Bombay High Court
Tata Motors Passenger Vehicles Limited vs Ghosh Brothers Automobiles on 12 February, 2026
2026:BHC-OS:4121
Neeta Sawant CARAP(L) 26333 of 25 and CARAP(L) 25611 of 2025
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION APPLICATION (L) NO.26333 OF 2025
Tata Motors Passenger Vehicles Ltd. &
Anr. ...Applicants
V/s.
Ghosh Brothers Automobiles & Ors ...Respondents
WITH
COMMERCIAL ARBITRATION APPLICATION (L) NO.25611 OF 2025
Tata Motors Passenger Vehicles Ltd. &
Anr.
...Applicants
V/s.
Ghosh Brothers Automobiles & Ors. ...Respondents
____________________________
Mr. Vaibhav Charalwar with Ms. Tikshta Modi and Ms. Magdhi Pawar
i/b M/s. Akhil Modi & Associates for the Applicants in CARAP(L)
26333/2025.
Ms. Stephanie Pereira with Ms. Tikshta Modi i/b M/s. Akhil Modi &
Associates for the Applicants in CARAP(L) 25611/2025.
Mr. Prashant Chande with Ms. Sejal Shah i/b Daru Shah for
Respondent Nos. 1 to 3 in CARAP(L) 26333/2025.
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Ms. Sejal Shah i/b Daru Shah for Respondent Nos. 1 to 3 in CARAP(L)
25611/2025.
______________
CORAM: SANDEEP V. MARNE, J.
JUDG. RESD. ON: 29 JANUARY 2026
JUDG. PRON. ON: 12 FEBRUARY 2026
Judgment:
1) These Applications are filed by the Applicants under
Section 11 of the Arbitration and Conciliation Act, 1996 (Arbitration
Act) for appointment of arbitrator in terms of Clause 43.2(a) of the
Dealership Agreements dated 26 December 2012 and 9 July 2013 for
adjudication of disputes and differences with the Respondents.
2) The issue involved in both the Applications is common.
However, for the facility of reference, the facts involved in Commercial
Arbitration Application (L) No. 26333 of 2025 are referred throughout
the judgment.
3) Applicant No.1-Tata Motors Passenger Vehicles Ltd.,
which was formerly known as Tata Motors Ltd is engaged in the
business of design, manufacturing, supply and sale of passenger
vehicles and spare parts. Applicant No.2 is also an incorporated entity
and is a successor to Tata Motors Distribution Company Ltd., which was
engaged in the business of sale and distribution of commercial and
passenger vehicles and spare parts manufactured by Applicant No.1.
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4) By Dealership Agreement dated 26 December 2012,
Respondent No.1 was appointed as non-exclusive authorised dealer of
the Applicants for Guwahati and other territories. Respondent Nos.2 to
4 are directors of Respondent No.1, who have personally guaranteed the
payment of outstanding amounts by Respondent No.1 under the
Dealership Agreement. According to the Applicants, Respondents are
liable to pay Rs.20,80,73,491.61/- towards the Applicants in respect of
vehicles and spare parts sold to them by the Applicants. The Demand
Notice dated 22 April 2015 was issued to the Respondents. According to
the Applicants, the Respondents have admitted their liability vide letter
dated 25 June 2015 by confirming sale and delivery of vehicles from
time to time. However, since the outstanding amounts were not paid,
the Applicant’s predecessor issued letter dated 23 February 2016 to
Bombay Chamber of Commerce & Industry (BCCI) intimating that
dispute had arisen between the parties and invoking arbitration clause
43.2(b) of the Dealership Agreement. BCCI intimated to the Respondent
on 5 October 2016 regarding invocation of arbitration. BCCI appointed
Mr. Justice S.D. Pandit (retired) as sole arbitrator to adjudicate the
disputes and differences between the parties. The learned Arbitrator
commenced the arbitral proceedings on 4 July 2018 and continued until
29 April 2020. Mandate of the learned Arbitrator was extended by this
Court by order dated 6 August 2019 by a period of 8 months and the
same was to expire by 6 April 2020. On account of nationwide lockdown
due to COVID-19 pandemic, the learned Arbitrator issued letter to both
the parties on 18 March 2021 for withdrawal from the reference on
account of his ill health.
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5) After withdrawal of the learned Arbitrator from reference,
Applicants issued letter dated 31 March 2021 to BCCI requesting for
substitution of the Arbitrator. According to the Applicants,
appointment was not done by BCCI due to Covid related restrictions.
The Applicants once again approached the BCCI by letter dated 27 June
2023 for substitution of the Arbitral Tribunal. The Respondents issued
reply dated 10 July 2023 contending that the Applicants could not seek
any directions from the BCCI as arbitration mandate had expired.
Parties thereafter exchanged correspondence in relation to substitution
of Arbitrator and Respondents refused to give consent for appointment
of substituted Arbitrator. After waiting for response from the BCCI,
Applicants moved this Court by filing Application under Section 29A of
the Arbitration Act for extension of mandate being Commercial
Arbitration Petition No.10148 of 2025 on 28 March 2025 and
Application under Section 15 read with Section 14(1) of the Arbitration
Act being Commercial Arbitration Petition No.9693 of 2025 on 26
March 2025. By order dated 2 July 2025 , this Court observed that it
would be appropriate to grant liberty to the Applicants to pursue
remedy under Section 11 of the Arbitration Act. Accordingly, the
Applications were disposed of by orders dated 2 July 2025. In pursuance
of the liberty granted by this Court, the Applicants have filed the
present Application for appointment of sole Arbitrator for adjudication
of disputes and differences between the parties arising out of
Dealership Agreement dated 26 December 2012 and 9 July 2013.
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Application by filing their affidavit-in-reply. Since pleadings in the
Application are complete, the same is taken up for hearing and
disposal.
7) Mr. Charalwar, the learned counsel appearing for the
Applicants would submit that the present Application is filed
essentially for substitution of the Arbitrator. That reference to
arbitration between the parties has already been made and even though
the previous Arbitrator has withdrawn, only the Arbitrator’s mandate
has ended under Section 14 of the Arbitration Act and the arbitration
proceedings are not terminated under Section 32 of the Arbitration Act.
