Section 29A Of The Arbitration And Conciliation Act, 1996: Substituted Arbitrator Must Be Appointed After Expiry Of Mandate, Rules Supreme Court Of India

The Supreme Court’s recent interpretation of Section 29A of the Arbitration and Conciliation Act, 1996, in Mohan Lal Fatehpuria v. M/s. Bharat Textiles & others; 2025 INSC 1409 marks a decisive shift away from the culture of procedural indulgence that has long plagued arbitration in India. By holding that an arbitrator’s mandate automatically terminates upon expiry of the statutory timeline, and that any belated extension must necessarily involve the appointment of a substituted arbitrator, the Court has sent a clear and uncompromising message: arbitration timelines are mandatory, not aspirational.

This judgment is significant not merely for what it decides, but for what it refuses to tolerate- judicial leniency that undermines legislative intent.

Judicial Sympathy v. Legislative Discipline

For years, Indian arbitration has suffered from a paradox. While arbitration is promoted as a faster alternative to litigation, arbitral proceedings routinely mirror the delays of civil courts. Section 29A was introduced precisely to address this problem, embedding strict timelines into the arbitral process and attaching serious consequences to non-compliance.

Yet, despite the clarity of the provision, courts have often treated Section 29A as a flexible procedural guideline rather than a binding mandate. Extensions have been granted casually, sometimes long after the statutory period had expired, and arbitrators have been allowed to continue as if the clock had never run out.

The Supreme Court’s ruling decisively rejects this approach. By affirming that termination of mandate under Section 29A(4) is automatic and self-operating, the Court has curtailed judicial discretion that previously diluted the provision’s effectiveness.

The Myth Of Continuity At Any Cost

A common justification for allowing the same arbitrator to continue after a delay is “efficiency”, the argument that substitution would cause duplication of effort and increased costs. The Court rightly dismantled this reasoning.

Efficiency cannot be achieved by ignoring statutory consequences. Section 29A(6) itself balances efficiency and discipline by requiring the substituted arbitrator to continue proceedings from the stage already reached. The statute thus consciously sacrifices personal continuity of the arbitrator in favour of systemic accountability.

By insisting on substitution where the mandate has lapsed, the Court reinforces an important principle: arbitrators are not indispensable; the process is.

A Wake-Up Call For Arbitration Stakeholders:

Perhaps the most far-reaching aspect of the judgment lies in its implications for arbitral conduct:

• Arbitrators can no longer be passive timekeepers. The responsibility to monitor timelines is not merely administrative; it goes to the root of jurisdiction.
• Parties and counsel can no longer rely on courts to rescue delayed proceedings. Strategic delay now carries a real risk: losing the tribunal altogether.
• Courts must resist equitable instincts where the statute speaks in mandatory terms. Procedural sympathy cannot override legislative command.

In doing so, the Supreme Court has subtly but firmly reasserted the rule of law over convenience.

Strengthening Arbitration By Enforcing Consequences

Critics may argue that strict enforcement of Section 29A could lead to increased litigation and substitution. However, this criticism overlooks the broader systemic benefit. Rules that carry no consequences invite delay. By enforcing termination and substitution, the Court has restored credibility to arbitration timelines.

This approach in the judgment aligns Indian arbitration more closely with international best practices, where tribunals are expected to function within defined temporal boundaries and delay is treated as a failure of process, not an inevitability.

Conclusion

The Supreme Court’s ruling is a long-overdue course correction. By refusing to revive expired mandates and insisting on strict statutory discipline, the Court has reinforced the fundamental promise of arbitration: speed with certainty.

Section 29A was enacted to change behaviour. With this judgment, the Supreme Court has ensured that it finally does. Arbitration in India will now either respect time or pay the price for ignoring it.