Holding

When the sole arbitrator’s mandate terminates under Section 29A(4), the court must substitute a new arbitrator under Section 29A(6) and cannot merely extend the expired mandate.

Summary

The appellants, a husband and wife, entered into a partnership deed containing an arbitration clause and later appointed a sole arbitrator, Mr. Anjum Javed, to resolve disputes with the respondents. The arbitrator repeatedly demanded administrative expenses, which the respondents challenged under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996, but the High Court dismissed those challenges. The arbitrator failed to render an award within the twelve‑month period prescribed by Section 29A(1) and, without an extension application, became functus officio on 28 February 2023. The appellants then filed petitions under Section 29A(6) seeking substitution of the sole arbitrator and an extension of time, but the Delhi High Court declined substitution and merely extended the arbitrator’s mandate for four months. The Supreme Court held that once the arbitrator’s mandate expires, continuation is impermissible and the court must substitute a new arbitrator under Section 29A(6); consequently, it quashed the High Court’s order, appointed a former High Court judge as the substitute arbitrator, and directed the arbitration to resume and be concluded within six months.

Issues considered

Whether the Delhi High Court erred in declining substitution of a sole arbitrator while extending his mandate under Section 29A(6) of the Arbitration and Conciliation Act, 1996.
Whether the sole arbitrator’s mandate had terminated on expiry of the statutory time limit, rendering continuation impermissible.
Whether the High Court could extend the arbitrator’s mandate without substitution when the arbitrator had become functus officio.

Legislation cited

Arbitration and Conciliation Act, 1996s. 14, s. 15, s. 23(4), s. 29A(1), s. 29A(3), s. 29A(4), s. 29A(5), s. 29A(6)

Headnote

Issue for Consideration Issue arose as regards the correctness of the order passed by the High Court declining substitution of a sole arbitrator, however, extending his mandate u/s.29A(6) of the Arbitration and Conciliation Act, 1996. Headnotes† Arbitration and Conciliation Act, 1996 arbitrator – On facts, the sole arbitrator issued directions requiring the parties to deposit the administrative expenses – Appellants sought time, in an arbitral proceeding, to move an application before the High Court u/s.29A(4) – Thereupon, the sole arbitrator adjourned the

Subjects

Substitution of sole arbitratorTime limit for arbitral awardDeposit administrative expensesTenure for the substitute arbitrator

Judgment

[2025] 12 S.C.R. 408 : 2025 INSC 1409

Mohan Lal Fatehpuria
v.
M/s Bharat Textiles & Ors.
(Civil Appeal No. 14681 of 2025)
10 December 2025
[Sanjay Kumar and Alok Aradhe,* JJ.]

Issue for Consideration
Issue arose as regards the correctness of the order passed by
the High Court declining substitution of a sole arbitrator, however,
extending his mandate u/s.29A(6) of the Arbitration and Conciliation
Act, 1996.

Headnotes†
Arbitration and Conciliation Act, 1996 – s.29A(6) – Substitution
of a sole arbitrator – On facts, the sole arbitrator issued
directions requiring the parties to deposit the administrative
expenses – Appellants sought time, in an arbitral proceeding,
to move an application before the High Court u/s.29A(4) –
Thereupon, the sole arbitrator adjourned the proceeding
sine die – Appellants then filed petitions u/s. 29A(6) seeking
substitution of the sole arbitrator and extension of tenure for
the substitute arbitrator – High Court declined substitution of
a sole arbitrator, however extended his mandate u/s.29A(6)
for a further period – Correctness:
Held: Substitution of a sole arbitrator is warranted, when his
mandate ceases to exist, to effectuate the object of the Act, which
mandates expeditious resolution of the dispute – In view of mandate
contained in s.29A(1), the sole Arbitrator was under an obligation
to pass an award within a period of one year from 01.03.2022,
i.e. on or before 28.02.2023 – However, the sole Arbitrator failed
to do so – Parties did not apply for extension of period to pass an
award – Sole arbitrator in view of mandate contained in s.29A(4)
became functus officio – Mandate of the sole Arbitrator terminated
on 28.02.2023 – When mandate of arbitrator has expired, his
continuation is impermissible – s.29A(6) empowers and obligates

* Author
[2025] 12 S.C.R. 409

Mohan Lal Fatehpuria v. M/s Bharat Textiles & Ors.

the Court to substitute the Arbitrator – In view thereof, the case
warranted the exercise of jurisdiction u/s.29A(6) – High Court erred
in granting an extension when the mandate of the sole arbitrator
had ceased to exist – Impugned order quashed and set aside –
Mandate of sole arbitrator terminated by operation of law – Former
Judge of the High Court appointed as the substituted sole arbitrator.
[Paras 11, 13, 14]

Case Law Cited
Tata Sons Pvt. Limited v. Siva Industries & Holdings Ltd. & Ors.
[2023] 9 SCR 1268 : (2023) 5 SCC 421; Cognizance for Extension
of Limitation, In Re (2022) 3 SCC 117; Rohan Builders (India) Pvt.
Ltd. v. Berger Paints India Ltd. [2024] 9 SCR 473 : 2024 SCC
OnLine SC 2494 – referred to.

