IMPORTANT POINT
Termination of arbitral proceedings – Arbitrator is empowered to withdraw from his office, which terminates his mandate – However, arbitral proceedings continue by Arbitrator's substitution – Mere absence in proceedings or failure to participate does not, per se, amount to abandonment.

1. Leave granted.

2. In this appeal, the issue involved is about the legality and validity of the order of termination of the arbitral proceedings under clause (c) of sub­section (2) of Section 32 of the Arbitration and Conciliation Act, 1996 (for short, ‘the Arbitration Act’) passed by the Arbitral Tribunal.

FACTUAL ASPECTS

3. A brief reference to the factual aspects will be necessary to appreciate the issue. The first appellant, Dani Wooltex Corporation, is a partnership firm that owned certain land in Mumbai. The first respondent, Sheil Properties (for short, ‘Sheil’), a private limited company, was engaged in real estate development. The second respondent, Marico Industries (for short, ‘Marico’), is also a limited company in the consumer goods business. A part of the first appellant's property was permitted to be developed by Sheil under the Development Agreement dated 11th August 1993 (for short, ‘the Agreement’). A Memorandum of Understanding (MOU) was executed by and between the first appellant and Marico, by which the first appellant agreed to sell another portion of its property to Marico. Under the MOU, Marico was given the benefit of a certain quantity of FSI/TDR. Marico issued a public notice inviting objections, to which Sheil submitted an objection and stated that any transaction between the first appellant and Marico would be subject to the Agreement. The dispute between the first appellant and Sheil led Sheil to institute a suit (Suit no.2541 of 2006) for the specific performance of the MOU as modified by the alleged consent terms. The first appellant and Marico were parties to the said suit. Marico also filed a suit (Suit no.2116 of 2011) against the first appellant herein, and Sheil was also made a party defendant to the suit. A consensus was reached amongst the three parties, and a senior Member of the Bar was appointed as the sole Arbitrator. The order of appointment of the sole Arbitrator was passed on 13th October 2011 in the suit filed by Marico. The order records that the dispute in the suit was referred to the arbitration. On 17th November 2011, the suit filed by Sheil was disposed of by referring the dispute in the said suit to the same sole Arbitrator. Thus, the Arbitral Tribunal had to deal with the claims filed by Sheil and Marico, both against the first appellant. Both Sheil and Marico filed their respective statements of claim. It appears that the arbitral proceeding based on Marico's claim was heard earlier, culminating in an award on 6th May 2017. For whatever reasons, the arbitral proceeding based on the claim filed by Sheil did not proceed.

4. The first appellant addressed a communication to the Arbitral Tribunal on 26th November 2019, followed by another communication dated 7th January 2020 requesting the Arbitral Tribunal to dismiss the claim of Sheil on the ground that the company had abandoned the claim. In response, the Arbitral Tribunal fixed a meeting on 11th March 2020. As Sheil did not attend the meeting, the next meeting was fixed on 18th March 2020. The meeting scheduled for 18th March 2020 was not held. Due to the COVID­19 pandemic, the next meeting could be held only on 12th August 2020, when the Arbitral Tribunal directed the first appellant to file a formal application for dismissal of the claim of Sheil and permitted Sheil to file a reply. Accordingly, on 27th August 2020, the first appellant filed an application invoking the Arbitral Tribunal's power under clause (c) of sub­section (2) of Section 32 of the Arbitration Act. The contention raised by the first appellant in the said application was that Sheil's conduct of not taking any steps for eight years shows that the said company abandoned the arbitral proceedings. Sheil filed an affidavit and specifically contended that no ground was made out to act under Section 32(2)(c) of the Arbitration Act. Sheil also raised other factual contentions and denied the allegation of abandonment.

5. The Arbitral Tribunal passed an order on 1st