In support, he relies on judgment of this Court in Kifayatullah Haji
Gulam Rasool and Ors. vs. Bilkish Ismail Mehsania and Ors. 1 and of
the Apex Court in Dani Wooltex Corporation and others vs. Sheil
Properties Private Limited and Anr 2. That mere termination of
mandate of Arbitrator under Section 14 does not automatically result
into termination of arbitral proceedings under Section 32. That since
reference continues, a substituted arbitrator needs to be appointed for
assisting the arbitral tribunal in taking the arbitral proceedings to
logical conclusion.
8) Mr. Charalwar would further submit that no period of
limitation applies for seeking substitution of arbitrator in a composite
application filed under Section 11 r/w. Sections 14 and 15 of the
1
2000 (4) Mh. L.J. 341
2
(2024) 7 SCC 1
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Arbitration Act. That there is a marked difference between seeking
reference for constitution of Arbitral Tribunal under Section 11(6) of
the Arbitration Act, for which the application may have to be filed
within the prescribed period of limitation from the date of invocation
and mere substitution of Arbitrator in a live reference, for which no
period of limitation would be applicable since arbitral reference
continues.
9) Mr. Charalwar would further submit that on resignation of
the Arbitrator and on termination of his mandate, the arbitral
proceedings continue and only the seat of the Arbitrator becomes
vacant. That when Application under Section 15(2) of the Arbitration
Act is made, the Court is duty-bound to appoint Arbitrator for assisting
continuation and conclusion of the arbitral proceedings. In support, he
relies on judgment of the Apex Court in Shailesh Dhairyawan vs.
Mohan Balkrishna Lulla3. That present application is also in the nature
of continuing the Arbitral Tribunal already constituted. That for each
day that the Arbitral Tribunal lies vacant, cause of action continues.
That therefore period of limitation provided under the Limitation Act,
1963 (Limitation Act) does not apply to an application, which is filed
under Section 11 r/w Sections 14 and 15 of the Arbitration Act. Such
application is merely administrative in nature to which period of
limitation does not apply.
10) Mr. Charalwar would further submit that Section 29A
operates in a different sphere which provides for extension of mandate
3
(2016) 3 SCC 619
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of Arbitrator, who has not rendered the Award in the stipulated period.
That Section 29A of the Arbitration Act is not applicable to a situation
where the Arbitrator has resigned and where arbitral reference
continues.
11) Without prejudice, Mr. Charalwar would submit that in the
event this Court finds that provision of Limitation Act applies even to
Application under Section 11 r/w Sections 14 and 15 of the Arbitration
Act, the delay in filing the application can still be condoned in
accordance with provisions of Section 5 of the Limitation Act. In
support, he relies on judgment of the Apex Court in HPCL Bio-Fuels
Ltd. V/s. Shahaji Bhanudas Bhad 4. He would submit that in the said
judgment, the Apex Court has held that filing of a formal application
for condonation of delay is not necessary. He further submits that even
if cause of action is taken as 31 March 2021, limitation was excluded by
virtue of order passed by the Apex Court in RE: Cognizance for
Extension of Limitation5 and the limitation would start running only
from 1 March 2022. That the previous application under Section 29-A
was filed on 26 March 2022, after disposal of which the present
application is filed with delay of 26 days, which deserves to be
condoned even in absence of formal application for condonation of
delay. Mr. Charalwar prays for appointment of an Arbitrator in the light
of existence of arbitration agreement between the parties.
4
2024 SCC OnLine SC 3190
5
(2022) 1 SCC (L&S) 501
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12) The Application is opposed by Mr. Chande, the learned
counsel appearing for the Respondents. He submits that the same is
grossly time-barred. That the Applicants failed to take any steps after
resignation by the previous learned Arbitrator on 18 March 2021. He
relies on judgment of the Apex Court in M/s Arif Azim Co. Ltd. V/s.
M/s Aptech Ltd.6 in support of his contention that limitation period of
three years is applicable even for filing application under Section 11(6)
of the Arbitration Act. He would submit that the present Application is
filed under Section 11(6) of the Arbitration Act and that the same is not
filed either under Section 14 or under Section 15 of the Arbitration Act.
That even if 31 March 2021 (date of fresh invocation) is taken as cause
of action, the limitation ended on 31 March 2024. That even if benefit
of judgment of the Apex Court in RE: Cognizance for Extension of
Limitation (supra) is extended to the Petitioner, still limitation period
started on 1 March 2022 and ended on 1 March 2025. He relies on
provisions of Section 43 of the Arbitration Act in support of his
contention that provisions of Limitation Act are applicable and that
Article 137 thereof provides for limitation of only three years.
13) Mr. Chande, would further submit that Applicants have
withdrawn Application filed under Sections 14 and 15 of the Arbitration
Act on 9 June 2025 and they cannot contend that the present
Application should also be treated as one filed under Sections 14 and
15. He would further submit that even application filed under Section
29A of the Arbitration Act seeking extension of mandate is withdrawn
by the Applicants. That therefore, Application under Section 11(6) of
6
Arbitration Petition No.29 of 2023 decided on 1 March 2024
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the Arbitration Act filed for appointment of new Arbitrator is clearly
not maintainable. He also relies on order of this Court in Fedbank
Financial Service Ltd. V/s. Narendra H. Shelar 7 in support of his
contention that dismissal of Section 29A Petition results in termination
of mandate of the Arbitral Tribunal. In support of his contention that
mere correspondence does not extend the period of limitation, he relies
on judgment of Delhi High Court in C. P. Kapur vs. The Chairman and
Ors8.
14) Mr. Chande also raises objection about maintainability of
present Application contending that the Applicants are not signatories
to the Dealership Agreement. He submits that Section 11 of the
Arbitration Act can be invoked only by parties to arbitration. He would
accordingly pray for dismissal of the Application.
15) Rival contentions raised on behalf of the parties now fall
for my consideration.
