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Analysing the retrieved Case Laws
Scanned Judgements…!
Similarly, ["Mohan Lal Fatehpuria VS Bharat Textiles - Supreme Court"] notes: The parties did not apply for extension of period to pass an award. The sole arbitrator, in view of mandate contained in Section 29A(4), became functus officio, implying that without extension, the arbitrator's mandate ends once the time expires.
The failure of the claimant to submit the Statement of Claim and not seeking an extension generally leads to automatic termination of the arbitrator's mandate, unless the parties or court intervene.
["Hiran Valiiyakkil Lal, S/O Heeralal Balaraman VS Vineeth M. V, S/o Viswanathan - Kerala"] states: the mandate of the Arbitrator stands terminated on expiry of 12 months from 01.04.2022, especially when no extension is sought or granted, and the arbitrator does not act further.
When the arbitrator's mandate terminates due to non-submission of the statement or absence of extension, proceedings cannot continue, and a new arbitrator may need to be appointed.
["Shanklesha Construction VS Ashok Mohanraj Chhajed - Bombay"] notes: his mandate automatically terminates, and he shall then be substituted by another arbitrator under Section 14(1).
Importantly, seeking or obtaining an extension is crucial to prevent termination; without it, the arbitrator's authority ceases once the prescribed period lapses.
Analysis and Conclusion:The consensus across the sources indicates that the arbitrator's mandate terminates if the claimant fails to submit the Statement of Claim within the stipulated or extended timeframe and no extension is sought or granted. This termination is automatic under the arbitration law, and proceedings cannot continue unless a new arbitrator is appointed or the parties or court intervene to extend the mandate. Therefore, the failure to submit the claim and not seeking extension results in the termination of the arbitrator's mandate.
References:["Supreme Infrastructure India Ltd. Through Its Authorised Signatory Mr. Brijesh Kumar Mishra VS Natrip Implementation Society (Natis) - Delhi"] ["Bharat Sanchar Nigam Limited VS Chaurasiya Enterprises - Allahabad"] ["Maj Pankaj Rai VS Niit Ltd. - Delhi"] ["Shimizu Corporation India Pvt. Ltd. vs K.S.Suresh, S/o K.S.Shivananjaiah - Karnataka"] ["INDORE DEWAS TOLLWAYS LIMITED VS. NATIONAL HIGHWAYS AUTHORITY OF INDIA - Delhi"] ["Shanklesha Construction VS Ashok Mohanraj Chhajed - Bombay"] ["Mohan Lal Fatehpuria VS Bharat Textiles - Supreme Court"]
In the fast-paced world of commercial disputes, arbitration offers a streamlined path to resolution. But what happens when the process stalls right at the start? Imagine invoking arbitration, appointing an arbitrator, only for the claimant to miss the deadline for filing the statement of claim—and worse, not even requesting an extension. Does the arbitrator's mandate simply expire?
This is a common question in arbitration practice: does the mandate of arbitrator terminates if the claimant failed to submit the statement of claim as well as has also not sought any extension? Generally, yes—the arbitrator's authority lapses under Indian law. This blog post dives into the legal principles, judicial precedents, and practical implications, drawing from the Arbitration and Conciliation Act, 1996 (the Act), and key cases. Note: This is general information, not specific legal advice. Consult a qualified lawyer for your situation.
The arbitrator’s mandate is intrinsically tied to procedural compliance, particularly the timely submission of the statement of claim by the claimant. Section 23 of the Act mandates that the claimant shall communicate their statement of claim within the period agreed by the parties or determined by the arbitral tribunal.
Failure to do so without sufficient cause typically triggers termination of the proceedings under Section 32(a) of the Act, which states that the tribunal shall terminate proceedings if the claimant fails to communicate his statement of claim in accordance with sub-section (1) of section 23. This inaction cascades to the arbitrator's mandate under Section 14, which provides for termination if the arbitrator fails to act without undue delay.JAYESH H. PANDYA VS SUBHTEX INDIA LTD. - 2019 0 Supreme(SC) 959
As highlighted in legal analyses, the arbitrator’s mandate is linked to the timely submission of the statement of claim. Failure to submit the statement of claim without seeking extension generally leads to termination of the arbitrator’s mandate.Dani Wooltex Corporation VS Sheil Properties Pvt. Ltd. - 2024 5 Supreme 17
Section 14 is pivotal: the mandate of an arbitrator shall terminate if he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay.JAYESH H. PANDYA VS SUBHTEX INDIA LTD. - 2019 0 Supreme(SC) 959 The phrase fails to act without undue delay underscores that prolonged inaction, including due to claimant's default, erodes the mandate.
