SRINAGAR: The Jammu Kashmir and Ladakh High Court has terminated the mandate of a sole arbitrator in a dispute over a CPWD contract for the construction of a 120-men barrack, appointed a substitute arbitrator and ruled that Jammu would be the seat of arbitration.
Justice Rajesh Sekhri, while allowing a petition filed by the Union of India, appointed retired J&K Government Commissioner Er Vinod Gupta as the substitute arbitrator in place of Atul Kumar Garg, whose mandate was declared terminated with effect from June 29, 2024.
The court directed the newly appointed arbitrator to proceed in accordance with the Arbitration and Conciliation Act, 1996, and make an award within the period prescribed under the Act. It also directed that the prescribed fee and incidental expenses be shared by the parties.
The judgment was delivered on November 2, 2026, in a petition filed by the Union of India under Sections 14(2), 11(6) and 15(2) of the Arbitration and Conciliation Act, 1996, seeking termination of the existing arbitrator’s mandate and appointment of a substitute.
The dispute arose after M/s Bhagwati Associates was awarded a contract for the construction of a 120-men barrack and an agreement was executed between the parties. Following a dispute over the contract, the firm invoked the arbitration clause contained in Clause 25 of the General Conditions of Contract for Central Public Works Department (CPWD) Works, 2014.
The Additional Director General (Jammu), CPWD, appointed Atul Kumar Garg as the sole arbitrator through an order dated June 9, 2023, to adjudicate the claims. The arbitrator entered upon the reference on June 30, 2023.
The Union of India subsequently approached the arbitrator through an application dated October 17, 2024, communicated on October 18, 2024, contending that his mandate under Section 29A of the Act had expired and that he could not continue the proceedings without an extension of time.
The respondent firm also moved a separate application on November 30, 2024, seeking a decision on the venue of the arbitration proceedings.
Through a procedural order dated December 10, 2024, the arbitrator rejected the Union of India’s application but allowed the firm’s plea, deciding that New Delhi would be the venue and place of arbitration and that the provisions of the Act applicable in New Delhi would govern the proceedings.
In a subsequent order dated December 31, 2024, the arbitrator held that his mandate continued until March 25, 2025. On January 24, 2025, he requested the parties to approach the court for an extension of time beyond that date.
The Union of India challenged these decisions, arguing that the contract had been awarded in Jammu, the work had been executed there, the disputes had arisen there and the request for appointment of the arbitrator had also been made to the competent authority in Jammu. It maintained that the arbitration proceedings commenced in Jammu and that the seat of arbitration could not be shifted to New Delhi.
The petitioner further argued that the arbitration clause in the 2014 GCC expressly provided for proceedings under the Arbitration and Conciliation Act, 1996, including statutory modifications and enactments in force from time to time.
It submitted that the applicable provision of Section 29A(1) required the arbitral award to be made within 12 months from the date the arbitrator entered upon the reference. Since the arbitrator entered upon the reference on June 30, 2023, the statutory period expired on June 29, 2024, and his mandate stood terminated in the absence of an extension.
The respondent firm, M/s Bhagwati Associates, did not file any response to the petition. It was represented by advocate Laksh Puri, while the Union of India was represented by advocate Sumant Sudan, appearing vice Deputy Solicitor General of India Vishal Sharma.
After examining the record, Justice Sekhri noted that the contract was awarded in Jammu, the work was executed there, the respondent raised the dispute and sought appointment of an arbitrator from the competent authority in Jammu, and the arbitrator was also appointed by the Additional Director General (Jammu), CPWD.
The court examined the difference between Section 29A(1) of the Act as applicable to Jammu and Kashmir and the corresponding provision applicable to the rest of the country.
It noted that under the provision applicable to Jammu and Kashmir, an arbitral award was required to be made within 12 months from the date the arbitral tribunal entered upon the reference. In contrast, the corresponding provision applicable to the rest of India prescribed 12 months from the completion of pleadings under Section 23(4).
The court held that the arbitration proceedings were governed by the Act as applicable to the Union Territory of Jammu and Kashmir at the time the proceedings commenced, when the arbitrator received the notice of his appointment in Jammu.
It observed that the arbitrator was required to make the award by June 29, 2024, and that his subsequent order dated December 10, 2024, had been passed after he had become functus officio.
Referring to Sections 14 and 15 of the Act, which deal with the termination of an arbitrator’s mandate and appointment of a substitute, the court held that the failure to make the award within the prescribed period meant that the arbitrator’s mandate had terminated and he was required to be replaced.
On the seat of arbitration, the court concluded that since the Act applicable to Jammu and Kashmir governed the proceedings and the cause of action had accrued in Jammu, the seat of arbitration was to be Jammu.
Allowing the Union government’s petition, the court formally terminated Garg’s mandate with effect from June 29, 2024, and appointed Er Vinod Gupta, retired Commissioner of the J&K Government, as the substitute arbitrator to adjudicate the disputes between the parties. The Registry was directed to forward a copy of the order to the newly appointed arbitrator.
