Bombay High Court Appoints New Arbitrator After Delay in Award

Get the full picture - access the original judgement of the court order here

Case Name

Flemingo Dutyfree Shop Private Limited v. Airports Authority of India (High Court of Bombay at Goa)

Application for Appointment of Arbitrator No. 2 of 2025

Date: 1st April 2025

Key Takeaways

• Mandate Expiry: The original arbitrator’s mandate ended automatically because the arbitration award was not delivered within the statutory time limit set by Section 29A(1) of the Arbitration and Conciliation Act, 1996.
• Fresh Appointment: The court, under Section 11, appointed a new sole arbitrator with the consent of both parties, ensuring the arbitration process continues smoothly.
• Equal Costs: Both parties will equally share the arbitrator’s fees and costs, as per the 4th Schedule of the Arbitration and Conciliation Act and the Bombay High Court (Fee payable to Arbitrators) Rules, 2018.
• Seat of Arbitration: The seat is fixed at Panaji, Goa, with the venue to be decided by the arbitrator.
• Procedural Clarity: The order provides clear steps for communication, disclosure, and the next procedural meeting with the new arbitrator.

Issue

Was the appointment of a new sole arbitrator necessary after the original arbitrator’s mandate expired due to delay, and if so, who should be appointed to continue the arbitration proceedings?

Facts

• Parties:
• Applicant: Fleming Dutyfree Shop Private Limited
• Respondent: Airports Authority of India
• Background:
• The parties entered into a Concession Agreement on 14 March 2016.
• A dispute arose, and arbitration was invoked as per Article 22.2 of the Agreement.
• Mr. Alok Kumar Misra (Retd. CMD, Bank of India) was appointed as the sole arbitrator by mutual consent on 9 February 2021.
• Problem:
• The arbitrator was required to deliver the award by 9 February 2023, as per Section 29A(1) of the Arbitration and Conciliation Act, 1996.
• The award was not delivered in time, so the arbitrator’s mandate automatically terminated by law, but the arbitration proceedings themselves continued to exist.
• Next Steps:
• The applicant requested the respondent to appoint a new arbitrator, but received no response.
• The applicant then approached the High Court for appointment of a new arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.

Arguments

• Applicant’s Arguments:
• Sought appointment of a new sole arbitrator under Sections 11, 14(1)(a), and 15(2) of the Arbitration and Conciliation Act, 1996, due to the expiry of the previous arbitrator’s mandate.
• Noted that the respondent did not respond to the request for a new appointment.
• Respondent’s Arguments:
• Through counsel, stated they had no objection to the appointment of a new sole arbitrator.
• Both parties agreed to appoint Senior Advocate Shri Subodh Kantak as the new arbitrator, and confirmed his consent to act in this role.

Key Legal Precedents & Statutory References

• Section 11 of the Arbitration and Conciliation Act, 1996:
• Deals with the appointment of arbitrators by the court when parties fail to do so.
• Section 14(1)(a) of the Arbitration and Conciliation Act, 1996:
• Provides for the termination of an arbitrator’s mandate if they become de jure or de facto unable to perform their functions.
• Section 15(2) of the Arbitration and Conciliation Act, 1996:
• Allows for the appointment of a substitute arbitrator when the original arbitrator’s mandate terminates.
• Section 29A(1) and 29A(3) of the Arbitration and Conciliation Act, 1996:
• Sets the time limit for making an arbitral award and the consequences of not doing so.
• 4th Schedule of the Arbitration and Conciliation Act, 1996 & Bombay High Court (Fee payable to Arbitrators) Rules, 2018:
• Prescribes the fees payable to arbitrators.

Judgement

• Decision:
• The court appointed Senior Advocate Shri Subodh Kantak as the new sole arbitrator to continue the arbitration from where it left off.
• Both parties must provide their contact details to the arbitrator within a week.
• The arbitrator’s fees will be as per the statutory schedule and shared equally by both parties, subject to the final award.
• The seat of arbitration is Panaji, Goa; the venue will be decided by the arbitrator.
• The application was disposed of with no order as to costs.

FAQs

Q1: Why was a new arbitrator needed?

A: The original arbitrator’s mandate expired because he did not deliver the award within the statutory time limit set by Section 29A(1) of the Arbitration and Conciliation Act, 1996.

Q2: Who is the new arbitrator?

A: Senior Advocate Shri Subodh Kantak from Panaji, Goa, was appointed as the new sole arbitrator with the consent of both parties.

Q3: What happens next in the arbitration?

A: The parties will appear before the new arbitrator, who will set the schedule and give further directions for the proceedings.

Q4: Who pays the arbitrator’s fees?

A: Both parties will share the arbitrator’s fees and costs equally, as per the 4th Schedule of the Arbitration and Conciliation Act and the Bombay High Court Rules, subject to the final award.

Q5: Where will the arbitration take place?

A: The seat of arbitration is Panaji, Goa, but the actual venue will be decided by the arbitrator.

Q6: What legal provisions were applied?

A: The court relied on Sections 11, 14(1)(a), 15(2), and 29A of the Arbitration and Conciliation Act, 1996, and the relevant fee rules.