Manipur High Court Sets Aside Arbitral Award On Parties' Consent In Thoubal Multipurpose Project Dispute

The Manipur High Court has, recently, with the consent of Progressive Construction Limited and the State of Manipur, set aside an arbitral award relating to the Thoubal Multipurpose Project (Construction of Earth Dam) and ordered a de novo arbitration.

Chief Justice M. Sundar, while disposing of an arbitration petition filed by Progressive appointed former Chief Justice of the Manipur High court Justice D. Krishnakumar as the substitute sole arbitrator to conduct the arbitration proceedings and render an arbitral award.

The court observed, "In view of the facts and circumstances of the case, owing to various aspects of the matter including an issue touching upon compliance qua Section 31(5) of A&C Act both sides have agreed to have this 25.03.2026 Award made by Mr. Th. Joykumar Singh set aside (without expression of any view or opinion on merits) and resort to de-novo arbitration by a sole Arbitrator who has also been agreed upon by both sides by consent."

The dispute arises from an agreement dated December 7, 1989, for the Thoubal Multipurpose Project (Construction of Earth Dam).

Sole arbitrator Th. Joykumar Singh delivered the award on March 25, 2026. The State received the award on March 26, 2026, while Progressive Construction Limited received it on June 2, 2026.

On March 30, 2026, Progressive Construction Limited moved the High court under Sections 11(6), 14 and 15 of the Arbitration and Conciliation Act, 1996, seeking termination of the sole arbitrator's mandate and appointment of a substitute arbitrator.

During the hearing, both sides informed the court that they had agreed to set aside the arbitral award by consent and recommence the arbitration before Justice D. Krishnakumar, former Chief Justice of the Manipur High court. They said the consensus had been reached because the matter involved an issue concerning compliance with Section 31(5) of the Arbitration and Conciliation Act.

Recording the parties' consensus, the court appreciated the fair stand taken by both sides. It clarified that the award was being set aside solely to facilitate a de novo arbitration and without expressing any opinion on the merits.

The court directed Justice D. Krishnakumar to continue the proceedings based on the pleadings already completed before the previous arbitrator and proceed from the stage of framing of issues and admission and denial.

It also terminated the mandate of Th. Joykumar Singh and directed him to hand over the entire arbitral record to the State's counsel, who informed the court that the records would be transmitted to Justice D. Krishnakumar after due intimation to counsel for Progressive Construction Limited.

The court further directed that the arbitrator's fee would be governed by Schedule IV of the Arbitration and Conciliation Act, while the remaining arbitral expenses would be shared equally by Progressive Construction Limited and the State.

The petition was accordingly disposed of without any order as to costs.

For Petitioner (Progressive Construction Limited): Advocates Ch. Momon and P. Mohith Reddy.

For Respondent (State of Manipur & Ors.): Advocate General Lenin Singh Hijam; Senior Advocate Athouba Khaidem assisted by Advocates Phungyo Zingkhai and H. Dimal Kumar.