Arbitration and Conciliation Act, 1996 — Ss. 25, 30, 31A, 32, 38, 14, 15, 11 — Termination of arbitral proceedings — Whether termination under S. 25 or S. 38 is distinct from or traceable to S. 32(2) — Statutory scheme, legislative design, and doctrinal divergence — Explained.

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A. Arbitration and Conciliation Act, 1996 — Ss. 25, 30, 31A, 32, 38, 14, 15, 11 — Termination of arbitral proceedings — Whether termination under S. 25 or S. 38 is distinct from or traceable to S. 32(2) — Statutory scheme, legislative design, and doctrinal divergence — Explained.

The 1996 Act employs the expression “terminate the proceedings” in multiple provisions (Ss. 25(a), 30(2), 32(2), 38(2)). Each provision embodies an independent statutory source of termination. The Act does not create a single, unified termination mechanism under S. 32, but contemplates different situations in which proceedings may be brought to an end. The power, preconditions, and consequences of termination differ in each section. Harmonious construction does not justify collapsing all forms of termination into S. 32(2)(c).

B. S. 25(a) — Default of claimant — Mandatory termination — Nature and consequences — Recall jurisdiction — Distinction from S. 32.

Under S. 25(a), if the claimant fails to file the statement of claim within the time under S. 23(1) without showing sufficient cause, the tribunal shall terminate the proceedings. Termination under S. 25(a) is pre-adjudicatory, arises before commencement of the hearing, and does not per se extinguish the tribunal’s mandate.
By virtue of SREI Infrastructure and Sai Babu, sufficient cause shown even after termination may permit recall, because S. 25 lacks the phrase used in S. 32(3) that “the mandate of the arbitral tribunal shall terminate”. Hence, termination under S. 25(a) does not operate as termination of mandate in the S. 32 sense.

C. S. 25(b), (c) — Respondent’s default or non-appearance — Continuation mandatory — No power to terminate.

Where respondent fails to file the statement of defence (S. 25(b)) or a party fails to appear or produce documents (S. 25(c)), the tribunal must continue with the proceedings. These provisions confer no termination power; they strengthen the legislative intent that tribunal must proceed toward adjudication.

D. S. 30(2) — Settlement by parties — Mandatory termination — Scope.

If parties settle, the tribunal must terminate the proceedings under S. 30(2). Settlement award under S. 30(3)-(4) is treated as a final arbitral award with all statutory consequences.

E. S. 32 — Termination of proceedings — Scheme, scope, and effect — Distinction from other forms of termination.

S. 32(1) contemplates termination either (i) by final award or (ii) by an order under S. 32(2).
S. 32(2)(a)-(c) provides three situations: withdrawal of claim; termination by consent; and situations where continuation becomes “unnecessary or impossible”.
S. 32(3) provides that termination under S. 32(1)-(2) extinguishes the tribunal’s mandate, subject only to Ss. 33 and 34(4). This consequence is unique to termination under S. 32 and does not attach automatically to termination under S. 25 or S. 38.

F. S. 32(2)(c) — “Unnecessary or impossible” — Interpretive parameters — Express and implied abandonment — Limits on tribunal’s discretion.

The words “unnecessary” and “impossible” cannot be interpreted to include defaults already governed by S. 25. They address post-initiation circumstances making continuation futile, redundant, or incapable of completion.
Abandonment under S. 32(2)(c) requires conduct so “clinching and convincing” that it leads to only one conclusion: the claimant has given up the claim (Dani Wooltex). Mere non-appearance, absence of request for fixing hearings, or inertia does not constitute abandonment.
The tribunal must record reasoned satisfaction before invoking S. 32(2)(c); casual exercise defeats the object of the Act.

G. S. 38 — Deposit of costs — Suspension or termination — Nature of power — Whether termination under S. 38 equates to S. 32(2)(c).

Under S. 38(2), failure of parties to deposit fees may lead the tribunal to suspend or terminate proceedings qua claim or counter-claim. This is a textually independent statutory termination.
Unlike S. 32(2)(c), S. 38(2) does not require satisfaction that continuation is unnecessary or impossible. Termination arises directly from statutory non-payment of costs.
Some High Courts (Delhi, Bombay, Telangana) had read S. 38 termination as falling within S. 32(2)(c). The Court rejects the conflation: S. 38 termination does not ipso jure extinguish tribunal’s mandate under S. 32(3) unless the statutory conditions of S. 32(2) are independently met.

H. Fee fixation — S. 31A read with Fourth Schedule — Consent of parties — ONGC v. Afcons Gunanusa — Effect on validity of termination under S. 38.

Tribunal’s fee must be fixed with consent of parties. Unilateral fixation contrary to Fourth Schedule principles cannot constitute a lawful basis for invoking S. 38(2). Where fee determination was defective or contrary to ONGC v. Afcons Gunanusa JV, non-deposit cannot lawfully trigger suspension or termination.

I. Mandate of tribunal — When it terminates — S. 14, S. 32(3) — Distinction among Ss. 25, 30, 32, 38.

Tribunal’s mandate terminates only upon:
(i) final award (S. 32(1)), or
(ii) termination under S. 32(2), or
(iii) circumstances under S. 14 (de jure/de facto inability).
Statutory terminations under S. 25 or S. 38 do not automatically extinguish mandate.
Revival after S. 32(2) termination is not permissible; revival after S. 25(a) is permissible on sufficient cause; revival after S. 38 depends on validity of underlying fee-fixation and statutory compliance.

J. Remedies — Ss. 11, 14, 15 — Maintainability of fresh appointment after S. 38 termination.

Where termination is not under S. 32(2), S. 32(3) consequences do not ensue. Hence, a second petition under S. 11(5)/(6) for appointment of a substitute arbitrator is not automatically maintainable after a S. 38 termination.
If the dispute relates to legal termination of mandate, remedy lies under S. 14(2).
If the dispute relates to substitution of arbitrator upon valid termination of mandate, remedy lies under S. 15(2).
Maintainability depends on the true legal character of the termination order.

K. Legislative history — UNCITRAL Model Law — Purpose of harmonised scheme — Termination structure intentionally decentralised.

Parliament consciously enacted multiple termination points to ensure procedural efficiency while preserving tribunal’s duty to adjudicate. Imported UNCITRAL concepts do not mandate a single termination mechanism.

L. Judicial conflict — Two competing lines — Reconciliation attempted.

One line: all terminations ultimately traceable to S. 32(2)(c) (Datar Switchgear, Neeta Lalitkumar, PCL Suncon).
Other line: S. 25, S. 30, S. 38 operate independently; S. 32(2)(c) applies only when its specific preconditions are met (SREI Infrastructure, Sai Babu, Dani Wooltex).
The Court endorses the latter view: termination regimes are distinct; S. 32(2)(c) is not a residuary provision absorbing all termination scenarios.

M. Duties of arbitral tribunal — Hearings, fixing of meetings, case progression — Non-discretionary.

Tribunal cannot adopt a passive role. Even absent party requests, tribunal must fix hearings, progress the matter, apply S. 25 where necessary, and cannot treat inaction as abandonment unless criteria of S. 32(2)(c) are strictly satisfied.