If the arbitrator had been rendered functus officio, there existed no occasion to invoke provisions for appointing a substitute arbitrator: Allahabad High Court

If the arbitrator had been rendered functus officio, there existed no occasion to invoke provisions for appointing a substitute arbitrator: Allahabad High Court

Appointment of Substitute Arbitrator cannot arise when the Arbitrator becomes Functus Officio

Allahabad High Court, in its decision on November 16, held that once the Arbitrator becomes Functus Officio, there exists no occasion to invoke Sections 14 and 15 of the Arbitration Act, 1996 to appoint a Substitute Arbitrator. [PN Garg Engineers v. Chief Engg., Bhopal Zone, Arbitration Application u/s 11(4) – 92 of 2021]

Justice Jayant Banerjee, while dismissing the application, noted,

"Sections 14 and 15 of the Act would only be applicable where the arbitral proceedings are pending. In the present case, under sub-section (1) of Section 32 of the Act, the arbitral proceedings stood terminated by the final arbitral award, and, in view of sub-section (3) of Section 32 of the Act, the mandate of the arbitral tribunal stood terminated with the termination of the arbitral proceedings. Under the circumstances, seeking appointment of a substitute Arbitrator in respect of the dispute between the parties pursuant to the aforesaid order of the Court below dated 16.09.2019, is misconceived."

The applicants and the opposite parties entered into a contract under an Agreement.

Since a dispute arose between the parties, under clause 70 of general conditions of the aforesaid agreement which provided for Arbitration, the competent authority (opposite party no. 2) appointed one Mr. Baljit Singh as the sole Arbitrator, under the terms of Arbitration agreement.

The Arbitration proceedings were finally awarded/disposed on 25.02.2010.

This came in challenge before District Judge, Jhansi by means of an application under Section 34 of the Act of 1996.

By an order dated 16.09.2019, the Court allowed the application, set aside the award and remitted the matter back to the Arbitrator to reconsider all issues raised before the Court in light of the terms of contract as well as the issue regarding extension of period for completion of work of III Phase and pass the award afresh.

The Arbitrator, Mr. Singh resigned and withdrew from the aforesaid arbitration proceedings citing his ineligibility due to retirement.

It was contended by the counsel for applicants that despite repeated reminders to the opposite party, no substitute Arbitrator was appointed.

Hence, the given application was moved.