Consent to Sole Arbitrator Waives Objection; S.29A Court: SC

Consent to Sole Arbitrator Waives Three-Member Panel Objection; Only Section 2(1)(e) Court Extends Mandate: Supreme Court

Published: 28 October 2026 · NyayVidhan

The Supreme Court dismissed South Bihar Power Distribution Company's appeals against a Patna High Court ruling. Having twice consented to a sole arbitrator and taken part in the arbitration, the distribution licensee had waived the agreement's three-member panel and acquiesced. The IBC moratorium does not stop a corporate debtor's own arbitral claim. The High Court's view that it could extend the mandate under Section 29A was set aside, without changing the outcome (paras 25, 29, 43-44, 47).

Key holdings

Appointment orders made on consent and never challenged attain finality and bind the parties (para 22).

Filing counter claims and consenting to an extension before a sole arbitrator is acquiescence; an objection to the tribunal's composition raised only when a further extension is sought comes too late (para 25).

The Section 14 IBC moratorium shields the corporate debtor from recovery action; it does not impair the corporate debtor's own arbitral claim (para 29).

Section 11 jurisdiction ends once the tribunal is constituted; extension under Section 29A goes to the principal civil court or a High Court with ordinary original civil jurisdiction (paras 34, 39).

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Brief Facts

A 2013 tripartite Distribution Franchisee Agreement between the appellant, India Power Corporation Ltd. and its special purpose vehicle provided for arbitration by three arbitrators (paras 5.1, 14.1). On the respondents' Section 11 requests, the Patna High Court, with the parties' consent, appointed a sole arbitrator in 2018 and a new one in 2021 (paras 5.3, 5.6). Insolvency proceedings against the SPV were admitted in 2019 (para 5.5). When the respondents sought four more months, the appellant challenged the sole arbitrator and the High Court's power; on 15.09.2023 the High Court rejected its objections and extended the mandate itself (paras 5.7-5.8, 5.11).

Court's Findings

The 2018 and 2021 appointment orders were never challenged and bind the parties (para 22). Under Section 4, a party that proceeds with the arbitration knowing a requirement of the agreement was not met, without objecting in time, is deemed to waive it (para 23.1). By its conduct the appellant waived its objection to the tribunal's composition; continuing before the sole arbitrator, consenting to the extension and filing counter claims was acquiescence, so the objection could not be raised when a further Section 29A(4) extension was sought (para 25). Pam Development held the same (para 26). The Section 14 moratorium bars recovery action against the corporate debtor, not its own arbitral claim, which can only enhance its value; the resolution professional and the committee of creditors had also authorised the claim (paras 29-30). Section 11 deals only with appointment, so the High Court or the Supreme Court acting under it is not the court defined in Section 2(1)(e) (para 34). Following Associated Contractors, Jagdeep Chowgule and C. Velusamy, the High Court's view was set aside; as the Commercial Court had extended the mandate on 23.03.2026, the outcome stands (paras 43-44).

Legal Principle

A party that consents to a sole arbitrator and takes part without timely objection waives a three-arbitrator clause under Section 4 of the 1996 Act. The IBC moratorium does not bar a corporate debtor's own arbitral claim. Only the Section 2(1)(e) court, not the Section 11 court, can extend the mandate under Section 29A(4) (paras 25, 29, 43).

NyayVidhan's view · Practice note

Why It Matters

A consent recorded in a Section 11 order has lasting effect. A party that agreed to a sole arbitrator, objected to nothing in time and filed counter claims cannot fall back on a three-member clause when the mandate runs out (paras 22, 25). Extension applications under Section 29A(5) belong in the principal civil court or a High Court with ordinary original civil jurisdiction, not in the court that made the appointment; once a Section 11 court appoints the arbitrator, as in HPCL Rajasthan Refinery, its role ends (paras 39, 43). A counterparty in insolvency may still pursue its own claim (para 29).

Editorial comment by the NyayVidhan Editorial Desk. It is not part of the Court's judgment and is not legal advice.

Precedents Relied Upon

Rohan Builders (India) (P) Ltd. Vs. Berger Paints (India) Ltd. (2025) 10 SCC 802
Referred To Discussed at ¶ 18, 41
Section 29A(4) lets the court extend the time for the award before or after the 12-month or extended 18-month period ends, so an extension application is maintainable even after expiry; set out in tracing how the Court has read Section 29A.
C. Velusamy Vs. K. Indhera (2026) 5 SCC 340
Relied Upon Discussed at ¶ 19, 40, 42, 44
The court under Section 29A is the Section 2(1)(e) court, not the High Court or the Supreme Court under Section 11(6); the powers to extend and to substitute under Section 29A(4) and (6) vest in that court. Relied on to set aside the High Court's view.
Union of India Vs. Pam Development Private Limited (2014) 11 SCC 366
Relied Upon Discussed at ¶ 26
A party that did not challenge the High Court's appointment of a sole arbitrator despite a three-member clause, and took part in the arbitration with a counterclaim, is deemed to have waived the requirement under Section 4 read with Section 16.

View all precedents (6)

State of West Bengal Vs. Associated Contractors (2015) 1 SCC 32
Relied Upon Discussed at ¶ 37, 44
Section 2(1)(e) exhaustively defines court as the principal civil court of original jurisdiction or a High Court with original civil jurisdiction; the Chief Justice or designate under Section 11 is not such a court, so Section 42 does not apply to Section 11 applications.
Chief Engineer (NH) PWD (Roads) Vs. M/s. BSC & C and C JV SLP(C) No. 10544 of 2024
Relied Upon Discussed at ¶ 38, 44
The power to extend time under Section 29A(4), and the consequential power to substitute arbitrators under Section 29A(6), vests in the court defined in Section 2(1)(e) (order of 13.05.2024).
Jagdeep Chowgule Vs. Sheela Chowgule (2026) 5 SCC 667
Relied Upon Discussed at ¶ 39, 40, 44
Section 11 jurisdiction is exhausted once the tribunal is constituted; an application to extend time under Section 29A lies to the Section 2(1)(e) court, and a High Court's Section 29A extension was set aside with liberty to move the commercial court.