Substitution Under Section 29A(6) Is Not Automatic: Supreme Court

Introduction

In Viva Highways Ltd. v. Madhya Pradesh Road Development Corporation Ltd. [SLP (C) No. 38327 of 2025], the Supreme Court intervened at an interim stage to correct a fundamental misapplication of Section 29A of the Arbitration and Conciliation Act, 1996 ("Arbitration Act"/ "the Act").

In this case, the Madhya Pradesh High Court had terminated the mandate of the existing arbitrator and directed parties to propose a new arbitrator. It did so by reading a prior Supreme Court decision in Mohan Lal Fatehpuria vs. Bharat Textiles (2025 INSC 1409) as laying down that substitution is an inevitable consequence once the mandate of an arbitrator stands terminated. The Supreme Court held that this reading was erroneous and that the High Court was not the appropriate forum to decide an application under Section 29A of the Act in the facts of the case.