INTRODUCTION
In Viva Highways Ltd. v. Madhya Pradesh Road Development Corporation Ltd. & Anr., decided on 6 February 2026, the Supreme Court of India, comprising Justice Sanjay Kumar and Justice Alok Aradhe, clarified an important aspect of arbitral jurisprudence concerning Section 29A of the Arbitration and Conciliation Act, 1996 (herein after referred to as “The Act”).
The Court set aside an Interim Order of the Madhya Pradesh High Court which had terminated the mandate of an existing arbitrator and directed appointment of a substitute arbitrator, holding that the High Court had misinterpreted the ratio of an earlier Supreme Court decision in Mohan Lal Fatehpuria v. Bharat Textiles.
The ruling reinforces that termination of mandate under Section 29A does not inevitably compel substitution of the arbitrator and that courts must apply the provision in a contextual and legally sound manner.
BRIEF FACTS
The dispute arose out of ongoing arbitration proceedings between Viva Highways Ltd. and the Madhya Pradesh Road Development Corporation Ltd. During the course of Arbitration, issues emerged concerning the expiration of the Arbitrator’s mandate under Section 29A of the Act, which governs time limits for completion of arbitral proceedings.
An Application seeking extension of the Arbitrator’s mandate was filed. The High Court of Madhya Pradesh, by Interim Order dated 2 December 2025, terminated the mandate of the existing Arbitrator and directed the parties to propose a new name for substitution. In doing so, the High Court relied upon the Supreme Court’s decision in Mohan Lal Fatehpuria v. Bharat Textiles (2025 INSC 1409), interpreting it to mean that once mandate expires, substitution becomes obligatory.
Aggrieved by this interpretation, Viva Highways Ltd. approached the Supreme Court.
ISSUES OF LAW
The central issue before the Court was whether expiration or termination of an arbitrator’s mandate under Section 29A(4) necessarily mandates substitution under Section 29A(6) and whether courts are bound, in every case, to replace the arbitrator.
A related question was the jurisdictional propriety of the High Court entertaining the application for extension, particularly in light of the statutory scheme distinguishing between Sections 11 and 29A of the Arbitration Act.
ANALYSIS OF THE JUDGMENT
The Supreme Court held that the High Court had misconstrued the ratio in Mohan Lal Fatehpuria. The Bench clarified that when the earlier Judgment used the term “obligates” in relation to substitution under Section 29A(6), it did not imply an automatic or mechanical replacement of the arbitrator upon termination of mandate. Rather, substitution is warranted only if the circumstances of the case so demand.
The Court noted that this correct understanding had already been clarified by a Coordinate Bench in C. Velusamy v. K. Indhera (2026 INSC 112), which explained that substitution is not an inevitable consequence but a matter of judicial discretion depending on facts.
Importantly, the Supreme Court emphasised that Section 29A forms part of Chapters V and VI of the Arbitration Act and operates independently of Section 11. Relying on Jagdeep Chowgule v. Sheela Chowgule (2026 INSC 92), the Court held that Section 11 jurisprudence concerning appointment of arbitrators does not automatically govern proceedings under Section 29A.
The Bench also pointed out a jurisdictional error: The Application seeking extension of the Arbitrator’s mandate did not lie before the High Court. The competent forum in the present case was the Commercial Court, Bhopal, which had earlier dealt with the matter.
Accordingly, the Supreme Court quashed the High Court’s Interim Order and revived the proceedings before the Commercial Court, directing it to decide the Application for extension of mandate expeditiously and on its own merits. The Court expressly refrained from expressing any opinion on the substantive merits of the Extension Application.
CONCLUSION
This Judgment provides important clarity in Arbitration Law. By rejecting the notion that expiry of mandate automatically necessitates substitution, the Supreme Court has preserved the flexibility embedded in Section 29A and prevented mechanical disruption of arbitral proceedings.
The decision underscores three key principles. First, judicial precedents must be read contextually, not through isolated phrases detached from factual settings. Second, substitution of an Arbitrator under Section 29A(6) is discretionary, not mandatory. Third, jurisdictional discipline under the Arbitration Act must be respected and applications must be filed before the proper forum.
In an era where commercial arbitration seeks efficiency and minimal judicial interference, the ruling strengthens the legislative intent behind Section 29A by ensuring that courts facilitate timely completion of arbitration without unnecessarily unsettling the arbitral tribunal structure.
By restoring the matter to the appropriate forum and correcting the misinterpretation, the Supreme Court has reaffirmed that judicial intervention in arbitration must be principled, precise and proportionate.
SUSHILA RAM VARMA
Advocate & Chief Consultant
The Indian Lawyer & Allied Services
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