Judicial interpretations reinforce this. In one case, the court observed that the arbitrator’s authority is contingent upon adherence to procedural deadlines, and without the statement of claim, the process cannot proceed.Steel Authority Of India LTD. VS J. C. Budharaja, Government And Mining Contractor - 1999 8 Supreme 319
If the claimant fails to file the statement of claim within the stipulated time and does not seek an extension, the mandate typically terminates automatically. Key consequences include:
A practical illustration: In a reviewed case, the claimant did not file within the period and sought no extension, leading the court to rule the mandate had expired.Dani Wooltex Corporation VS Sheil Properties Pvt. Ltd. - 2024 5 Supreme 17
Indian courts consistently affirm this principle:
However, not all cases are black-and-white. In ANGELIQUE INTERNATIONAL LIMITED vs SSJV PROJECTS PRIVATE LIMITED & ANR_(COMM)-91_2017) , the court noted that where an arbitrator terminates proceedings for non-filing, the aggrieved party may approach for remedy, but only partially if counter-claims exist.
While termination is the general rule, other precedents add layers:
Arbitrator's Duty to Terminate: In N. Rajagopal VS TVS Motor Company Limited, Bangalore - 2021 Supreme(Mad) 3322 , the court criticized the arbitrator for not terminating when the claimant failed to file: The Arbitrator has failed to terminate the proceedings when the appellant/claimant had failed to file the claim statement within the time provided by the Arbitrator. The appeal was allowed, emphasizing mandatory termination.
No Automatic Termination for Arbitrator Delay: Contrasting claimant fault, Vidhyawati Construction Co. Builders and Govt. Contractors VS Allahabad Development Authority - 2020 Supreme(All) 773 clarifies: there is no automatic termination of the mandate of an Arbitrator on the alleged ground of his failure to act without undue delay, and it is the Court which will have to resolve the dispute. This protects arbitrators but not defaulting claimants.
Sufficient Cause Exception: Termination may be averted if the claimant can demonstrate sufficient cause for the delay and seeks extension before the expiry.Dani Wooltex Corporation VS Sheil Properties Pvt. Ltd. - 2024 5 Supreme 17 For instance, in Vistaar Infratech (I) Pvt. Ltd. VS Managing Director, Bharat Heavy Electricals Limited - 2016 Supreme(Raj) 770 , the arbitrator terminated after finding no valid claim statement: the claimant has failed to communicate his statement of claim in accordance with Section 23.
Extension Scenarios: Cases like Exide Industries Limited VS C. G. Enterprise - 2018 Supreme(Cal) 376 discuss extensions under Section 29A, but stress courts cannot arbitrarily stay proceedings. Even if refused, a substituted arbitrator continues.
These sources illustrate that while claimant inaction triggers termination, arbitrators must proactively end stalled proceedings, and courts intervene judiciously.
Exceptions exist, but they are narrow:
In Bharat Sanchar Nigam Limited And Another Vs. Chaurasiya Enterprises And 2 Others - 2024 Supreme(Online)(ALL) 2646 , delays in filing amended claims were contested, but extensions were sought, highlighting proactive steps.
To safeguard proceedings:
In summary, the mandate of an arbitrator generally terminates if the claimant fails to submit the statement of claim within the prescribed period and does not seek any extension. This stems from Sections 14, 23, and 32 of the Act, bolstered by precedents like those in JAYESH H. PANDYA VS SUBHTEX INDIA LTD. - 2019 0 Supreme(SC) 959, Dani Wooltex Corporation VS Sheil Properties Pvt. Ltd. - 2024 5 Supreme 17, Steel Authority Of India LTD. VS J. C. Budharaja, Government And Mining Contractor - 1999 8 Supreme 319, and J. G. Engineers Private LTD. VS Calcutta Improvement Trust - 2002 1 Supreme 353. While exceptions for sufficient cause exist, proactive compliance is key.
Arbitration thrives on efficiency; procedural lapses undermine it. Parties should prioritize timelines to avoid unintended terminations. For tailored advice, engage arbitration specialists.
This post references general legal principles and cases as of available data. Laws evolve—verify current status.
#ArbitrationLaw, #ArbitratorMandate, #LegalGuide
The Claimant was directed to submit its Statement of Claim by 15.12.2016. ... The parties had agreed to extend the mandate of the Arbitral Tribunal by six months, but they had failed to submit the approval duly signed by the respective competent authority till 23rd October, 2017. The parties also failed to submit any letter in regard to the extension of period. ... The Claimant s....
Not only this, BSNL also contested the amendment sought for in the statement of claim which came to be rejected on 15.02.2020 and thereafter on 24.06.2020 another statement of claim came to be filed by the claimant to which on 11.07.2020, 15 days’ time was sought and thereafter, the BSNL and its counsel ... statement came to be filed by the BSNL on 21.12.2019 and on 04.02.2020, a rejoinder affidavit also#....
