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Case

Deepa Galvanising Engg. Industries (P) Ltd. v. Govt. of India (1998)

Say the ratio out loud before you open Reasoning — recalling it unprompted is exactly what the exam pays for.

Why it matters

An arbitrator who simply does nothing is a familiar obstruction. This case shows how s. 14 is used to clear it, and how the appointment power then takes over.

Facts

A named arbitrator did not act for three months despite repeated reminders.

Held

The mandate of the named arbitrator is deemed to have terminated: he failed to act without undue delay within s. 14(1)(a). The court thereupon gets the power to appoint a new arbitrator under s. 11(5).

Reasoning

Step one — the statutory trigger. Section 14(1)(a) terminates the mandate where the arbitrator becomes de jure or de facto unable to perform his functions, or for other reasons fails to act without undue delay.

Step two — measure delay by the reference, not the man. What counts as reasonable dispatch depends on the type of arbitration and the size and complexity of the dispute, judged by reference to the nature of the arbitration and the interests of the parties, not the individual circumstances of the arbitrator. An arbitrator delayed by illness or unexpected absence abroad is open to removal even though personally blameless.

Step three — delay is a distinct default. Fault is not the test: an arbitrator may be incompetent or even guilty of misconduct and yet not be guilty of such delay, and the converse is equally true.

Step four — the vacancy is filled. Once the mandate ends, the appointment machinery operates and a fresh arbitrator is appointed.

Exam use

It opens: How is the mandate of an arbitrator terminated? — with the companion rule that where the parties stipulate by consent that the mandate shall stand terminated if the proceedings are not completed by a fixed date, it terminates automatically on that date, a consent order being an agreement with the seal of the court superimposed.

State the current appointment law accurately. The power to appoint now vests in the Supreme Court or the High Court, or a person or institution designated by that Court, and the Court's enquiry is confined by s. 11(6A) to the existence of an arbitration agreement. The 2019 scheme of designated arbitral institutions is not in force. Note also that the 2015 amendment introduced a time limit for making the award under s. 29A, which now does much of the work delay cases used to do.

It does not decide what period always amounts to undue delay; three months of inaction despite reminders was enough on these facts, and the test remains one of reasonable dispatch in the circumstances of the reference.

Parts of the judgment

Precedents cited