16) It would be necessary to first deal with the objection raised
by Mr. Chande to the maintainability of the present Applications on the
ground that the Applicant No. 1 is not signatory to the arbitration
agreement. The objection is baseless as paras-1, 2 and 3 of the
Application depict the manner in which Tata Motors Passenger
Vehicles Ltd. has amalgamated/merged with Tata Motors Ltd. It would
7
Arbitration Application No.34 of 2020 decided on 24 February 2020
8
CS (OS) 2678/2012 decided on 17 October 2012
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be apposite to extract paras-1 to 3 of the Application for facility of
reference :
1. The Applicant No.1, Tata Motors Passenger Vehicle Limited is a company
formed and registered under Companies Act 2013, having its registered office
at the address mentioned in the cause title. Applicant No.1 is engaged in the
business of design, manufacture, supply and sale of passenger vehicle and
spare parts. The Applicant No.1 has succeeded to the passenger vehicles
business of Tata Motors Ltd. (TML) under a Scheme of Arrangement duly
approved by the Mumbai Bench of Hon’ble National Company Law Tribunal
and is thus entitled to file the present application. Applicant No.1 herein
refers to both the Applicant No.1 as well as its predecessor TML.
2. The Hon’ble National Company Law Tribunal, Mumbai Bench, by order
dated 24 August 2021 passed in C.P.(CAA)/58/MB-IV/2021 connected with
C.A. (CAA)/1142/MB-IV/2020, approved a Scheme of Arrangement between
TML and TML Business Analytics Ltd., whereunder the passenger vehicle
business of TML (PV Business), including among other arbitration
proceedings initiated by TML against the Respondents herein, stood
transferred to and vested in TML Business Analytics Services Ltd. Under the
said Scheme of Arrangement, TML Business Analytics Services Ltd. got the
right to continue legal proceedings initiated by TML, including the
arbitration proceedings, as if the same were instituted by TML Business
Analytics Services Ltd.
3. The name of TML Business Analytics Services Ltd. was changed to Tata
Motors Passenger Vehicles Ltd., Applicant No.2 herein and the Registrar of
Companies, Maharashtra State issued a fresh Certificate of Incorporation
dated 17 September 2022 to that effect. The Applicant craves liberty of this
Hon’ble Court to produce the copy of the relevant Scheme of Arrangement
and Certificate of Incorporation which are publicly available documents, as
and when required.
Therefore, the objection to the maintainability of the Application is
misplaced and liable to be rejected.
17) The disputes and differences between the parties have
arisen out of the Dealership Agreement dated 26 December 2012
executed between the predecessor of Applicant No.1 (TML) and
Respondent No.1, under which dealership for sale of vehicles, spare
parts, accessories as well as after-sales service of passenger vehicles
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manufactured by Applicant No.1 was granted to Respondent No.1.
There is no dispute to the position that the Dealership Agreement
contains arbitration clause No. 43.2 (b) and 43.2 (f) which read thus :
43.2 (b) All disputes or differences whatsoever arising between the parties out
of or relating to the construction, meaning or operation or effect of this
contract/agreement or breach thereof shall be settled by arbitration in
accordance with the Rules of Arbitration and Conciliation of the Bombay
Chamber of Commerce & Industry and the Award made in pursuance thereof
shall be binding on the parties.
43.2 (f) The seat of arbitration shall be in Mumbai.
18) While Respondents do not dispute existence of arbitration
agreement, they have opposed the present applications on the ground
of limitation.
19) Clause 43.2(b) provides for dispute resolution in
accordance with Rules of Arbitration and Conciliation of the BCCI.
According to the Applicants, there are outstanding amounts due from
the Respondents. After the initial correspondence demanding
outstanding amount, the arbitration clause was invoked by notice dated
23 February 2016. Applicants approached BCCI, which was the institute
agreed in the clause. BCCI appointed Mr. Justice S.D. Pandit (Retd) as
the arbitrator. The learned Arbitrator conducted arbitration
proceedings and conducted number of meetings. However, by letter
dated 18 March 2021, the learned Arbitrator withdrew from the
reference. Thus, the mandate of the Arbitrator came to an end under
Section 14 of the Arbitration Act, which provides thus:
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14. Failure or impossibility to act.
(1) The mandate of an arbitrator shall terminate and he shall be substituted
by another arbitrator, if–
(a) he becomes de jure or de facto unable to perform his functions or
for other reasons fails to act without undue delay; and
(b) he withdraws from his office or the parties agree to the termination
of his mandate.
(2) If a controversy remains concerning any of the grounds referred to in
clause (a) of sub-section (1), a party may, unless otherwise agreed by the
parties, apply to the Court to decide on the termination of the mandate.
(3) If, under this section or sub-section (3) of section 13, an arbitrator
withdraws from his office or a party agrees to the termination of the mandate
of an arbitrator, it shall not imply acceptance of the validity of any ground
referred to in this section or sub-section (3) of section 12.
20) Section 15 of the Arbitration Act also provides for two
additional eventualities, under which also the mandate of the arbitrator
terminates. After the mandate of the arbitrator terminates under
Section 14 or 15, the reference still continues and what occurs is a
vacancy in the chair of the arbitrator. That vacancy needs to be filled up
by a substitute arbitrator in accordance with provisions of Section 15(2)
of the Arbitration Act. Section 15 of the Act provides thus:
15. Termination of mandate and substitution of arbitrator.
(1) In addition to the circumstances referred to in section 13 or section 14,
the mandate of an arbitrator shall terminate–
(a) where he withdraws from office for any reason; or
(b) by or pursuant to agreement of the parties.
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(2) Where the mandate of an arbitrator terminates, a substitute arbitrator
shall be appointed according to the rules that were applicable to the
appointment of the arbitrator being replaced.
(3) Unless otherwise agreed by the parties, where an arbitrator is replaced
under sub-section (2), any hearings previously held maybe repeated at the
discretion of the arbitral tribunal.
(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral
tribunal made prior to the replacement of an arbitrator under this section
shall not be invalid solely because there has been a change in the
composition of the arbitral tribunal.
21) However, there is difference between the concepts of
termination of mandate of arbitrator and termination of arbitral
proceedings. Mere termination of mandate of arbitrator does not
automatically result in termination of arbitral proceedings, and in such
an event the reference continues and merely a vacancy occurs in the
chair of the arbitrator, which can be filled up under Section 15(2) of the
Arbitration Act. However, the distinct concept of termination of arbitral
proceedings is dealt with under Section 32 of the Arbitration Act which
provides thus:
32. Termination of proceedings.
(1) The arbitral proceedings shall be terminated by the final arbitral award or
by an order of the arbitral tribunal under sub-section (2).
(2) The arbitral tribunal shall issue an order for the termination of the arbitral
proceedings where–
(a) the claimant withdraws his claim, unless the respondent objects to
the order and the arbitral tribunal recognises a legitimate interest on
his part in obtaining a final settlement of the dispute,
(b) the parties agree on the termination of the proceedings, or
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(c) the arbitral tribunal finds that the continuation of the proceedings
has for any other reason become unnecessary or impossible.
