High court replaces reluctant arbitrator

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The High Court of Himachal Pradesh recently substituted a non-performing arbitrator because of his inability to arbitrate on the matter.

In Devki Nandan Steel Works and others v HP State Electricity Board Ltd and others, the high court appointed a retired chief engineer as arbitrator in 2016 with respect to disputes between the parties. However, the appointed arbitrator did not act on his appointment after disclosing that he had already expressed his inability to the to department arbitrate on the matter. However, this fact was never disclosed to the applicant. The department was repeatedly requested by the applicant to take appropriate steps but did not do so, and the applicant was thus compelled to approach the high court to seek the appointment of a substitute arbitrator.

In determining whether a substitute arbitrator must be appointed, the court examined section 14 of the Arbitration and Conciliation Act, 1996, which states that an arbitrator’s mandate must be terminated if he becomes de jure or de facto unable to perform his functions or for another reason fails to act without undue delay. Further, section 15 also provides that once the mandate of the arbitrator has been terminated, a substitute arbitrator can be appointed.

Relying on the above provisions, the court terminated the mandate of the arbitrator and appointed a senior advocate as the substitute arbitrator after obtaining and recording his consent and declaration that he had no objection to the appointment.

The dispute digest is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.