Telangana High Court
M/S Galore Infotech Pvt. Ltd vs M/S Sew Krishnagar Bahrampore Highways … on 2 April, 2026
Author: K. Lakshman
Bench: K. Lakshman
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT: HYDERABAD
HON'BLE SRI JUSTICE K. LAKSHMAN
ARBITRATION APPLICATION No. 161 OF 2025
Date: 02 -04-2026
Between in ARB APPL .No.161 of 2025:
M/S Galore Infotech Pvt.Ltd ...Applicant
And
M/s SEW Krishnagar Bahrampore
Highways Ltd .....Respondent
This Court passed the following:-
ORDER
Heard Mr. M. Govind Reddy, learned counsel representing
Mr. E. Varun Kumar, learned counsel for the Applicant on the
maintainability of the present application filed under section 14
read with sections 15 and 11 of the Arbitration and Conciliation
Act, 1996 ( for short, ‘the Act, 1996’).
2. The present Arbitration Application arises out of disputes
between the Applicant, M/s. Galore Infratech Private Limited, and
the Respondent, M/s. SEW Krishnagar Bahrampore Highways
Limited, in relation to a work order-cum-agreement dated
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26.09.2012 executed for the supply of aggregates in connection
with a national highway project.
3. The genesis of the dispute traces back to June 2012, when
a group company of the Applicant, namely M/s. Balajee Infratech
& Constructions Pvt. Ltd., received an enquiry from SEW
Infrastructure Limited for participation in the project concerning
the four-laning of the Krishnagar-Baharampore section of NH-34
in the State of West Bengal under the NHDP Phase-III on DBFOT
(Annuity) basis. Pursuant to negotiations, a Letter of Intent (LOI)
dated 13.07.2012 was issued, initially in favour of the said group
company. Subsequently, upon mutual understanding, the work was
transferred to the Applicant company, and a fresh offer was
submitted on 07.09.2012, followed by issuance of a Work Order
dated 26.09.2012 in favour of the Applicant.
4. Under the terms of the Work Order, the Applicant was
obligated to install two crushing plants of 200 TPH capacity and to
supply approximately 11,00,000 metric tons of crushed stone
within a stipulated period of one year. In compliance, the Applicant
mobilized substantial resources, installed the required machinery,
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obtained necessary governmental permissions, and commenced
production from September/October 2012.
5. It is the case of the Applicant that despite fulfilling its
contractual obligations, the Respondent failed to lift the aggregates
produced, resulting in accumulation of stock at the site, disruption
of production, and incurring of additional costs such as re-handling
charges. The Applicant further alleges that the Respondent
defaulted in making timely payments of monthly bills, leading to
substantial outstanding dues. The situation allegedly compelled the
Applicant to demobilize its machinery and discontinue operations,
thereby suffering significant financial losses.
6. Subsequently, disputes arose between the parties
regarding non-payment of dues and damages for breach of
contract. The Applicant quantified its claim at approximately
Rs.12.21 crores towards losses suffered. Legal notices were issued
demanding payment; however, the Respondent failed to comply.
7. Invoking the arbitration clause contained in the Work
Order-cum-Agreement, the Applicant initially nominated a sole
arbitrator. The Respondent, however, disputed the same and
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unilaterally appointed another arbitrator Sri V.V. Raghavan, a
retired District & Sessions Judge was appointed, according to the
terms of the contractual clause vesting such power in its Managing
Director. The Applicant raised objections regarding the
independence and impartiality of the appointed arbitrator under
Section 12 of the Act, 1996. The said arbitrator eventually recused
himself, and thereafter, Respondent has appointed Sri Dasari
Sambaiah, as a substitute Arbitrator.
8. The disputes between the parties were earlier subject
matter of Arbitration Application No.110 of 2016 filed by the
Applicant herein under Section 11(6) of the Act, 1996, wherein the
Applicant sought appointment of an independent Arbitrator. The
said application was dismissed by this Court by order dated
09.06.2020, upholding the appointment made in terms of the
contractual clause and holding that the arbitration was governed by
the pre-Amendment Act, 2015 regime.
9. The said order was carried in Special Leave Petition (C)
No.13500 of 2020 before the Hon’ble Supreme Court, which came
to be dismissed by order dated 15.03.2024, thereby affirming the
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judgment of this Court and rendering the issue final between the
parties.
10. Aggrieved by the unilateral appointment mechanism and
the continuation of arbitral proceedings, the Applicant approached
this Court by filing the present arbitration under Section 14, read
with Sections 15 and 11 of the Act, 1996, seeking appropriate
reliefs including termination of the mandate of the arbitrator and
appointment of an independent arbitrator.
11. The present Arbitration Application, therefore, arises in
the backdrop of the said proceedings, centering around the validity
of the arbitral process, the legality of unilateral appointment of the
arbitrator, and the consequential rights of the parties under the
Arbitration and Conciliation Act, 1996.
