power to recall an order terminating proceedings under Section 32

The Court analyzed the "holistic" substance of the Arbitrator’s order rather than its literal reference to Section 32(1)(b)

It reasoned that because the Arbitrator explicitly directed the DIAC to nominate a successor and ordered the proceedings to "continue from the stage where it is at present," he clearly did not intend to terminate the proceedings themselves

The Court found that the Arbitrator had simply withdrawn from the office due to perceived acrimony, which falls squarely under Section 14(1)(b)

Consequently, the principles from Harshbir Singh Pannu, which apply to the finality of proceedings under Section 32, were held inapplicable here because the arbitral reference remained alive

The Court allowed the petition and appointed Justice (Retd.) Kurian Joseph as the substitute Sole Arbitrator [para. 19]. The Court further directed that the arbitral proceedings shall continue from the stage they had reached as of 23.02.2026