(3) Subject to section 33 and sub-section (4) of section 34, the mandate of the
arbitral tribunal shall terminate with the termination of the arbitral
proceedings.
22) The position that mere termination of mandate of the
arbitrator does not result in automatic termination of arbitral
proceedings is well settled and reference in this regard can be made to
the judgment of the Apex Court in Dani Wooltex Corporation (supra)
in which the Apex Court has held in Paras-12 to 14 as under:
12. The Arbitration Act has two provisions for terminating an
arbitrator’s mandate. Sections 14 and 15 are the relevant
sections. The arbitrator is empowered to withdraw from his
office, which terminates his mandate. However, the arbitral
proceedings continue by the arbitrator’s substitution.
13. The order of termination passed by the learned arbitrator, in this
case, gives an impression that he was of the view that unless parties
move the Arbitral Tribunal with a request to fix a meeting or a date for
the hearing, the Tribunal was under no obligation to fix a meeting or a
date for hearing. The appointment of the Arbitral Tribunal is made
with the object of adjudicating upon the dispute covered by the
arbitration clause in the agreement between the parties. By
agreement, the parties can appoint an arbitrator or Arbitral Tribunal.
Otherwise, the Court can do so under Section 11 of the Arbitration
Act. An arbitrator does not do pro bono work. For him, it is a
professional assignment. A duty is vested in the learned arbitrator or
the Arbitral Tribunal to adjudicate upon the dispute and to make an
award. The object of the Arbitration Act is to provide for an efficient
dispute resolution process. An arbitrator who has accepted his
appointment cannot say that he will not fix a meeting to conduct
arbitral proceedings or a hearing date unless the parties request him
to do so. It is the duty of the Arbitral Tribunal to do so. If the claimant
fails to file his statement of claim in accordance with Section 23, in
view of clause (a) of Section 25, the learned arbitrator is bound to
terminate the proceedings. If the respondent to the proceedings fails
to file a statement of defence in accordance with Section 23, in the
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light of clause (b) of Section 25, the learned arbitrator is bound to
proceed further with the arbitral proceedings. Even if the claimant,
after filing a statement of claim, fails to appear at an oral hearing or
fails to produce documentary evidence, the learned arbitrator is
expected to continue the proceedings as provided in clause (c) of
Section 25. Thus, he can proceed to make an award in such a case.
14. On a conjoint reading of Sections 14 and 15, it is apparent that an
arbitrator always has the option to withdraw for any reason.
Therefore, he can withdraw because of the parties’ non-cooperation in
the proceedings. But in such a case, his mandate will be
terminated, not the arbitral proceedings.
(emphasis supplied)
23) Similarly, this Court in Kifayatullah Haji Gulam Rasool
(supra) has held in paras-11, 12, 16 and 17 as under:
11. Section 14 specifies the grounds for terminating the mandate of an
arbitrator and method of doing so. The grounds for terminating the mandate
are : (i) the arbitrator becomes de jure or de facto unable to perform his
function or (ii) for some other reasons fails to act without undue delay or (iii)
the arbitrator withdraws from his office or (iv) the parties agree to the
termination of his authority as an arbitrator; whereas three methods can be
employed for terminating the mandate of the arbitrator. They are (a) by
withdrawal of the arbitrator from his office (b) by agreement of parties and (c)
by decision by the Court.
12. Section 15 provides for additional grounds for termination of the mandate
and for appointment of substitute arbitrator. The additional grounds
provided are (a) where he withdraws from office for any reason or (b) by or
pursuant to the agreement of the parties. Though sub-section (1) purports to
state additional grounds for termination of authority of an arbitrator but one
of the grounds mentioned therein is covered by the grounds set out in clause
(b) of sub-section (1) of section 14. On the authority of the arbitrator being
terminated, a substitute arbitrator in place of arbitrator whose authority is
terminated has to be appointed and such appointment, as per sub-section (2)
is required to be made by following the same procedure as followed while
appointing the arbitrator who is being substituted.
16. On the above backdrop let us consider the legal provisions providing for
commencement and termination of the arbitration proceedings.
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(a) Section 21 of the Act provides for commencement of the arbitral
proceedings. This section provides that in the absence of an agreement
between the parties to the reference, the arbitral dispute in respect of a
particular dispute shall commence on the date on which a request for that
dispute to be referred to the Arbitration is received by other party. If in the
arbitral agreement parties provide any other mode for commencement of the
arbitral proceedings, the arbitral proceedings will commence in accordance
therewith.
(b) Section 25 incorporates the course of action arbitral Tribunal may
adopt in the event of party committing any of the three defaults mentioned in
this section. The provision of section 25 is intended to enable the arbitral
tribunal not to allow any proceedings to drag on at the instance of one or the
other party. What is contemplated in this section is an order passed by
arbitral Tribunal terminating arbitral proceedings. No such order has been
passed by the arbitral tribunal in this case as such even provision of section
25 is not available to the petitioners. The said provision cannot be invoked
before this Court. However, the petitioners are at liberty to obtain appropriate
orders in this behalf from the arbitral Tribunal but not from this Court.
(c) Section 32 of the Act makes provision for termination of the
arbitral proceedings. Under this section it is provided, that the arbitral
proceedings shall automatically stand terminated when final award is made.
Hence, for automatic termination of the arbitral proceedings, arbitral award
has to be final. Reading of section 32 unequivocally provides that only ‘final
award’ shall terminate the arbitral proceedings. The final award is one which
decides or completes decision of claims presented.
The arbitral proceedings can also be terminated by an order of the
arbitral Tribunal which order can only be passed when claimant withdraws
the claim or when the parties to the reference agree on the termination of the
proceeding, or the arbitral Tribunal finds that continuation of the arbitral
proceeding has become unnecessary or impossible. As per clause (b) of sub-
section (2) of section 32 the parties to the agreement have also been given
liberty to terminate arbitral proceedings but such a request must be made to
the arbitral tribunal by the parties to the proceedings and it must be accepted
by the arbitral Tribunal by an order passed in that behalf. As per sub-section
(3) the mandate of the arbitral tribunal, can also be brought to an end with
termination of arbitral proceedings subject to section 33 and sub-section (4)
of section 34 of the Act.
