Section 15: Arbitration and Conciliation Act, 1996
By Nivedita Dhiman
Table of Contents
Introduction
Section 15 deals with termination of mandate and substitution of arbitrator. It ensures that the process of arbitration runs smoothly even if the mandate of the arbitrator is terminated. The mandate of the arbitrator shall terminate where he withdraws from office for any reason.
The section states that where mandate of the arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.
Termination of the mandate of the arbitrator can be made by an agreement between the parties, But in case the mandate of the arbitrator is terminated on any of the grounds, then a substitute arbitrator needs to be appointed according to the rules mentioned.
Section 15 of Arbitration and Conciliation Act
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.
(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 may be 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.
Landmark Judgements
Jayesh N Pandya vs Subhatex India Ltd. 2009
The termination of the mandate of the arbitrator does not result in the termination of the arbitral proceedings because where the mandate of the arbitrator has terminated, a substitute arbitrator can be appointed under subsection (2) of section 15 according to the rules that were applicable to the appointment of the arbitrator being replaced. Termination of the mandate of an arbitrator followed by the appointment of a substitute arbitrator only results in a change in the composition of the arbitral tribunal.
ACC Ltd vs Global Cements Ltd. 2012
In ACC. Ltd vs Global Cements Lid it-was held that the procedure agreed upon by the parties for the appointment of the original arbitrator was equally applicable to the appointment of a substitute arbitrator, even if the agreement does not specifically provide so.
Surender Pal Singh vs HPCL, 2010
When a petition for removal of arbitrator filed under the section 14 is allowed, the court is required to follow the same procedure for appointment of the substitute as adopted at the time of appointment of the arbitrator being replaced. The court, in such a case cannot appoint a retired high court judge as had been prayed by the petitioner. It was held that only if the appointing authority arbitrator as per agreed procedure, sub-section(6) of this section will come into play.
Inland Vikas Ltd vs Central Inland Water Transport Corp Ltd. 2015
When the earlier arbitrator tendered his resignation and the corporation left it to the choice of the court to appoint the substitute arbitrator and the court makes the appointment, the opposite party cannot be allowed to plead the substitute arbitrator must be chosen by the corporation.
Conclusion
Section 15 helps us to understand the framework for the termination of an arbitrator’s mandate whether through mutual agreement or voluntary withdrawal. This section ensures the fairness and consistency of the whole process of arbitration by ensuring that the substitute arbitrator can be appointed in accordance with the same procedures that were applied in the case of original arbitrator. This section supports impartiality and independence by allowing for the replacement of an arbitrator.
There is no provision in the Act, which specifically empowers the appointing authority to recall the mandate of a duly appointed arbitrator. This impasse is not covered by the provisions of section 14 and 15 which envisage events for termination of the mandate of an arbitrator. No provision empowers the court to terminate the mandate of the arbitrator who has entered upon the reference and to substitute the same with an arbitrator which is appointed by the court.
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