Mandate Expired, Arbitrator Functus Officio: Supreme Court Orders Substitution After Delay in Arbitral Award

“You Can’t Extend a Dead Mandate”, In a critical ruling on time-bound arbitration, the Supreme Court of India on December 10, 2025, held that once the statutory time period under Section 29A of the Arbitration and Conciliation Act, 1996 expires, the arbitrator’s mandate stands terminated by law, and cannot be revived through mere extension. The Court directed substitution of the arbitrator in a long-pending dispute related to a family-run textile business, setting aside an earlier Delhi High Court order that had extended the arbitrator’s tenure without addressing the termination of mandate.

Delivering the judgment in Mohan Lal Fatehpuria v. M/s Bharat Textiles & Others, a bench comprising Justice Sanjay Kumar and Justice Alok Aradhe held that the sole arbitrator, Mr. Anjum Javed, had become functus officio upon failing to issue an award by the deadline of February 28, 2023, and hence, had to be substituted.

“Timelines Matter in Arbitration”: Mandate Ended When Award Wasn’t Delivered in Time

The dispute arose from a partnership deed signed in 1992, which contained an arbitration clause. After litigation commenced, the Delhi High Court appointed Mr. Anjum Javed as sole arbitrator on March 13, 2020. He entered reference on May 20, 2020, and began issuing procedural directions.

But as the case dragged on—with disputes over administrative expenses and fee demands—the arbitrator failed to deliver the award on time. While the Court noted that the COVID-19 period (March 15, 2020 to February 28, 2022) must be excluded while calculating limitation, it held that even with that benefit, the award should have been passed by February 28, 2023.

“The sole arbitrator failed to do so. The parties did not apply for extension of period to pass an award. The sole arbitrator, in view of mandate contained in Section 29A(4), became functus officio,” held the Court in Para 11.

Section 29A(6) Not Just Permissive – It’s Mandatory When Mandate Ends

The core question before the Court was whether the Delhi High Court had erred in declining to substitute the arbitrator, despite the clear expiry of his mandate under the statute.

Justice Alok Aradhe, writing the opinion, made it emphatically clear:
“When mandate of arbitrator has expired, his continuation is impermissible. Section 29A(6) empowers and obligates the Court to substitute the Arbitrator.” [Para 13]

In doing so, the Court dispelled a common misconception—that unless the arbitrator is found de jure or de facto ineligible under Sections 14 or 15, they cannot be removed. Instead, it held that Section 29A operates independently, and termination of the mandate automatically opens the door to substitution, regardless of previous rulings under other provisions.

“Separate Remedies, Separate Purposes”: Court Rejects Argument Based on Earlier Dismissal Under Sections 14 & 15

The respondents argued that since their earlier petitions to terminate the arbitrator under Sections 14 and 15 had already been dismissed by the High Court (on January 28, 2022), a substitution under Section 29A(6) could not be allowed.

The Supreme Court firmly rejected this:
“The Act provides separate remedies in the circumstances mentioned in Sections 14, 15 and 29A… The substitution of a sole arbitrator is warranted, when his mandate ceases to exist, to effectuate the object of the Act.” [Para 13]

In other words, once the arbitrator fails to deliver the award within time, no other technicalities can shield them from being replaced.

Substitution Means Continuation, Not Repetition: Proceedings to Resume From Where They Left Off

Importantly, the Court clarified that substitution under Section 29A does not require a fresh start. The new arbitrator is expected to continue from the point already reached in the proceedings.

Quoting the statute and reaffirming its purpose, the bench held:
“The arbitral proceeding shall resume from the stage already attained and be concluded within six months from the date of receipt of a copy of this order.” [Para 14]

This ensures that substitution doesn’t delay justice, but instead facilitates it, in line with the Arbitration Act’s pro-arbitration, time-sensitive ethos.

New Arbitrator Appointed: Justice Najmi Waziri (Retd.) Takes Charge

Having found the sole arbitrator’s mandate terminated, the Supreme Court went ahead and appointed a new arbitrator:
“Mr. Justice Najmi Waziri, Former Judge of Delhi High Court is appointed as the substituted sole arbitrator.” [Para 14]

The Court directed that the matter must be concluded within six months, underlining that arbitration cannot be left in limbo due to procedural missteps or passive delays.

No Room for Passive Courts: High Court Criticised for “Error” in Extension Without Substitution

The judgment doesn’t shy away from pointing out the High Court’s oversight.
“The High Court erred in granting an extension when the mandate of the sole arbitrator had ceased to exist,” the Court observed bluntly. [Para 13]

By doing so, the Delhi High Court essentially extended the mandate of a non-existent tribunal, a step the Supreme Court held to be legally unsustainable.

A Strong Push for Time Discipline in Arbitration

With this ruling, the Supreme Court has fortified the principle of finality and time-bound justice in arbitration. Arbitrators who allow timelines to lapse without valid extension do so at the cost of their mandate. Courts, in turn, are duty-bound not to paper over that lapse but to enforce statutory consequences, including substitution.

The ruling is likely to impact ongoing arbitrations where deadlines have passed but parties continue with the same tribunal without formal extension. It also sends a clear message that the speed and sanctity of arbitral timelines are not optional.

Date of Decision: December 10, 2025