17. In the above premises, the Act makes specific provision for
commencement and termination of the arbitral proceedings. In the instant
case, none of the events as contemplated under section 32 of the Act have
taken place. No final award has been passed. No joint request depicting
agreement of parties have been made to the arbitral tribunal to terminate
proceedings. No orders have been passed by the Arbitral Tribunal as
contemplated under sub-section (2) of section 32 of the Act. Therefore, it
cannot be said that the arbitral proceeding have come to an end. I, therefore,
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hold that the arbitral proceedings have not come to an end even though the
mandate of the arbitrators have come to an end.
24) Therefore, mere withdrawal by the learned Arbitrator from
the arbitral proceedings vide letter dated 18 March 2021 has not
resulted in termination of arbitral proceedings under Section 32 of the
Arbitration Act. The reference continued notwithstanding the
withdrawal by the learned Arbitrator.
25) As observed above, after the termination of mandate of
arbitrator on withdrawal by the learned Arbitrator from the arbitral
proceedings, it becomes necessary to fill up the vacancy under Section
15 of the Arbitration Act. Under Section 15, the expression used is ‘shall
be appointed’ meaning thereby that either the parties or the Court must
necessarily appoint arbitrator after the termination of mandate of the
previous arbitrator. Section 15 also uses the expression ‘according to the
rules that were applicable to the appointment of arbitrator’. This
essentially would mean that same rules which applied to appointment
of original arbitrator would also apply to the appointment of the
substitute arbitrator. In the present case, parties have agreed to Rules
of Arbitration of BCCI. Therefore it was necessary for the Applicants to
move BCCI for appointment of substitute arbitrator. The Applicants
have twice approached BCCI after withdrawal by the Arbitrator on 31
March 2021 and 27 June 2023. However, BCCI has failed to appoint the
arbitrator. Accordingly, the Applicants have filed application under
Section 29A of Arbitration Act for extension of mandate as well as
separate application under Sections 14 and 15 of the Arbitration Act for
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appointment of substitute arbitrator. However, this Court expressed
vide order dated 2 July 2025 that it would be appropriate that the
Applicants pursue remedy under Section 11 of the Arbitration Act. This
was possibly on account of failure of agreed procedure. The order dated
2 July 2025 reads thus:
1. It is apparent that the last arbitral hearing took place in April 2020 and the
mandate had already expired on April 6, 2020. Even factually, it would mean
that the extension of time line granted by the Supreme Court to
accommodate Covid-19 pandemic had also lapsed. These Petitions have been
filed with an inordinate delay in 2025.
2. Learned Counsel for the Petitioner submits that it was the Bombay
Chamber of Commerce and Industry which was required to substitute the
Arbitrator since the Learned Sole Arbitrator had passed away and she would
attribute the delay to the institution.
3. In these circumstances, rather than dealing with the hopelessly
delayed Petitions under Section 29-A of the Arbitration and
Conciliation Act, 1996 (“the Act”), it would be appropriate to grant
liberty to the Petitioner to pursue the remedy available under Section
11 of the Act.
4. Needless to say, nothing contained herein is an expression of an opinion
on merits of the matter and the delay, if any, in filing the Section 11
Application would be dealt with in accordance with law. The Petitioner may
take up such proceedings as advised instead of pursuing these Petitions under
Section 29-A of the Act. Suffice it to say that the arbitration agreement
between the parties would not come to an end with the expiry of the
Learned Sole Arbitrator – it would subsist.
5. The parties to pursue their rights as available in law and as advised.
6. Both these Petitions stand finally disposed of with liberty as aforesaid.
7. All actions required to be taken pursuant to this order shall be taken upon
receipt of a downloaded copy as available on this Court’s website.
(emphasis supplied)
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26) Thus in Order dated 2 July 2025, this Court has clarified
that the arbitration agreement between the parties has not come to an
end and that the same continues. Accordingly, the Applicants have filed
the present Application under Section 11 of the Arbitration Act.
27) Reliance by Mr. Chande on Order of this Court in Fedbank
(supra) does not assist the case of the Respondents. The case before this
Court involved termination of the mandate of arbitration under Section
29A of the Arbitration Act on account of this Court dismissing the
Petition for extension of mandate. This Court has made an observation
that the Tribunal’s mandate itself was terminated and that therefore
there was no question of reviving and bringing back to life the arbitral
proceedings by appointment of new arbitrator under Section 11. This is
clear from following observations in the Order:
2. The Petitioner invoked arbitration under a Facility or Loan Agreement
dated 21st June 2013. That had an arbitration clause. The Petitioner invoked
arbitration by its letter of 22nd March 2018, a copy of which is at ‘Exhibit C’
to the Petition. By this letter, the Petitioner nominated a sole arbitrator.
3. The learned Sole Arbitrator entered upon the reference to his arbitration
on 4th April 2018.
4. It seems that there was a statement of claim and a statement of defence
and then nothing at all happened.
5. The Respondent then fled an application for closure of the proceedings
saying that they had not been concluded within one year. On this the learned
sole arbitrator made an application that since time had not been extended,
there being no application by the Petitioner under Section 29-A of the
Arbitration and Conciliation Act, the arbitration proceeding was closed with
the mandate terminated. Parties were set at liberty to take appropriate steps
in accordance with law. This order passed by the learned sole arbitrator was
on 18th July 2019.
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6. Ms Bhogale cannot dispute the fact that the Petitioner was late in
fling a Section 29-A Petition. It did file that Petition, Arbitration
Petition No. 1271 of 2019. I dismissed it on 9th January 2020.
7. The situation therefore is that an arbitration previously invoked with a
nomination agreed by the Respondent has now come to an end. The Arbitral
tribunal mandate has been terminated. There is no extension of time.
8. What the Petitioner now seeks is to start the process all over again by
presenting this application under Section 11. This is a second go-around for
the same arbitration.
(emphasis and underlining added)
Thus in Fedbank , the application filed by the applicant therein under
Section 29A of the Arbitration Act was dismissed and thereafter fresh
application was filed under Section 11 for appointment of arbitrator.
The case also did not involve withdrawal by the Arbitrator from the
reference. The mandate of arbitration ended on account of claimant’s
failure to seek extension under Section 29A of the Act. The Order in
Fedbank therefore does not have application to the facts of the present
case.