The parties did not apply for extension of period to pass an award. The sole arbitrator, in view of mandate contained in Section 29A(4) became functus officio. 12. ... The present Petition under Section 29A of the Arbitration and Conciliation Act, 1996, also indicates an absence of sufficient cause for the delay in filing the present Petition for the extension of mandate. ... In any case, on 24.01.2022, the mandate of the sole arbitrator#HL....
The Claimant is directed to file his Statement of Claim before the next date of hearing with an advance copy to the Respondent. Please note that no further extension of time will be granted for filing of Statement of Claim." 45. ... Thereafter, the learned Arbitrator directed the petitioner to file a Statement of Claim before 5th July 2022 and also stated that the right to file claim after the sai....
The learned Arbitrator rightly held that the law did not prescribe the time limit within which the respondent should submit a counter-claim or plead a set off, which was also a part of pleadings and the counter- claim could be introduced subsequently, unless ex facie ... Section 23 (4) does not refer to the termination of the mandate of the Arbitral Tribunal. It merely states that the statement of claim and defen....
Claimant and not with respect to the counter claim. ... Ltd. 2017 SCC OnLine SC 1210, has held that where the Arbitrator terminates the proceedings due to failure of the claimant to file his Statement of Claim, the aggrieved party can approach the Arbitral Tribunal and on sufficient cause been shown, the Arbitral Tribunal can recall the order and recommence ... of substituted Arbitrator and that, the mandate of thi....
On 01.04.2022, the respondents/claimants filed statement of defence to the counter claim. The respondents/claimants sought for amendment of the claim statement and the same was permitted by the Arbitrator by Ext. P3 order dated 25.08.2022 on limited issues. ... P4 statement before the Arbitrator to record that the mandate of the Arbitrator stands terminated on expiry of 12 months from 01.04.2022. ... Santhosh Mathe....
Not only this, BSNL also contested the amendment sought for in the statement of claim which came to be rejected on 15.02.2020 and thereafter on 24.06.2020 another statement of claim came to be filed by the claimant to which on 11.07.2020, 15 days’ time was sought and thereafter, the BSNL and its counsel ... and liberty was sought by the claimant to file another statement of #HL_....
Only because a claimant, after filing his statement of claim, does not move the Arbitral Tribunal to fix a date for the hearing, the failure of the claimant, per se, will not amount to the abandonment of the claim. 22. ... He submitted that suits filed by Marico and Sheil were separate suits, and, therefore, arbitral proceedings were also separate. Marico and Sheil had not sought any relief against each other. ... ....
2017 SCC OnLine SC 1210, has held that where the Arbitrator terminates the proceedings due to failure of the claimant to file his Statement of Claim, the aggrieved party can approach the Arbitral Arbitrator. ... only in part or only with respect to the claim filed by the Claimant and not with respect to the counter claim. ... Certainly, the petitioner cannot, therefore, claim that it i....
The Arbitrator has exceeded his jurisdiction by suo moto treating the two letters addressed by the appellant to the Executive Director of the respondent company as the claim statement. The Arbitrator has failed to terminate the proceedings when the appellant/claimant had failed to file the claim statement within the time provided by the Arbitrator;
The Apex Court held that there is no automatic termination of the mandate of an Arbitrator on the alleged ground of his failure to act without undue delay, and it is the Court which will have to resolve the dispute whether the Arbitrator had failed to act without undue delay. In case the Arbitrator fails to conclude arbitration proceedings within fixed timeline agreed between the parties and the same having not been extended, the mandate of the Arbitrator automatically terminates.
Even if extension of mandate was refused to the arbitrator, the substituted arbitrator would have to continue with the arbitral proceedings, as per the scheme of the said section. In any event, the Court below did not have the power to stay an arbitral proceeding for any reason under Section 29-A of the 2006 Act. Not only did the District Judge exceed his jurisdiction by staying the arbitral proceeding itself, such excess of jurisdiction was all the more glaring since such stay was made subject to the fate of the writ proceedings pending in the Bombay High Court, which had ....
Whatever has been submitted by him neither sets up any case, nor falls within the explanation given in Section 23(1) of the Act and, therefore, he terminated the proceedings. 3. Perusal of order dated 11.09.2015 indicates that the Arbitrator has upheld the objection of the non-applicants that the statement of claim has not been filed by the applicant in accordance with Section 23 of the Act because mere furnishing of a table of bills and copy of work order does not set up claim of the applicant. The sole arbitrator has concluded in the aforesaid order that the claimant has failed t....
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