Karnataka High Court Refuses New Arbitrator After Award, Says Fresh Appointment Would Reopen Proceedings

The Karnataka High Court has recently refused to appoint a substitute arbitrator under Section 11(6) of the Arbitration and Conciliation Act after an award had already been passed and the matter was remanded only for a limited purpose, holding that such reconstitution would effectively reopen concluded arbitral proceedings.

Dismissing a plea filed by SSV Developers and its Managing Partner Vijaykumar Krishnasa Kabadi, Justice Lalitha Kanneganti held that once an award is passed and the case is remanded only for limited cross-examination and defence evidence, a fresh arbitrator cannot be appointed, particularly when the petitioners failed to comply with the District Court's direction to pay arbitral costs

“The power to appoint another Arbitrator ordinarily arises when the mandate of the existing Arbitrator terminates during the course of arbitral proceedings. However, the present case stands on a different footing,” the court observed.

The dispute arose out of an agreement of sale between SSV Developers and Sunder s/o Premraj Jotwani. The firm is engaged in land development and construction. In 2018, the High Court had appointed A.P. Murari as sole arbitrator with the consent of the parties

The petitioners sought the arbitrator's recusal. The application was rejected. A writ petition led to reconsideration, but the arbitrator again declined to step aside and continued with the proceedings.

An arbitral award was passed on February 15, 2020.

SSV Developers and Kabadi challenged the award before the Principal District and Sessions Judge, Dharwad, under Section 34 of the Act. They sought a limited remand to cross-examine one of the witnesses and lead defense evidence. By order dated October 13, 2025, the District Court allowed the request and directed that the arbitral proceedings be conducted subject to payment of costs. The arbitrator was directed to send the award and records back to the Court

After remand, the petitioners failed to comply with the direction to pay arbitral costs. The arbitrator recorded repeated defaults and resubmitted the file to the District Court.

The petitioners then approached the High Court seeking appointment of a new arbitrator. They contended that after remand they had offered Rs.15,000 towards fees, but the arbitrator demanded full fees and terminated the proceedings.

Opposing the plea, Sunder Jotwani, the claimant submitted that the arbitrator had been appointed with consent, that an award had already been passed, and that the remand was confined to a limited evidentiary exercise. Failure to pay costs, he argued, could not justify substitution of the arbitrator.

The High Court agreed.

Appointment of another arbitrator in these circumstances, the court held, would amount to reopening concluded arbitral proceedings and enlarging the scope of remand, which is impermissible in law. A substitute arbitrator cannot be expected to undertake the limited exercise connected with appreciation of evidence and findings recorded by the original arbitrator.

Taking note of the petitioners' conduct, the Court observed that they had first sought recusal, accepted the limited remand at their own instance, and thereafter failed to pay arbitral fees despite the District Court's direction.

“The petitioner having failed to pay the fees as per the order passed by the District Court cannot seek to circumvent the consequences of such default by requesting appointment of another Arbitrator. Exceeding to the request of the petitioner to appoint a new Arbitrator would encourage parties to frustrate arbitral proceedings and seek repeated reconstitution of tribunals which is not permissible and contrary to the very purport of the Arbitration and Conciliation Act,” the Court held

Holding the petition legally unsustainable, the High Court dismissed it while leaving liberty to the parties to avail appropriate remedies in accordance with law.