SC Clarified that Section 15(2)(3) and (4) must be read together; substitution of arbitrator preserves continuity and prior proceedings remain valid.

By the Order dated 12.4.2024, the High Court substituted the earlier Arbitrator with the rider that the arbitral proceedings during the period of moratorium could be said to be nullity.

This part of the order was challenged in the Supreme Court.   In that context, the SC held that the High Court assumed and exercised power which not been clearly conferred by the AA particular when the statute itself envisages minimal intervention.

We are of the view that the proper and legal course for the High Court acting under Section 15(2) of the Act, 1996, should have been to appoint a substitute arbitrator to continue from the existing stage of the proceedings. The impugned part of the judgment rendered by the High Court could be said to have resulted in a situation where the arbitration proceedings would have to be restarted de novo and the same would have a direct impact on the sale of flats made pursuant to the Section 17 orders of the Tribunal. This could be both inequitable and inefficient. This Court has time and again said that the object of speedy resolution of disputes by arbitration would best be subserved by a substitute arbitrator continuing at the point at which the earlier arbitrator has left off. [See: Hindustan Construction Co. Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd., 2005 SCC OnLine SC 2578; Shailesh Dhairyawan v. Mohan Balkrishna Lulla, (2016) 3 SCC 619]

Order dated 4.2.2026 of the Supreme Court of India in Civil Appeal No.779 of 2026 of Ankhim Holdings Pvt Ltd  Vs.  Zaveri Construction Pvt Ltd.