Manipur High Court: The Single Judge Bench of M. Sundar, CJ., set aside an arbitral award and recommence the arbitration through a fresh, de novo proceeding before a mutually acceptable sole arbitrator by the parties. The Court directed the proceedings would resume from the stage which has been already completed by the previous arbitrator.
Background
The present arbitration petition arose from a dispute relating to the Thoubal Multipurpose Project Agreement dated 7 December 1989. The petition was filed before the High Court on 30 March 2026 under Sections 11(6), 14, and 15, Arbitration and Conciliation Act, 1996, seeking termination of the mandate of the existing “sole arbitrator”, substitution of the arbitrator and appointment of a new sole arbitrator.
The parties on both sides, submitted in one voice that the petitioner-company and State-respondent have arrived at a consensus and requested the Court to dispose of the arbitration petition by way of a consent order. The petitioner confirmed that it received the arbitral award only on 2 June 2026, whereas the State received the same earlier, on 26 March 2026.
The parties informed the Court that certain issues had arisen concerning the validity and procedural aspects of the award, including questions relating to compliance with Section 31(5), Arbitration and Conciliation Act, 1996, which governs the delivery of signed copies of arbitral awards to the parties. Without inviting the Court to examine these issues on their merits, both parties agreed that it would be appropriate to set aside the arbitral award by consent and recommence the arbitration through a fresh, de novo proceeding before a mutually acceptable sole arbitrator.
The sole arbitrator who was agreed upon by both sides was Justice D. Krishnakumar, Former Chief Justice of Manipur High Court. The State submitted that he had obtained instructions from the Chief Secretary and other competent authorities authorising the State to consent to the proposed course of action.
Decision and Analysis
The Court recognising the consensual nature of the request, deemed it appropriate to record its appreciation for the fair stand taken by both parties in resolving the procedural complications without prolonged litigation. The Court recorded their statement and acknowledged that the consent of both parties was unequivocal.
Justice D. Krishnakumar was requested to enter upon arbitration of Thoubal Multipurpose Project Agreement, conduct arbitration proceedings and render an arbitral award. The substitution effectively terminated the mandate of the previous arbitrator, and the Court expressly declared that the authority of Joykumar Singh stood terminated upon the passing of the consent order.
The Court held that the newly appointed sole arbitrator, Justice D. Krishnakumar, will proceed based on the pleadings which have already been completed before erstwhile arbitrator. The Court further specified to make it clear that arbitrator, will proceed from the framing of issues or admission and denial stage. To avoid duplication of proceedings and unnecessary delay, the parties also agreed that the newly appointed arbitrator would utilise the pleadings that had already been completed before the former arbitrator. Rather than recommencing the arbitration from the filing of claims and defences, the proceedings would resume from the stage of framing of issues and admission or denial of documents. This arrangement preserved the procedural work already completed while ensuring that the merits of the dispute would be determined afresh through a de novo arbitration before the substituted arbitrator.
The order expressly stated that no opinion or finding was being expressed on the merits of the claims, counterclaims, or the correctness of the arbitral award. Consequently, neither party would derive any advantage or suffer any prejudice from the Court’s order regarding the substantive issues in dispute.
The Court also issued directions concerning the financial and administrative aspects of the arbitration. It ordered that the fees payable to the newly appointed sole arbitrator would be governed by Schedule IV, Arbitration and Conciliation Act, 1996. Additionally, all other expenses incidental to the conduct of the arbitral proceedings, including travel, accommodation, secretarial assistance, and related administrative costs, were directed to be shared equally by the petitioner and the State. This equal allocation of costs reflected the consensual nature of the order and ensured fairness in the conduct of the renewed arbitration.
To facilitate a seamless transition, the Court directed Joykumar Singh to hand over the complete arbitral record, including all proceedings conducted until that stage, to the State. The State, in turn, undertook to transmit the entire record to Justice D. Krishnakumar, with due intimation to the petitioner. This direction ensured continuity of the proceedings and enabled the newly appointed arbitrator to commence the arbitration without procedural impediments.
The Court accordingly disposed of the arbitration petition by recording the consent of the parties and issuing consequential directions for a fresh arbitration before the newly appointed sole arbitrator. The Court emphasised that the earlier arbitral award stood set aside only to facilitate de novo adjudication and that no findings on the merits had been recorded. The Court specifically clarified that the award was being set aside solely on the basis of the parties’ consent and for the limited purpose of facilitating a fresh arbitration.
[Progressive Construction Ltd. v. State of Manipur, 2026 SCC OnLine Mani 347, decided on 12-6-2026]
*Judgment authored by: Chief Justice M. Sundar
Advocates who appeared in this case :
For the Petitioner: Ch. Momon, P. Mohith Reddy, Advocates
For the Respondent: Phungyo Zingkhai, Lenin Singh Hijam, Advocate General, Athouba Khaidem, Senior Counsel