28) Coming back to the issue of limitation, the Apex Court in
its recent judgment in M/s. Arif Azim Co. Ltd. (supra) has considered
and decided the issue as to whether provisions of Limitation Act are
applicable to an application for appointment of arbitrator under
Section 11(6) of the Arbitration Act. The Apex Court held in paras-45,
46 and 50 as under :
45. The plain reading of Section 11(6) of the Act, 1996, which provides for the
appointment of arbitrators, indicates that no time-limit has been prescribed
for filing an application under the said section. However, Section 43 of the
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hereinbelow:
“43. Limitations.–(1) The Limitation Act, 1963 (36 of 1963), shall
apply to arbitrations as it applies to proceedings in court.
(2) For the purposes of this section and the Limitation Act, 1963 (36 of
1963), an arbitration shall be deemed to have commenced on the date
referred to in section 21.
(3) Where an arbitration agreement to submit future disputes to
arbitration provides that any claim to which the agreement applies
shall be barred unless some step to commence arbitral proceedings is
taken within a time fixed by the agreement, and a dispute arises to
which the agreement applies, the Court, if it is of opinion that in the
circumstances of the case undue hardship would otherwise be caused,
and notwithstanding that the time so fixed has expired, may on such
terms, if any, as the justice of the case may require, extend the time
for such period as it thinks proper.
(4) Where the Court orders that an arbitral award be set aside, the
period between the commencement of the arbitration and the date of
the order of the Court shall be excluded in computing the time
prescribed by the Limitation Act, 1963 (36 of 1963), for the
commencement of the proceedings (including arbitration) with
respect to the dispute so submitted.”
46. Since none of the Articles in the Schedule to the Limitation Act, 1963
provide a time period for filing an application under Section 11(6) of the Act,
1996, it would be covered by Article 137 of the Limitation Act, 1963 which is
the residual provision and reads as under:
Description of Application Period of Time from which period
limitation begins to run
137. Any other application for Three years When the right to apply
which no period of limitation accrues.
is provided elsewhere in this
Division
50. Having traversed the statutory framework and case law, we are of the
clear view that there is no doubt as to the applicability of the Limitation Act,
1963 to arbitration proceedings in general and that of Article 137 of the
Limitation Act, 1963 to a petition under Section 11(6) of the Act, 1996 in
particular. Having held thus, the next question that falls for our
determination is whether the present petition seeking appointment of an
arbitrator is barred by limitation.
29) Thus, the Apex Court has held that the limitation
prescribed under Article 137 of the Limitation Act would apply to a
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petition under Section 11(6) of the Arbitration Act. The Apex Court
thereafter considered the issue as to when the right to apply under
Section 11(6) accrues. The Apex Court has held in paras-56 and 62 as
under :
56. The other way of ascertaining the relevant point in time when the
limitation period for making a Section 11(6) application would begin is by
making use of the Hohfeld’s analysis of jural relations. It is a settled position
of law that the limitation period under Article 137 of the Limitation Act, 1963
will commence only after the right to apply has accrued in favour of the
applicant. As Page 31 of 58 per Hohfeld’s scheme of jural relations, conferring
of a right on one entity must entail the vesting of a corresponding duty in
another. When an application under Section 11(6) of the Act, 1996 is made
before this Court without exhausting the mechanism prescribed under the
said sub-section, including that of invoking arbitration by issuance of a
formal notice to the other party, this Court is not duty bound to appoint an
arbitrator and can reject the application for being premature and non-
compliant with the statutory mandate. However, once the procedure laid
down under Section 11(6) of the Act, 1996 is exhausted by the applicant and
the application passes all other tests of limited judicial scrutiny as have been
evolved by this Court over the years, this Court becomes duty-bound to
appoint an arbitrator and refer the matter to an arbitral tribunal. Thus, the
“right to apply” of the Applicant can be said to have as its jural corelative the
“duty to appoint” of this Court only after all the steps required to be
completed before instituting a Section 11(6) application have been duly
completed. Thus, the limitation period for filing a petition under Section
11(6) of the Act, 1996 can only commence once a valid notice invoking
arbitration has been sent by the applicant to the other party, and there has
been a failure or refusal on part of that other party in complying with the
requirements mentioned in such notice.
62. A perusal of the above shows that the request for appointment of an
arbitrator was first made by the petitioner vide notice dated 24.11.2022 and a
time of one month from the date of receipt of notice was given to the
respondent to comply with the said notice. The notice was delivered to the
respondent on 29.11.2022. Hence, the said period of one month from the date
of receipt came to an end on 28.12.2022. Thus, it is only from this day that
the clock of limitation for filing the present petition would start to tick. The
present petition was filed by the petitioner on 19.04.2023, which is well
within the time period of 3 years provided by Article 137 of the Limitation
Act, 1963. Thus, the present petition under Section 11(6) of the Act, 1996
cannot be said to be barred by limitation.
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30) Thus, the application under Section 11(6) of the
Arbitration Act needs to be filed within a period of 3 years from the date
of delivery of notice invoking arbitration under Section 21 of the Act.
31) Mr. Charalwar has strenuously submitted that the
principle of application of limitation under Article 137 of the Limitation
Act to an application filed under Section 11(6) of the Arbitration Act
cannot be applied in a case where a party files a composite application
under Section 11, 14 and 15 of the Arbitration Act. I am unable to
agree. This is because Section 15 of the Arbitration Act provides that
‘same rules’ as are applicable for appointment of arbitrator would apply
even to an appointment of substitute arbitrator. Therefore, when a
composite application is filed under Section 11, 14 and 15 of the
Arbitration Act, all rigours of Section 11 would apply even for
substitute arbitrator including the period of limitation. It is otherwise
incomprehensible that an application for appointment of substitute
arbitrator can be filed at any point of time without any restriction of
limitation. Since same rules applicable to appointment of earlier
arbitrator also apply for appointment of substitute arbitrator under
Section 15(2), the period of limitation for appointment of arbitrator
under Section 11(6) would equally apply when a composite application
is presented for appointment of substitute arbitrator under Section 11,
14 and 15 of the Arbitration Act.
