The respondent had sought termination of the proceedings on the ground that multiple circumstances had rendered continuation of the arbitration impracticable. The Resolution Professional, appearing for the claimant, opposed the application, contending that the requirements of Section 32(2)(c) were not attracted. After hearing both sides and considering the written submissions, the Tribunal proceeded to decide the application.

The Tribunal noted that pleadings had been completed on 17 February 2025 and the matter had been fixed for recording evidence. However, before the proceedings could progress further, the claimant's nominee arbitrator resigned following a challenge to his independence and impartiality. Although attempts were subsequently made to appoint substitute arbitrators, neither entered upon the reference, leaving the Tribunal incompletely constituted for the remainder of the proceedings.

The Tribunal further observed that the arbitral proceedings remained stalled due to the subsisting interim stay granted by the NCLT, Odisha Bench. It also noted that the statutory timeline prescribed under Section 29A of the Arbitration and Conciliation Act had expired, and no written extension of the Tribunal's mandate had been granted by the parties. Even if such an extension had been obtained, the Tribunal observed that it would have served little purpose since the proceedings had not progressed beyond the stage of pleadings.

Considering the cumulative effect of these circumstances, the Tribunal held that the failure to appoint a substitute co-arbitrator, the continuing restraint arising from the NCLT proceedings, and the expiry of the statutory timeline for completion of the arbitration together made continuation of the proceedings "for all practical purposes, unnecessary and impossible," thereby attracting Section 32(2)(c) of the Act.

While the respondent had also relied upon non-payment of arbitral fees and other grounds in support of the application, the Tribunal declined to examine those issues separately, holding that the principal grounds were by themselves sufficient to warrant termination of the proceedings. Accordingly, it allowed the application and terminated the arbitral proceedings.

“Petronet LNG Limited was represented by UNUC Legal LLP, led by Advocate Rishab Khare.”