12. CONTENTIONS OF THE APPLICANT
i) The Applicant assails the impugned proceedings primarily
on the ground that the arbitral process initiated by the Respondent
is vitiated in law and contrary to the mandate of the Act, 1996.
ii) At the outset, it is contended that the Respondent has
exercised unilateral control over the constitution of the Arbitral
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Tribunal by invoking the contractual clause empowering its
Managing Director to appoint sole arbitrator. According to the
Applicant, such unilateral appointment strikes at the root of the
principles of neutrality, independence, and impartiality of the
arbitral process, which are foundational to arbitration law. The
Applicant submits that once disputes had arisen between the
parties, the Respondent, being an interested party, could not have
retained exclusive authority to appoint the arbitrator.
iii) It is further contended that the initial appointment made
by the Respondent was itself legally unsustainable, and although
the said arbitrator subsequently recused, the Respondent again
proceeded to appoint a substitute arbitrator unilaterally. The
Applicant submits that such successive appointments by one party
demonstrate a continued dominance over the arbitral process and
render the proceedings inherently biased and contrary to Sections
12 and 18 of the Act.
iv) The Applicant also asserts that it had raised specific
objections under Section 12(3) of the Act, 1996 regarding
justifiable doubts as to the independence and impartiality of the
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arbitrator. These objections, according to the Applicant, were not
adequately addressed, thereby necessitating judicial intervention
under Sections 14 and 15 of the Act, for termination of the
arbitrator’s mandate.
v) Another principal contention advanced is that once the
originally appointed arbitrator recused, the Respondent forfeited its
contractual right, if any, to appoint a substitute arbitrator,
particularly in light of the disputes having crystallized and the
Applicant having expressed lack of confidence in such unilateral
mechanism. It is argued that, in such circumstances, the
appointment ought to have been made through the intervention of
the Court under Section 11 of the Act, to ensure fairness and
neutrality.
vi) The Applicant further submits that the Respondent has
acted in breach of the statutory scheme introduced by the Act,
2015, which emphasizes independence and impartiality of
arbitrators and restricts party autonomy where it conflicts with
these principles. The unilateral appointment procedure, it is
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contended, is hit by the ineligibility provisions and the broader
doctrine against bias.
vii) In addition, the Applicant contends that the arbitral
proceedings themselves are liable to be set aside or stayed, as they
are being conducted pursuant to an invalid constitution of the
Tribunal. It is argued that continuation of such proceedings would
cause grave prejudice to the Applicant and defeat the very purpose
of a fair adjudicatory mechanism.
viii) Lastly, the Applicant submits that the Court, while
exercising jurisdiction in the present proceedings, ought to ensure
that the arbitral tribunal is constituted in a manner consistent with
the principles of natural justice, equality of parties, and statutory
safeguards, and accordingly seeks termination of the mandate of
the unilaterally appointed arbitrator and appointment of an
independent arbitrator through the Court.
13.LAW AND ANALYSIS
i) The principal question that arises for consideration in the
present proceedings is whether the application filed under Sections
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14 read with Sections 11 and 15 of the Act, 1996 is maintainable in
the facts and circumstances of the case.
ii) At the outset, it is necessary to advert to the prior
litigation between the parties, which has a direct bearing on the
issue at hand. The Applicant had earlier invoked the jurisdiction of
this Court by filing an Arbitration Application No.110 of 2016
under Section 11(6) of the Act, seeking appointment of an
independent arbitrator in substitution of the arbitrator appointed by
the Respondent in terms of the Work Order-cum-Agreement dated
26.09.2012.
iii) By judgment dated 09.06.2020 in Arbitration
Application No. 110 of 2016, this Court declined to interfere
with the appointment so made and upheld the contractual
mechanism of appointment. This Court, upon a detailed
consideration of the statutory scheme and the law declared by the
Hon’ble Supreme Court, held that the arbitration agreement in
question was governed by the pre-Amendment Act, 2015 regime
and that the arbitral proceedings had commenced prior to the
coming into force of the Amendment Act. It was further held that
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the provisions introduced by the Arbitration and Conciliation
(Amendment) Act, 2015, including Section 12(5), would not apply
retrospectively so as to invalidate the agreed procedure of
appointment.
iv) The said judgment has attained finality. The Special
Leave Petition vide SLP (C) No.13500 of 2020 preferred by the
Applicant came to be dismissed by the Hon’ble Supreme Court by
order dated 15.03.2024, observing that it was not inclined to
interfere with the impugned judgment and order passed by this
Court.
v) Thus, the validity of the unilateral appointment
mechanism contained in the agreement as also the applicability of
the pre-amendment regime, stands conclusively determined inter
partes.
vii) The Applicant, thereafter, invoked the provisions of
Sections 12 and 13 of the Act, seeking recusal of the Arbitrator on
the ground of alleged bias. The said application came to be
rejected, and the statutory scheme, which contemplates
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continuation of the arbitral proceedings subject to challenge under
Section 34, was reiterated.
viii) In the aforesaid backdrop, the present proceedings
under Sections 14, read with Sections 11 and 15 fall for
consideration.
ix) Section 14 of the Act, provides for termination of the
mandate of an arbitrator where he becomes de jure or de facto
unable to perform his functions or fails to act without undue delay.