32) Mr. Charalwar has submitted that since exercise of power
of appointment of substitute arbitrator under Section 15(2) is
essentially to assist carriage of arbitral proceedings, limitation
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applicable under Section 11(6) would not necessarily apply for
appointment of substitute arbitrator. He has relied upon judgment of
the Apex Court in Shailesh Dhairyawan (supra) in which the parties
had named the arbitrator in the contract who refused to act as the
arbitrator. The application for appointment of substitute arbitrator was
resisted on the ground that the contract provided for appointment of
only named arbitrator and that no one else could be appointed as the
sole arbitrator. While deciding the issue, the Apex Court has discussed
the scheme of Section 15(2) of the Arbitration Act and has held in
paras-19 as under:
19. The scheme of Section 8 of the 1940 Act and the scheme of Section 15(2)
of the 1996 Act now needs to be appreciated. Under Section 8(1)(b) read with
Section 8(2) if a situation arises in which an arbitrator refuses to act, any
party may serve the other parties or the arbitrators, as the case may be, with a
written notice to concur in a fresh appointment, and if such appointment is
not made within 15 clear days after service of notice, the Court steps in to
appoint such fresh arbitrator who, by a deeming fiction, is to act as if he has
been appointed by the consent of all parties. This can only be done where the
arbitration agreement does not show that it was intended that the vacancy
caused be not supplied. However, under Section 15(2), where the mandate of
an arbitrator terminates, a substitute arbitrator “shall” be appointed. Had
Section 15(2) ended there, it would be clear that in accordance with the
object sought to be achieved by the Arbitration and Conciliation Act, 1996 in
all cases and for whatever reason the mandate of an arbitrator terminates, a
substitute arbitrator is mandatorily to be appointed. This Court, however, in
the judgments noticed above, has interpreted the latter part of the Section as
including a reference to the arbitration agreement or arbitration clause which
would then be “the rules” applicable to the appointment of the arbitrator
being replaced. It is in this manner that the scheme of the repealed Section 8
is resurrected while construing Section 15(2). The arbitration agreement
between the parties has now to be seen, and it is for this reason that unless it
is clear that an arbitration agreement on the facts of a particular case
excludes either expressly or by necessary implication the substitution of an
arbitrator, whether named or otherwise, such a substitution must take place.
In fact, sub-sections (3) and (4) of Section 15 also throw considerable light on
the correct construction of sub-section (2). Under sub-section (3), when an
arbitrator is replaced, any hearings previously held by the replaced arbitrator
may or may not be repeated at the discretion of the newly appointed
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Tribunal, unless parties have agreed otherwise. Equally, orders or rulings of
the earlier arbitral Tribunal are not to be invalid only because there has been
a change in the composition of the earlier Tribunal, subject, of course, to a
contrary agreement by parties. This also indicates that the object of speedy
resolution of disputes by arbitration would best be sub-served by a substitute
arbitrator continuing at the point at which the earlier arbitrator has left off.
33) The above observations are made by the Apex Court in the
light of the issue of substitution of arbitrator when the clause names an
arbitrator. It is held that though there is statutory mandate for
appointment of substitute arbitrator, since ‘same rules’ apply, one
needs to have regard to the arbitration agreement. To this extent only
the judgment would be relevant to the facts of the present case.
However, for deciding the issue of application of period of limitation for
appointment of substitute arbitrator, the judgment in Shailesh
Dhairyawan (supra) does not assist the case of the Applicants in
support of their contention that no period of limitation can be applied
for deciding composite application under Sections 11, 14 and 15 of the
Arbitration Act. In my view therefore, period of limitation would apply
even for appointment of substitute arbitrator under Section 15(2) of the
Act.
34) Before proceeding further, it must be noted that the
present applications are filed under Section 11 of the Arbitration Act
and these are not composite applications under Sections 11, 14 and 15
of the Act as sought to be contended by the Applicants. The
Applications are filed under Section 11 only, possibly on account of
order passed by this Court on 2 July 2025 when earlier application filed
under Sections 14 and 15 of the Arbitration Act was withdrawn on
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account of expression of opinion by the Court about Section 11 of the
Arbitration Act being the correct remedy. The case involves peculiar
circumstances where adjudication of claim of the Applicants is struck
on twin counts of the previous arbitrator withdrawing from reference
and the institute (BCCI) failing to appoint the substitute arbitrator. It is
not that the Applicants have slept over the matter after withdrawal by
the previous arbitrator. It immediately wrote to BCCI to nominate the
substitute arbitrator. Upon BCCI’s failure to do so, the Applicants filed
applications under Section 29-A and under Sections 14 and 15 of the
Arbitration Act. May be considering the peculiar facts of the case, the
remedy exercised by the Applicants of seeking extension of the
mandate under Section 29-A and for appointment of substitute
arbitrator under Sections 14 and 15 of the Arbitration Act was the right
remedy. However, this Court directed the Applicants to avail the
remedy of Section 11 observing that the arbitration agreement
continues. Applicants have accordingly filed the present Applications
under Section 11 based on invocation vide Notice dated 31 March 2021.
However what the Applicants ultimately seek is appointment of a
substitute arbitrator. Considering these peculiar circumstances of the
case, in my view, technicalities cannot be permitted to prevail by denial
of adjudication of the reference. Considering the peculiar
circumstances of the case, this Court could have even recalled the
Order disposing of Section 29A and Section 14 and 15 Applications and
could have considered and decided the same along with the present
Applications. Ultimately, all efforts of the Applicants are towards
ensuring that the vacancy in the reference is filled up and the arbitral
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proceedings reach to its logical conclusion. Therefore considering the
peculiar facts and circumstances of the case, I am of the view that the
technical hurdles need to be surmounted and it needs to be ensured
that the real objective for which the proceedings are instituted is
ultimately achieved.
35) Now I proceed to examine whether the present
Applications are filed within limitation. The learned Arbitrator
withdrew himself on 18 March 2021 and Applicants wrote to BCCI for
appointment of substitute arbitrator firstly on 31 March 2021. After
writing to BCCI, the Applicants did not pursue the matter further and
filed the successive application only on 27 June 2023. Filing of
application dated 27 June 2023 is inconsequential as the limitation
began running on 31 March 2021. However, on account of COVID
pandemic restrictions, the period of limitation was excluded by the
order of the Apex Court in RE: Cognizance for Extension of Limitation
(supra). The exclusion of limitation ended on 28 February 2022.
Therefore, the maximum period of limitation for filing the present
application expired on 28 February 2025, by which time Applicants
failed to file any proceedings for appointment of substitute arbitrator.
