* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment reserved on: 25.03.2026 Judgment pronounced on: 06.04.2026 + O.M.P. (T) (COMM.) 121/2025, I.A. 30696/2025 & I.A.

279/2026 HIMANSHU SHEKHAR .....Petitioner Through: Mr. Manish Vashisht, Sr. Adv with Mr. Rajeev Ahuja, Mr. Harshit Ahuja and Mr. Shikhar Bansal, Advs.

versus PRABHAT SHEKHAR .....Respondent Through: Mr. Sandeep Sethi, Sr. Adv.

with Mr. Ravi Prakash, Ms. Nupur Singh, Ms. Riya Kumar, Ms. Shreya Sethi &Mr. Krishna Gembheer, Advs.

CORAM:

HON'BLE MR. JUSTICE AVNEESH JHINGAN

J U D G M E N T

1. The petition is filed under Section 14 read with Section 12(5) of the Arbitration and Conciliation Act, 1996 (for short „the Act‟) for termination of the mandate and substitution of the arbitrator.

2. The relevant facts are that the petitioner and the respondent entered into an understanding on 04.10.2021 for resolving disputes pertaining to reconciliation, scrutiny and settlement of accounts of the parties by arbitration. The name of the sole arbitrator was mutually agreed by the parties. The parties to the lis are brothers engaged in a family jewellery business carried under the name of „Manohar Lal Sarraf and Sons Jewellers Private Limited‟ (for short „MLSSJPL‟). There are three directors in MLSSJPL each holding an equal share of 33.3% each. Two of the directors are party to the lis while third is their brother Sh. Sudhir Singhal. The arbitrator upon entering in reference passed orders dated 04.10.2021 and 08.10.2021 under Section 17 of the Act directing the parties to maintain status quo in respect of all properties pertaining to the arbitral dispute. The petitioner, Sh. Sudhir Singhal and MLSSJPL filed appeals under Section 37 of the Act. The impugned orders dated 08.10.2021 and 14.10.2021 were set aside by this Court with the consent of the parties and respondent in the present appeal sought liberty to file an application for impleadment of the affected parties.

2.1 The petitioner earlier filed a petition under Section 14(2) read with Section 15 of the Act before this Court for termination of the mandate of the sole arbitrator for violation of entry no.9 of Seventh Schedule of the Act. The contention was rejected holding that arbitrator cannot be described as having a close family relation being the co-father-in-law (samdhi) of Sh. Vivek Shekhar, brother of the parties in dispute. The court took note of the statement made by the counsel for Sh. Sudhir Singhal that he would like to join the arbitral proceedings and agree to be signatory to the arbitration agreement provided the arbitrator is substituted. It was observed by the court that Sh. Sudhir Singhal holds 33.3% share in MLSSJPL and that a complete and effective resolution may not be possible without his joining the arbitral proceedings. The SLP against the decision of this Court was dismissed on 21.04.2023.

2.2 On 07.11.2025, the respondent filed an application for impleadment of Sh. Sudhir Singhal, MLSSJPL and Manohar Lal Sarraf & Sons Private Limited. The petitioner on 14.11.2025 sent an email to the arbitrator for filing fresh declaration under Section 12 of the Act in view of the parties sought to be impleaded. On 24.11.2025 petitioner sent the application to the arbitrator attaching the copies of cheque of rupees one crore dated 31.03.2025 issued by the arbitrator in favour of Sh. Sudhir Singhal and bank documents returning the cheque. It was stated that there was financial interest or business relationship between the arbitrator and Sh. Sudhir Singhal and the arbitrator cannot continue under Section 12(5) read with Seventh Schedule of the Act. The arbitrator without filing a declaration under Section 12 of the Act proceeded to decide application for impleadment. The application was dismissed on 11.12.2025. It was held that in view of the dismissal of the impleadment application there was no requirement to file a fresh declaration under Section 12 of the Act and declaration already filed on 04.10.2021 was sufficient.

3. Le