The Delhi High Court has dismissed a plea seeking the substitution of a retired Supreme Court judge as the sole arbitrator in a construction contract-related arbitration proceeding, despite a delay of around 16 months in the pronouncement of the arbitral award.
A single judge Bench comprising Justice Subramonium Prasad held that a short final extension of time to pass the arbitral award was justified since the award was already ready and the proceedings had reached their terminal stage.
"Applying the law laid down by the Apex Court in Rohan Builders (India) Private Limited v. Berger Paints India Limited, 2024 SCC OnLine SC 2494, this Court is inclined to regularize the period of the mandate of the Arbitral Tribunal from 30.09.2025 till today and extend the mandate of the Arbitral Tribunal till 31.01.2026, so that the award can be pronounced," the High Court said.
The petition to replace the arbitrator was filed by a private construction company under Sections 14 and 15(2) of the Arbitration and Conciliation Act, 1996.
The company sought a termination of the arbitrator’s mandate and appointment of a substitute arbitrator.
The Court has, instead, allowed an application filed by the Union of India seeking a limited extension of the arbitrator's mandate to enable delivery of the arbitral award.
The dispute arose out of a 2015–16 contract awarded by the Union of India for the completion of certain works relating to the construction of dwelling units for officers, JCOs and ORs in South Delhi.
Arbitration was invoked in 2019 after disputes arose. Following the death of the initially appointed arbitrator, a retired Supreme Court judge was appointed in December 2021 to continue the proceedings from the stage at which they were left.
By the time of this appointment, pleadings were substantially complete, and the matter was at the stage of final arguments.
The arbitrator eventually heard final arguments and reserved the award in July 2024. However, the award was not pronounced even thereafter, resulting in multiple extensions of the mandate, the last of which expired on September 30, 2025.
The contractor argued that the award had been delayed by around 17 months, and contended that the arbitrator's mandate had come to an end by efflux of time. The contractor, therefore, sought the arbitrator's substitution.
The Union of India opposed such substitution and sought a short extension, pointing out that after expiry of the last mandate, the arbitrator had written to the parties in November 2025, indicating that the arbitral award had been prepared and was ready for pronouncement.
The bank argued that replacing the arbitrator at this stage would result in a third round of adjudication and lead to wastage of time, effort, and costs already incurred.
Agreeing with this submission, the High Court held that the facts of a Supreme Court decision (Mohan Lal Fatehpuria v. M/s Bharat Textiles & Ors) relied upon by the contractor to argue that the arbitrator's mandate was over were distinguishable.
The Court noted that after the present petition was filed, the arbitrator had issued communications stating that the arbitral award had been prepared and was ready for pronouncement.
The Court observed that substantial judicial time and effort had been expended in the matter and that the arbitral process had reached its final stage.
Therefore, it refused to order a substitution of the arbitrator.
“Substitution of the Arbitrator at this juncture would result in avoidable duplication of effort and further delay, contrary to the objective of expeditious dispute resolution under the Arbitration and Conciliation Act, 1996," the Court held.
Relying on the Supreme Court's judgment in Rohan Builders (India) Private Limited v. Berger Paints India Limited, the High Court decided that this was a case where the arbitrator's mandate could be regularised.
The High Court held that the balance of convenience lay in permitting a short extension to enable the pronouncement of the arbitral award rather than unsettling the proceedings by ordering substitution of the Arbitrator at the final stage.