Supreme Court Clarifies: Arbitrator Cannot Continue After Mandate Expires, Substitution Mandatory Under Arbitration Act
Court says expired mandate makes arbitrator functus officio; extension without substitution is impermissible
Ruling strengthens time-bound arbitration and ensures speedy resolution of disputes
By Our Legal Reporter
New Delhi: December 16, 2025:
In a landmark judgment, the Supreme Court of India has ruled that an arbitrator cannot continue once their mandate has expired under the Arbitration and Conciliation Act, 1996. The Court emphasized that substitution of the arbitrator is mandatory under Section 29A (6), reinforcing the principle of time-bound arbitration.
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The ruling came in the case of Mohan Lal Fatehpuria & Anr. v. Bharat Textiles & Ors., where the Delhi High Court had erroneously extended the mandate of a sole arbitrator instead of substituting him. The Supreme Court set aside the High Court’s order, clarifying the law and strengthening arbitration jurisprudence in India.
Case Background
- The dispute involved partners in a textile firm governed by an arbitration clause.
- In 2020, the Delhi High Court appointed Mr. Anjum Javed as sole arbitrator.
- The arbitrator’s mandate expired after the statutory period under Section 29A.
- The High Court extended his mandate for four months instead of substituting him.
- The appellants challenged this order before the Supreme Court.
Supreme Court’s Observations
The Bench comprising Justice Sanjay Kumar and Justice Alok Aradhe made several key observations:
- Mandate expiry is final: Once the statutory period lapses, the arbitrator becomes functus officio (without authority).
- Substitution mandatory: Section 29A (6) obligates courts to substitute the arbitrator when the mandate ceases.
- Extension impermissible: Courts cannot revive an expired mandate; only substitution ensures compliance with law.
- Time-bound arbitration: The ruling reinforces the objective of speedy resolution under the Arbitration Act.
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Relevant Legal Provisions
- Section 29A (4): Mandate of arbitrator terminates if award is not made within 12 months (extendable to 18 months).
- Section 29A (6): Court must substitute arbitrator when mandate ceases.
- Section 14 & 15: Provide grounds and procedure for termination and substitution of arbitrators.
The Court clarified that these provisions must be interpreted strictly to uphold the integrity of arbitration timelines.
Wider Implications
This ruling has significant implications for arbitration practice in India:
- For Parties:
- Ensures disputes are resolved within statutory timelines.
- Prevents arbitrators from continuing indefinitely.
- Provides clarity on substitution procedure.
- For Arbitrators:
- Reinforces accountability to deliver awards within deadlines.
- Prevents misuse of extensions.
- For Courts:
- Clarifies their role in enforcing substitution under Section 29A (6).
- Reduces scope for judicial error in extending expired mandates.
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Expert Reactions
- Legal Experts: Call the ruling a “watershed moment” in arbitration law, ensuring discipline and efficiency.
- Arbitration Practitioners: Welcome the clarity, saying it will reduce delays and strengthen India’s reputation as an arbitration hub.
- Academics: Note that the judgment aligns with global best practices of time-bound arbitration.
Similar Cases and Context
- The Supreme Court has previously emphasized minimal judicial interference in arbitration.
- This ruling builds on that principle, ensuring courts act strictly within statutory limits.
- It also strengthens India’s arbitration framework, which has been evolving to attract international investors.
Conclusion
The Supreme Court’s ruling in Mohan Lal Fatehpuria v. Bharat Textiles is a landmark in arbitration law. By holding that an arbitrator cannot continue after mandate expiry and must be substituted, the Court has reinforced the principle of time-bound dispute resolution.
For parties, arbitrators, and courts alike, the message is clear: arbitration must be efficient, disciplined, and strictly within statutory timelines.
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