Mandate of Arbitrator to be terminated if there is undue delay in dispute resolution process

Madhya Pradesh High Court: In three separate writ petitions, the termination of the mandate of the Arbitrator and the appointment of a new arbitrator was allowed by the Court.

The main question before the Court was whether the mandate of an Arbitrator can be terminated and a new arbitrator be appointed in his place. The parties had entered into an agreement which had an arbitration clause. When a dispute arose between the parties, a single Arbitrator was appointed to resolve the dispute.

The Court observed that in these cases the Arbitrator did not proceed with the dispute resolution process after 14.03.2009 even though he was free to proceed with the matter. A reading of Section 14(1)(1) of the Arbitration and Conciliation Act shows that the mandate of the Arbitrator shall terminate if he becomes unable to perform his duties de jure or de-facto or he fails to act without undue delay. Here the mandate of the Arbitrator was held to be terminated due to the undue delay caused in the proceedings.

As to the question of appointment of a new Arbitrator, the Court stated that since mandate of the previous Arbitrator stands terminated due to undue delay, a suitable Arbitrator can be appointed for the present case as the arbitration clause as well as the dispute is still existent. [Swadesh kumar Agrawal v. Dinesh Kumar Agrawal, 2017 SCC OnLine MP 1180 decided on 07.09.2017]

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