List of Acts
Arbitration and Conciliation Act, 1996.

List of Keywords
Substitution of sole arbitrator; Time limit for arbitral award; Deposit
administrative expenses; Tenure for the substitute arbitrator.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14681 of
2025
From the Judgment and Order dated 22.04.2025 of the High Court
of Delhi at New Delhi in O.M.P.(MISC)(COMM.) No. 34 of 2024
With
Civil Appeal No. 14682 of 2025

Appearances for Parties
Advs. for the Appellant:
Pradeep Aggarwal, Lal Pratap Singh, Umesh Pratap Singh, Arjun
Aggarwal, Sahil Gupta, Vishal Singh, Aman Kumar.
Advs. for the Respondent(s):
S. C. Singhal, Padam Kant Saxena, Ms. Megha Gaur, Parmanand
Gaur.
410 [2025] 12 S.C.R.

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Judgment / Order of the Supreme Court

Judgment

Alok Aradhe, J.

1. Leave granted.
2. These appeals are filed against an order dated 22.04.2025 by Delhi
High Court by which it has declined substitution of a sole arbitrator
but has extended his mandate under Section 29A(6) of the Arbitration
and Conciliation Act, 1996 (hereinafter, referred to as the ‘Act’) for
a further period of four months.

FACTS
3. The appellants who are husband and wife, along with respondent
nos. 2 to 4 executed a partnership deed dated 18.05.1992 which
contained an arbitration clause. M/s. Bharat Textiles namely,
respondent no.1, was registered on 05.01.2007 as a partnership
firm. Upon disputes having arisen, the High Court by a common
order dated 13.03.2020, passed in two arbitration petitions filed
by the appellants, appointed Mr. Anjum Javed, Advocate as a sole
arbitrator. The High Court directed that a sole arbitrator shall be
entitled to fee as per the Fourth Schedule to the Act.
4. The sole arbitrator entered the reference on 20.05.2020. He thereafter
issued various directions on 03.06.2020, 21.10.2020, 09.01.2021 and
on 15.06.2021 and directed the parties to deposit various amounts
towards administrative expenses. The respondent nos.2 and 3
questioned the action of the sole arbitrator in demanding administrative
expenses, in their applications filed under Sections 14 and 15 of
the Act, seeking termination of the mandate of the sole arbitrator.
The said applications were dismissed by a common order dated
28.01.2022, passed by the High Court, inter alia on the ground that all
the expenses are required to be paid on actuals. It was further held,
that, it would be open for respondent nos. 2 and 3 to approach the
Arbitral Tribunal, to account for administrative expenses. It was also
held that the sole arbitrator is neither de jure nor de facto ineligible
to act as an arbitrator. The petitions were dismissed.
5. The sole arbitrator issued directions on 09.07.2022, 06.01.2023 and
on 14.08.2023 requiring the parties to deposit the administrative
[2025] 12 S.C.R. 411

Mohan Lal Fatehpuria v. M/s Bharat Textiles & Ors.

expenses. The appellants on 31.08.2003 sought time, in arbitral
proceeding, to move an application before the High Court under
Section 29A(4) of the Act. Thereupon, the sole arbitrator on
31.08.2023 adjourned the proceeding sine die.
6. The appellants, filed petitions under Section 29A(6) of the Act seeking
substitution of the sole arbitrator and extension of tenure, for the
substitute arbitrator. The High Court, by an order dated 22.04.2025,
inter alia held that the fee must be charged by the sole arbitrator strictly
in accordance with Fourth Schedule and administrative expenses
only on actuals with disclosure to the parties. The substitution of the
sole arbitrator was declined and time was extended to conclude the
arbitral proceeding within a period of four months. The petitions were
partly allowed. In the aforesaid factual background, these appeals
arise for our consideration.

