Delhi High Court Refuses To Replace Arbitrator Despite 16-Month Delay, Says Substitution At Final Stage Defeats Expeditious Arbitration

The Delhi High Court rejected an application seeking the substitution a retired Supreme Court Judge as the sole arbitrator, despite a delay of more than 16 months in announcing the arbitral award. The Court found it better suited to grant a short extension to facilitate the finality of the proceedings rather than unsettling them through fresh adjudication. The Bench comprising of Justice Subramonium Prasad, on 16th December, 2025, observed that where arbitral proceedings have concluded and the award is ready for pronouncement, replacing arbitrator would Cause “duplication Of Effort And Further Delay, contrary to the objective of expeditious dispute resolution under the Arbitration and Conciliation Act, 1996”. The dispute arose out of a 2015-2016 construction contract between the Union of India and Inderjit Mehta Constructions Private Limited, to complete the remaining work on defense personnel dwelling units at Kirkee. Arbitration was invoked as a result of disagreements between the parties. In the year 2020, High Court had originally appointed K.B Rai, a former Chief Engineer of the Punjab Public Works Department as the sole arbitrator. Following his death in December 2021, the Court appointed Justice Vikramjit Sen, a former Judge of the Supreme Court of India, as the sole arbitrator to resume the arbitration proceedings. The matter was at the stage of final arguments and majority of the pleadings had been substantially completed at the time of Justice Sen's appointment. Following several extensions of the arbitral mandate, final arguments were heard and the award was reserved on 6th July 2024. However, the award was not pronounced despite a delay of more than one year and three months. M/s Inderjit Mehta Constructions Pvt. Ltd., contended that a delay of almost 17 months after reserving the verdict amounted to failure to act, making the arbitrator functus officio, as numerous extensions had previously been granted. A recent Supreme Court ruling in Mohan Lal Fatehpuria v. Bharat Textiles was cited where substitute was mandated after the statutory period had passed. The Union of India objected to substitution and requested a brief extension of the mandate, noting that the arbitrator had notified the parties via emails dated November 10th and November 15th, 2025, that the award had been written and was prepared for pronouncement. It was contended that substitution at this point would lead to a third adjudication round, squandering money, time, and effort. The Court denying the request for substitution, observed that the current case's facts differed significantly from those of Mohan Lal Fatehpuria. The arbitral process had "reached its terminal stage" and that "substantial judicial time and effort have been expended in the matter", according to Justice Prasad. It noted that instead of jarring the procedures by substituting the arbitrator to be replaced at the final stage, the balance of convenience rests in affording a brief delay to allow for the pronouncement of the award. Citing Supreme Court's ruling in Rohan Builders v. Berger Paints, the Court concluded that mandate termination is not always automatic and can be regularized through judicial action in certain cases. Consequently, the High Court rejected the petition seeking substitution of the arbitrator. It allowed the Union of India's application for one final window of time extension mandate till 31st January 2026, solely to enable pronouncement of the award, making it clear that “no further extensions will be granted”. Case Title: M/s Inderjit Mehta Constructions Pvt Ltd v. Union of IndiaCase No.: O.M.P. (T) (COMM.) 113/2025 & I.A. 30641/2025 Court: High Court of Delhi Coram: Justice Subramonium Prasad Date of Decision: 16 December 2025 Appearances: For Petitioner: Mr Aaditya Vijay Kumar, Ms Akshita Katoch, Mr Vikram Pradeep, Mr Anay Khandelwal, Ms Pratishtha Chauhan and Mr Ashish Dholakia For Respondent: Dr B. Ramaswamy CGSC Click Here To Read/Download Order

Delhi High Court Refuses To Replace Arbitrator Despite 16-Month Delay, Says Substitution At Final Stage Defeats Expeditious Arbitration

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