The Supreme Court has held that once a High Court has exercised its jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996 and appointed an arbitrator, it becomes functus officio and cannot later review or recall that appointment, especially after substantial arbitral proceedings have taken place.
The Bench, speaking through Justice R. Mahadevan, emphasized that the Arbitration Act is a self-contained code premised on minimal judicial intervention, and any attempt to reopen a concluded Section 11 order — particularly years after appointment and during advanced arbitration — is beyond jurisdiction. 2
The Court noted that both parties had actively participated in over seventy sittings, filed pleadings, jointly sought extensions under Section 29A, and incurred substantial expenditure before the respondents belatedly filed review proceedings before the Patna High Court.
Reiterating the limited scope of review, the Court held that “Section 11 exists to facilitate arbitration — not to create multiple stages of judicial reconsideration.” 2
Clause 25 Was a Valid Arbitration Agreement; Party Intent and Conduct Matter
Rejecting the respondents’ contention that the arbitration clause became inoperative due to a unilateral appointment procedure, the Court held that the parties’ conduct — including earlier arbitration under the same clause culminating in an accepted award — conclusively established the existence of a valid arbitration agreement under Section 7(4)(c). 2
The Bench reiterated that questions regarding validity or enforceability of the clause fall squarely within the tribunal’s competence under Section 16, not for a court at the Section 11 stage.
The Court also observed that joint requests for extension under Section 29A amounted to an implicit waiver and triggered estoppel under Section 4 of the Act against later objections to jurisdiction.
Court Directs Continuation of Arbitration Through Substitute Arbitrator
Finding the High Court’s review order unsustainable, the Supreme Court set it aside and restored the arbitration.
To avoid further delay and waste of time and cost already incurred, the Court directed appointment of a substitute arbitrator so that proceedings may continue from the stage already reached, as envisaged under Sections 14–15 and 29A. 2
“Interference at such an advanced stage defeats the legislative intent of speedy and cost-effective dispute resolution,” the Bench cautioned.
The appeal was accordingly allowed.
📌 Case Title: Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd. & Ors.
📌 Citation: 2025 INSC 1365