It is only on 26 March 2025, Applicants filed applications under Section
29A of the Arbitration Act and under Sections 14 and 15 of the
Arbitration Act. The Applicants will have to be granted the benefit
under Section 14 of the Limitation Act in respect of the two
applications filed by it under Section 29A and Sections 14 and 15 of the
Arbitration Act, since this Court held the said two applications to be
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incorrect remedies and relegated them to the present remedy under
Section 11 of the Arbitration Act. Therefore, the period from 26 March
2025 till the said two applications were disposed of on 2 July 2025 needs
to be excluded under Section 14 of the Limitation Act. The present
Application has been filed by the Applicants on 21 August 2025. There
is thus delay of about 76 days even after grant of benefit of exclusion on
account of COVID-19 pandemic and benefit of bonafide prosecution of
other proceedings under Section 14 of the Limitation Act. In
Commercial Arbitration Application (L) No. 25611 of 2025, the delay is
of 91 days
36) Mr. Charalwar has urged that the delay caused in filing of
application under Section 11(6) of the Arbitration Act is otherwise
condonable. He has relied upon judgment of the Apex Court in HPCL
Bio-Fuels Ltd (supra) in which the Apex Court had formulated following
questions for determination:
i. Whether the benefit of condonation of delay under Section 5 of the
Limitation Act is available in respect of an application for appointment of
arbitrator under Section 11(6) of the Act, 1996?
ii. Whether it is permissible for the courts to condone delay under Section 5
of the Limitation Act in the absence of any application seeking such
condonation?
iii. Whether the facts of the present case warrant the exercise of discretion in
favour of the respondent to condone the delay in filing the second arbitration
application?
37) The issue about the benefit of condonation of delay under
Section 5 of the Limitation Act has been answered after considering
various judgments in para-121 as under:
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121. The position of law that emerges from the aforesaid discussion is that
the benefit under Section 5 of the Limitation Act is available in respect of the
applications filed for appointment of arbitrator under Section 11(6) of the
Act, 1996. Further, the requirement of filing an application under Section 5 of
the Limitation Act is not a mandatory prerequisite for a court to exercise its
discretion under the said provision and condone the delay in institution of an
application or appeal. Thus, the only question that remains to be considered
is whether in the facts of the present case, the respondent could be said to
have made out a case for condonation of delay in instituting the fresh Section
11(6) application.
38) Thus the Apex Court has ruled in HPCL Bio-Fuels (supra)
that benefit under Section 5 of the Limitation Act is available in respect
of the application filed for appointment of arbitrator under Section
11(6) of the Arbitration Act. The Apex Court has gone a step further and
has held that the requirement of filing application under Section 5 of
the Limitation Act is not a mandatory pre-requisite for a Court to
exercise its discretion under the said provision and condone the delay
in institution of the application. Thus, the delay in filing application
under Section 11(6) can be condoned by the Court, in a given case, even
in absence of a formal application for condonation of delay. In the
present case, the delay is of 76 and 91 days. Considering the peculiar
facts and circumstances of the case where appointment of substitute
arbitrator is necessitated essentially for carriage of the reference and
for its logical conclusion, in my view, delay of 76 and 91 days in filing
the present application deserves to be condoned. The Applicants have
been taking requisite steps for having the disputes adjudicated. The
situation has arisen essentially on account of earlier arbitrator
withdrawing from arbitral proceedings and the Institute (BCCI) failing
to appoint the arbitrator despite repeated requests by the Applicants. It
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is Applicants’ case that the liability to pay the demanded amount is
admitted by the Respondents. It is not necessary to delve deeper into
that aspect at this stage. However, suffice it to observe that an
opportunity needs to be granted to the Applicants to have their
disputes adjudicated on merits. I am therefore inclined to condone the
delay of about 76 and 91 days in filing the present Applications.
39) Mr. Chande has relied upon judgment of learned Single
Judge of Delhi High Court in C.P. Kapur (supra) in support of the
contention that mere correspondence does not extend the period of
limitation. There can be no dispute about this proposition and
correspondence made by the Applicants after 31 March 2021 has not
been taken into consideration for extending the period of limitation.
The judgment therefore has no application to the present case.
40) The Applications accordingly succeed, and I proceed to
pass the following order :
(i) The delay in filing the Applications is condoned.
(ii) Mr. Justice R. Y. Ganoo, former Judge of this Court, is
appointed as the substitute arbitrator in the reference for
adjudication of disputes and differences between the
parties arising out of Dealership Agreements dated 26
December 2012 and 9 July 2013. The contact details of the
Learned Arbitrator are as under:
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Neeta Sawant CARAP(L) 26333 of 25 and CARAP(L) 25611 of 2025Office address: Unit No.2, 2nd Floor, Room No.26, Building
No.32, Raja Bahadur Compound, Ambalal
Doshi Marg,Fort, Mumbai – 400023
Telephone No.: 022-25272204/9920167959
(iii) A copy of this order be communicated to the learned sole
Arbitrator by the Advocate for the Applicants within a
period of one week from the date of uploading of this order.
The Applicants shall provide the contact and
communication particulars of the parties to the Arbitral
Tribunal alongwith a copy of this order.
(iv) The learned sole Arbitrator is requested to forward the
statutory Statement of Disclosure under Section 11(8) read
with Section 12(1) of the Act to the parties within a period
of 2 weeks from receipt of a copy of this order.
(v) The parties shall appear before the learned sole Arbitrator
on such date and at such place as indicated by her, to
obtain appropriate direction with regard to conduct of the
arbitration including fixing a schedule for pleadings,
examination of witnesses, if any, schedule of hearings etc.
(vi) The fees of the learned sole Arbitrator shall be as
prescribed under the Bombay High Court (Fee Payable to
Arbitrators) Rules, 2018 and the arbitral costs and fees of
the Arbitrator shall be borne by the parties in equal portion
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and shall be subject to the final Award that may be passed
by the Tribunal.
37. All rights and contentions of the parties are expressly kept open
to be adjudicated by the Arbitral Tribunal. With the above directions,
the Applications are allowed and disposed of.
[SANDEEP V. MARNE, J.]
NEETA
SHAILESH
SAWANT
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NEETA SHAILESH
SAWANT
Date: 2026.02.12
19:56:07 +0530
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12 FEBRUARY 2025
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