The scope of the provision is narrow and is confined to situations
where the arbitrator suffers from a legal or factual incapacity which
renders continuation of the mandate impossible. The provision
cannot be invoked as a substitute for challenging the validity of the
appointment itself.
ix) Section 15 of the Act, which deals with substitution of an
arbitrator, is consequential in nature and comes into operation only
upon termination of the mandate under Section 14 or in
circumstances expressly contemplated therein. It does not confer an
independent right to seek reconstitution of the arbitral tribunal.
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x) The contention of the Applicant, though couched in the
language of Sections 14 and 15, is in substance a challenge to the
very appointment of the Arbitrator in terms of the agreement. Such
a challenge, having been raised and negatived in the earlier round
of litigation, cannot be permitted to be re-agitated under the guise
of the present proceedings.
xi) The invocation of Section 11 of the Act, is equally
misconceived. Once an arbitrator has been appointed in accordance
with the agreed procedure and such appointment has been upheld
by this Court, the jurisdiction under Section 11 stands exhausted
and cannot be invoked repeatedly on the same grounds.
xii) In SP Singla Constructions Pvt. Ltd. v. State of
Himachal Pradesh1, the Hon’ble Supreme Court, while dealing
with the applicability of the Arbitration and Conciliation
(Amendment) Act, 2015, held that the amended provisions would
not apply to arbitral proceedings which had commenced prior to
the coming into force of the Amendment Act, unless the parties
otherwise agree. The Court emphasized that the contractual
mechanism of appointment and the legal regime governing such
1
(2019) 2 SCC 488
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proceedings must be tested in accordance with the un-amended Act
where the arbitration had already commenced.
xiii) Similarly, in M/s. Shree Vishnu Constructions v. The
Engineer-in-Chief2, the Hon’ble Supreme Court, following the
decision in BCCI v. Kochi Cricket Pvt. Ltd 3., elaborated upon
Section 26 of the Amendment Act and held that the amendment is
prospective in nature. It was held that while arbitral proceedings
commenced prior to the Amendment Act would continue to be
governed by the un-amended provisions, even court proceedings
“in relation to” such arbitral proceedings must be examined in light
of the stage at which they are initiated, thereby reaffirming the
non-retrospective application of the amended provisions.
xiv) In Central Organization for Railway Electrification
v. ECI-SPIC-SMO-MCML (JV) 4, the Hon’ble Supreme Court,
while considering the issue of unilateral appointment of arbitrators,
reiterated the importance of independence and impartiality in
arbitral appointments. However, the Court recognized that the legal
principles evolved under the amended regime operate prospectively
2
(2023) 8 SCC 329
3
(2018) 6 SCC 287
4
(2025) 4 SCC 641
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and would not unsettle arbitral proceedings commenced prior to the
2015 Amendment. Thus, the decision does not invalidate
appointments made under pre-amendment agreements where the
arbitral process had already been set in motion.
14) To conclude while the post-amendment jurisprudence
has evolved to strengthen the principles of neutrality and
independence, the same cannot be applied retrospectively so as to
invalidate an appointment which has already been upheld and has
attained finality between the parties. The legal position in this
regard is no longer res integra.
15. In the present case, the arbitration agreement is dated
26.09.2012, the arbitral proceedings had commenced prior to the
2015 Amendment; the validity of the appointment mechanism has
already been upheld by this Court in Arbitration Application
No.110 of 2016; the said finding has attained finality upon
dismissal of the Special Leave Petition (SLP) by the Supreme
Court; and the Applicant has already availed the statutory remedy
under Sections 12 and 13 of the Act.
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16. No material has been placed on record to demonstrate
that the arbitrator has become de jure or de facto unable to perform
his functions or has failed to act without undue delay so as to
attract Section 14 of the Act.
17. In such circumstances, the present proceedings, in
substance, constitute an attempt to reopen and re-agitate an issue
which stands concluded between the parties and to indirectly
challenge the constitution of the arbitral tribunal. Such an exercise
is clearly impermissible, both on the principles of finality of
judicial determinations and under the statutory scheme of the Act,
which mandates minimal judicial interference in arbitral
proceedings.
18. Accordingly, this Court holds that the application filed
under Section 14 read with Sections 15 and 11 of the Act, 1996 is
not maintainable in law. The arbitral proceedings shall, therefore,
continue in accordance with law, leaving it open to the Applicant
including bias and raise all the grounds and contentions which it
has raised in the present Application in all the consequential
proceedings.
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19. In the light of the aforesaid discussion, this Arbitration
Application dismissed as not maintainable. No order as to costs.
As a sequel thereto, miscellaneous petitions, if any, pending
in this arbitration application shall stand closed.
_________________________
JUSTICE K. LAKSHMAN
Date: 02 .04.2026
Vvr.