SUBMISSIONS
7. Learned counsel for the appellant submitted that the sole arbitrator
acted in contravention of the initial order of appointment dated
13.03.2020 and charged the fee and expenses in excess of Fourth
Schedule. It is further submitted that the sole arbitrator also violated
the directions issued in the order dated 28.01.2022 passed by
the High Court. It is contended that the High Court ought to have
appreciated that the power of substitution of an arbitrator is wider
under Section 29A(6) of the Act and is not restricted to the grounds
in Sections 14 and 15 of the Act.
8. Per contra, learned counsel for the respondents submitted that no
ground is made out for substitution of the sole arbitrator. It is further
submitted that since the petitions filed by the respondents under
Sections 14 and 15 of the Act have been rejected on 24.01.2022,
therefore, a substitute arbitrator under Section 29A(6) of the Act,
cannot be appointed. Alternatively, it is contended that, in case this
Court directs substitution of an arbitrator, a former judge be appointed,
as the sole arbitrator.

ANALYSIS
9. We have considered the rival submissions made by both sides and
have perused the record. The relevant statutory provision namely,
Section 29A was inserted by Amendment Act No.3 of 2016 and
412 [2025] 12 S.C.R.

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was amended by Act No.33 of 2019. Section 29A was inserted
in the Act, due to widespread criticism of delay in conducting the
arbitration proceedings, as the delay is against the avowed object
of the Act i.e., speedy resolution of the dispute. Section 29A aims
to ensure time bound disposal of arbitration proceeding, which is
in consonance with the object of the Act. Section 29A is extracted
below for the facility of reference: -
“29A. Time limit for arbitral award.—(1) The award in
matters other than international commercial arbitration
shall be made by the arbitral tribunal within a period of
twelve months from the date of completion of pleadings
under sub-section (4) of section 23.
Explanation.—For the purpose of this sub-section, an
arbitral tribunal shall be deemed to have entered upon
the reference on the date on which the arbitrator or all the
arbitrators, as the case may be, have received notice, in
writing, of their appointment.
Provided that the award in the matter of international
commercial arbitration may be made as expeditiously as
possible and endeavour may be made to dispose of the
matter within a period of twelve months on the date of
completion of pleadings under sub-section (4) of Section
23.
(2) If the award is made within a period of six months from
the date the arbitral tribunal enters upon the reference, the
arbitral tribunal shall be entitled to receive such amount
of additional fees as the parties may agree.
(3) The parties may, by consent, extend the period specified
in sub-section (1) for making award for a further period
not exceeding six months.
(4) If the award is not made within the period specified in
sub-section (1) or the extended period specified under sub-
section (3), the mandate of the arbitrator(s) shall terminate
unless the Court has, either prior to or after the expiry of
the period so specified, extended the period:
Provided that while extending the period under this
sub-section, if the Court finds that the proceedings have
[2025] 12 S.C.R. 413

Mohan Lal Fatehpuria v. M/s Bharat Textiles & Ors.

been delayed for the reasons attributable to the arbitral
tribunal, then, it may order reduction of fees of arbitrator(s)
by not exceeding five per cent for each month of such delay.
Provided further that where ap application under
sub-section (5) is pending, the mandate of the arbitrator
shall continue till the disposal of the said application:
Provided also that the arbitrator shall be given an
opportunity of being heard before the fees is reduced.
(5) The extension of period referred to in sub-section (4)
may be on the application of any of the parties and may
be granted only for sufficient cause and on such terms
and conditions as may be imposed by the Court.
(6) While extending the period referred to in sub-section (4),
it shall be open to the Court to substitute one or all of the
arbitrators and if one or all of the arbitrators are substituted,
the arbitral proceedings shall continue from the stage
already reached and on the basis of the evidence and
material already on record, and the arbitrator(s) appointed
under this section shall be deemed to have received the
said evidence and material.
(7) In the event of arbitrator(s) being appointed under this
section, the arbitral tribunal thus reconstituted shall be
deemed to be in continuation of the previously appointed
arbitral tribunal.
(8) It shall be open to the Court to impose actual or
exemplary costs upon any of the parties under this section.
(9) An application filed under sub-section (5) shall be
disposed of by the Court as expeditiously as possible and
endeavour shall be made to dispose of the matter within
a period of sixty days from the date of service of notice
on the opposite party.
10. Section 29A of the Act has been held to be remedial in nature and is
made applicable to all pending arbitral proceedings as on 30.08.20191.

