'No Second Bite At The Cherry': Bombay High Court Refuses Plea For Fresh Arbitrator By Negligent Party

The Bombay High Court has observed that while the expiry of an arbitrator's mandate under Section 29A of the Arbitration and Conciliation Act, 1996 does not automatically terminate arbitral proceedings, a defaulting party cannot be allowed “another bite at the cherry” by seeking appointment of a fresh arbitrator after a court has already refused to extend the mandate due to that party's own negligence.

A single-judge bench of Justice Sandeep V. Marne, while dismissing an application filed by Nalin Vallabhbhai Patel and another against Atharva Realtors and others, held that in the facts of the case, the doors of arbitration stood closed once the Section 29A court had recorded that the claimants had abandoned the proceedings.

The Court emphasised that permitting appointment of a new arbitrator in such circumstances would reward lack of diligence and allow parties to overreach and circumvent prior judicial orders that had consciously refused extension of the mandate.

The bench observed that “appointment of arbitrator after refusal by Court to extend mandate of previous arbitrator under Section 29A would depend on facts of each case and the question as to 'who is at fault' would provide the key for solving the problem. If parties are responsible for delay and Court has refused to extend the mandate on account of conduct of parties, the arbitral proceedings will have to be treated as having been terminated. This is necessary because if the arbitral proceedings are not treated to have been terminated, parties at fault would get another bite at the cherry by seeking appointment of another arbitrator.”

It further added, “When the Court exercising powers under Section 29A of the Arbitration Act has recorded an emphatic finding that 'the Petitioners have abandoned the arbitration proceeding', this Court cannot reward them by providing an opportunity to arbitrate the disputes. The doors of arbitration are closed for them by Section 29A Court. What Applicant is seeking to do in the present case is an attempt to overreach the findings recorded by Court while refusing to extend the mandate under Section 29A of the Arbitration Act. Such an attempt cannot be countenanced in law.”

The dispute arose from a Deed of Assignment of Development Rights dated December 6, 2010, under which the parties were referred to arbitration by the High Court on November 14, 2019 after finding an arbitration clause.

Following substitution of the arbitrator in January 2020 and an interim order dated August 31, 2020, no substantive steps were taken in the proceedings for a prolonged period after settlement discussions failed in April 2022.

Patel and another had moved the Court on April 26, 2024, seeking an extension of the arbitrator's mandate under Section 29A. On October 18, 2024, the Court declined the request, pointing to prolonged inaction and recording that they had effectively abandoned the arbitration. The Supreme Court upheld this finding on February 14, 2025.

Even after this, Patel and the co-applicant issued fresh notices in July 2025 invoking arbitration once again. This was followed by a plea seeking appointment of a new arbitrator on the footing that the dispute continued to subsist.

The realty company and the other respondents resisted the move, arguing that allowing a fresh reference would undermine the earlier finding of abandonment and run contrary to the statutory emphasis on time-bound arbitration.

The court did not adopt a blanket rule. It clarified that refusal to extend an arbitrator's mandate does not, in every case, bring arbitral proceedings to an end. Much turns on the reason for the delay.

Where the delay is attributable to the arbitrator, parties cannot be made to suffer. But where the parties themselves are responsible, the proceedings may justifiably be treated as having come to a close.

Reiterating the distinction between a “faultless party” and a “party at fault”, the Court found that the applicants had been extremely negligent and had abandoned the arbitration proceedings.

In such circumstances, it held that the arbitral proceedings stood terminated and that appointing a fresh arbitrator would amount to reviewing the earlier order refusing extension of the mandate.

Accordingly, the Court dismissed the application

For Applicants (Nalin Vallabhbhai Patel & Anr.): Advocates Rohaan Cama, Manish Gala, Aayush Yadav, Minil Shah, Alpa Gala.

For Respondents (Atharva Realtors & Ors.): Advocates V.M. Chavda, M.V. Chavan, Reva Kulkarni; Kapil Shah, Vatsal Parmar.