Delhi High Court Clarifies Distinction Between Tribunal Recusal and Section 32 Termination, Appoints Presiding Arbitrator Under Section 11(6)

In a notable ruling pronounced on October 16, 2026, the Delhi High Court in National Highways Authority of India v. M/s IRB Westcoast Tollway Ltd. & Ors. (ARB.P. 241/2026) addressed the legal consequences of a collective tribunal recusal arising from a dispute over arbitral fees. Hon’ble Mr. Justice Sachin Datta held that the simultaneous recusal of all three members of an arbitral tribunal does not amount to a termination of arbitral proceedings under Section 32 of the Arbitration and Conciliation Act, 1996, but constitutes a withdrawal from office under Section 15(1)(a), necessitating the appointment of substitute arbitrators.

Case Background and Procedural History

The underlying dispute stems from a Concession Agreement dated March 25, 2013, executed between the National Highways Authority of India (NHAI) and M/s IRB Westcoast Tollway Ltd. for the four-laning of the Goa/Karnataka Border to Kundapur section of NH-66.

• Initial Constitution: An arbitral tribunal comprising three retired Supreme Court and High Court judges was constituted in October 2024 to adjudicate multiple sets of claims and counterclaims aggregating approximately Rs. 3,515 Crores.
• The Recusal Event: During a hearing on July 16, 2025, due to the voluminous nature of the record (exceeding 138,000 pages), the erstwhile tribunal suggested that its fee be finalized in consultation with the parties. When NHAI insisted that fees be restricted strictly to the Fourth Schedule of the A&C Act, all three members passed Procedural Order No. 6, deciding to recuse themselves from further proceedings.
• Post-Recusal Actions: Both parties subsequently initiated steps to substitute their respective nominee arbitrators. When those nominees failed to reach a consensus on a presiding arbitrator, the respondents themselves filed an application under Section 11(6) (ARB.P. 1862/2025), leading to the appointment of a presiding arbitrator on December 1, 2025. However, that presiding arbitrator subsequently recused in January 2026, prompting NHAI to file the present petition under Section 11(6).
• The Resistance: The respondents resisted the new petition by filing a belated recall application before the defunct tribunal on February 4, 2026. Relying heavily on the Supreme Court’s ruling in Harshbir Singh Pannu v. Jaswinder Singh, they argued that the collective recusal was a termination of proceedings under Section 32(2)(c), meaning a fresh Section 11 petition was barred and the only remedy was a recall application.

Court’s Analysis and Observations

1. Recusal vs. Termination: Section 15 vs. Section 32

The High Court meticulously drew a statutory line between the termination of an arbitrator’s mandate and the termination of arbitral proceedings:

• Distinct Statutory Schemes: The Court observed that an arbitrator’s withdrawal from office for any reason falls squarely under Section 15(1)(a), which operates independently as a self-sufficient event and triggers Section 15(2) for substitution. By contrast, the termination of arbitral proceedings under Section 32 requires a formal order and a specific finding that continuation has become unnecessary or impossible.
• Distinguishing Harshbir Singh Pannu: The Court clarified that the Supreme Court’s ruling in Harshbir Singh Pannu applies strictly to situations where an arbitral tribunal expressly terminates proceedings (such as under Section 38 for non-payment of fees). It does not convert an individual or collective withdrawal (recusal) into a deemed termination of the entire reference.
• No Transmutation of Recusal: The Court noted that an arbitral tribunal is merely an aggregate of individual offices. Simultaneous withdrawals by all three members do not transmute into a Section 32 termination order, nor does the A&C Act provide a mechanism to “recall” a recusal or force a withdrawn arbitrator to resume office.

2. Conduct and Estoppel of the Respondents

The Court emphasized that the respondents’ sudden reliance on Harshbir Singh Pannu to claim termination of proceedings was completely contradicted by their own prior conduct:

• The respondents had previously nominated a fresh substitute arbitrator and actively invoked the jurisdiction of the High Court under Section 11(6) in late 2025 to appoint a presiding arbitrator.
• A party that has successfully invoked Section 11(6) on the footing that the reference subsists cannot subsequently turn around and contend that the reference is terminated.

Decision and Directions

Allowing the petition under Section 11(6) of the A&C Act, the High Court appointed Mr. Justice (Retd.) Rajesh Bindal, former Judge of the Supreme Court of India, as the Presiding Arbitrator.

The newly constituted tribunal comprises:

• Mr. Justice (Retd.) Rajesh Bindal (Presiding Arbitrator)
• Mr. Justice (Retd.) Sakha Ram Singh (Petitioners Nominee Arbitrator)
• Mr. Justice (Retd.) Virendrasingh Gyansingh Bisht (Respondent Nominee Arbitrator)

The Court directed that the arbitral proceedings shall resume from the stage they reached on July 16, 2025, subject to the tribunal’s discretion.

Citation: National Highways Authority of India v. M/s IRB Westcoast Tollway Ltd. & Ors. (2026:DHC:9246)