Delhi HC: Recusal of entire Arbitral Tribunal does not terminate proceedings under Section 32(2)(c) A&C Act
- Statutes
- Arbitration and Conciliation Act, 1996 — s.11(6), s.15, s.32(2)(c)
- Source
- Indian Kanoon (Delhi HC)
The Delhi High Court, in National Highways Authority of India vs. M S Irb Westcoast Tollway Ltd & Ors, held that the recusal of all arbitrators does not constitute termination of arbitral proceedings under Section 32(2)(c) of the A&C Act. The Court clarified that such a situation necessitates the appointment of a substitute arbitrator under Section 15, not a recall of a termination order.
Ratio Decidendi · Legal Principle Established
The recusal of all members of an arbitral tribunal, even if it renders the tribunal functus officio, does not amount to a 'termination of the arbitral proceedings' under Section 32(2)(c) of the Arbitration and Conciliation Act, 1996. Instead, it creates a vacancy requiring the appointment of a substitute arbitrator under Section 15 of the Act.
Practice & Procedural Impact for Advocates
Advocates should seek appointment of substitute arbitrators under Section 15 A&C Act when an entire tribunal recuses, rather than challenging a non-existent termination order. Litigants should be aware that such recusal does not conclude their arbitration, preserving their right to continue the dispute resolution process.
Key Legal Takeaways
- 1Recusal of all arbitrators is distinct from termination of proceedings.
- 2Section 32(2)(c) A&C Act applies to termination by the tribunal on specific grounds, not automatic cessation due to recusal.
- 3Section 15 A&C Act is the correct provision for appointing substitute arbitrators in case of an entire tribunal's recusal.
- 4The Supreme Court's ruling in Harshbir Singh Pannu is distinguishable when the tribunal recuses, as it pertains to actual termination orders.
- 5A petition under Section 11(6) for appointment of a presiding arbitrator remains maintainable in such scenarios.
The Legal Issue
The National Highways Authority of India (NHAI) filed a petition under Section 11(6) of the Arbitration & Conciliation Act, 1996 (A&C Act) seeking the appointment of a presiding arbitrator. The respondents resisted the petition, arguing that the arbitral proceedings had terminated under Section 32(2)(c) of the A&C Act because all three members of the originally constituted Arbitral Tribunal had recused themselves via a procedural order. The respondents contended that, in light of the Supreme Court's judgment in *Harshbir Singh Pannu & Anr. v. Jaswinder Singh, 2025 SCC OnLine SC 2742*, the only remedy was to seek a recall of the termination order before the same Tribunal.
Court's Reasoning
The Delhi High Court rejected the respondents' contention, clarifying the distinction between the recusal of an arbitral tribunal and the termination of arbitral proceedings under Section 32(2)(c) of the A&C Act. The Court held that the recusal of all arbitrators, while rendering the tribunal functus officio, does not automatically lead to the termination of the arbitral proceedings themselves. Section 32(2)(c) contemplates termination by the arbitral tribunal when it finds that the continuation of the proceedings has become unnecessary or impossible for reasons other than those specified in sub-sections (a) and (b). The Court reasoned that the recusal of arbitrators creates a vacancy in the tribunal, which is a situation squarely covered by Section 15 of the A&C Act, dealing with the appointment of substitute arbitrators. The Court distinguished *Harshbir Singh Pannu*, noting that it dealt with a situation where the tribunal had actually passed an order of termination, not merely recused.
Why It Matters
This decision is significant for clarifying the procedural implications when an entire arbitral tribunal recuses. It establishes that such a recusal does not terminate the arbitral proceedings, thereby preventing parties from being left without a forum for dispute resolution. Instead, it triggers the mechanism for appointing substitute arbitrators under Section 15 of the A&C Act. This ensures the continuity of the arbitration process and prevents unnecessary delays or the need to initiate fresh arbitration. For practitioners, it underscores the importance of correctly identifying the applicable statutory provision—Section 15 for arbitrator vacancies versus Section 32 for actual termination orders—to pursue the appropriate remedy.