1 TATA SONS PVT. LIMITED v. SIVA INDUSTRIES & HOLDINGS LTD. & ORS. (2023) 5 SCC 421
414 [2025] 12 S.C.R.

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Section 29A(1) mandates that an award has to be made within a
period of twelve months from the date of completion of pleadings
under Section 23(4) of the Act. 29A(3) enables the parties by consent
to extend the period specified in sub-section (1) for making the
award for a further period not exceeding six months. Section 29A(4)
mandates that if the award is not made within the period mentioned
in sub-section (1) or the extended period specified in sub-section
(3), the mandate of the Arbitrator shall terminate, unless the court,
has, either prior to or after the expiry of the period so specified,
extended the period. Section 29A(6) provides that while extending
the period referred to in sub-section (4), the court may substitute
one or all of the Arbitrators and if one or all of the Arbitrators are
substituted, the arbitral proceeding shall continue from the stage
already reached.
11. The undisputed facts which emerge from the record before us, are
that, the sole Arbitrator entered the reference on 20.05.2020 and
directed the parties to file the statements of claim and defence. The
period of six months prescribed under Section 23(4) of the Act, for
completion of pleadings expired on 19.11.2020. The period from
15.03.2020 till 28.02.2022 deserves to be excluded on account of
pandemic caused by Covid-19 virus2. In view of mandate contained in
Section 29A(1) of the Act, the sole Arbitrator was under an obligation
to pass an award within a period of one year from 01.03.2022, i.e.
on or before 28.02.2023. However, the sole Arbitrator failed to do so.
The parties did not apply for extension of period to pass an award.
The sole arbitrator, in view of mandate contained in Section 29A(4)
became functus officio.
12. We are conscious of the fact that a two Judge Bench of this
Court3 has interpreted the word ‘terminate’ in Section 29A(4),
while dealing with an issue whether an application for extension
of time for passing the arbitral award is maintainable even after
the expiry of twelve months or extended six month period, as the
case may be. It has been held that on expiry of the initial period of
six month and extended period of six months, the Arbitral Tribunal
becomes functus officio but not in absolute terms. It has further

2 COGNIZANCE FOR EXTENSION OF LIMITATION, IN RE (2022) 3 SCC 117
3 ROHAN BUILDERS (INDIA) PVT. LTD. v. BERGER PAINTS INDIA LTD., 2024 SCC ONLINE SC 2494
[2025] 12 S.C.R. 415

Mohan Lal Fatehpuria v. M/s Bharat Textiles & Ors.

been held that the termination of arbitral mandate is conditional
upon the filing of an application for extension and cannot be treated
termination stricto sensu. It has also been held that the legislature
by using the word ‘terminate’ intends to affirm the principle of
party autonomy. However, the fact remains that on expiry of initial
period or extended period, the arbitrator cannot proceed with the
arbitration proceeding and his mandate terminates, subject to an
order which may be passed by the Court in a proceeding under
Section 29A(4) of the Act.
13. An arbitrator or an Arbitral Tribunal is not always statutory. It is,
ordinarily, a forum chosen by the parties for resolution of their
disputes. An Arbitral Tribunal with the consent of the parties
decides their disputes. In the instant case, as stated supra, the
mandate of the sole Arbitrator had terminated on 28.02.2023. When
mandate of arbitrator has expired, his continuation is impermissible.
Section 29A(6) empowers and obligates the Court to substitute
the Arbitrator. In so far as submission of the respondents, that,
since the petition filed under Sections 14 and 15 of the Act was
rejected on 24.01.2022 by the High Court is concerned, suffice it to
say that the Act provides separate remedies in the circumstances
mentioned in Sections 14, 15 and 29A of the Act. In any case, on
24.01.2022, the mandate of the sole arbitrator was not terminated.
Therefore, the order dated 24.01.2022 does not have any impact
on the decision of the petition under Section 29A of the Act filed
by the appellants. The substitution of a sole arbitrator is warranted,
when his mandate ceases to exist, to effectuate the object of the
Act, which mandates expeditious resolution of the dispute. In
view of the statutory scheme and undisputed factual position, we
are satisfied that the case warranted the exercise of jurisdiction
under Section 29A(6) of the Act. The High Court erred in granting
an extension when the mandate of the sole arbitrator had ceased
to exist.

CONCLUSION
14. For the aforementioned reasons, the impugned order dated
22.04.2025 is quashed and set aside. The mandate of sole arbitrator
Mr. Anjum Javed stands terminated by operation of law. Mr. Justice
Najmi Waziri, Former Judge of Delhi High Court is appointed as the
416 [2025] 12 S.C.R.

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substituted sole arbitrator. The arbitral proceeding shall resume from
the stage already attained and be concluded within six months from
the date of receipt of a copy of this order.
15. In the result, appeals are allowed. There shall be no order as to costs.

Result of the case: Appeals allowed.

†
Headnotes prepared by: Nidhi Jain