Waiver of arbitral objection bars late challenge to continuation beyond the contractual time limit

Section 14 of the Arbitration and Conciliation Act addresses termination of an arbitrator's mandate in specified circumstances, while Section 15 provides for substitution and makes clear that termination of mandate does not automatically end the arbitral proceedings. Section 4 applies where a party knows of a non-compliance and proceeds without timely objection, resulting in waiver. On the stated facts, the petitioners participated in the schedule fixed by the arbitrator, sought extensions, and raised their complaint only later, so the objection to continuation beyond the contractual time limit was treated as waived. The challenge to termination of the mandate therefore failed, and the arbitral proceedings were allowed to continue.

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Issues: Whether the petitioners were entitled to a declaration under Section 14 of the Arbitration and Conciliation Act, 1996 that the arbitrator had become de jure unable to perform his functions and that his mandate had terminated on expiry of the contractual time limit, and whether their conduct amounted to waiver of the objection to the arbitration proceeding continuing beyond that period.

Analysis: Section 14 provides for termination of an arbitrator's mandate in specified situations, while Section 15 contemplates substitution of an arbitrator and makes it clear that termination of mandate does not, by itself, terminate the arbitral proceedings. Section 4 embodies the legislative policy that a party who knows of non-compliance with a requirement and proceeds without stating objection without undue delay is deemed to have waived the objection. The petitioners did not assert at the first opportunity that the four-month contractual time limit must be strictly enforced. Instead, they participated in the procedural schedule fixed by the arbitrator, sought time extensions, and only later objected. In these circumstances, the objection was treated as waived, and the arbitrator was justified in proceeding with the reference.

Conclusion: The petitioners were not entitled to termination of the arbitrator's mandate on the ground urged, and their challenge failed.

Final Conclusion: The petition was dismissed, and the arbitral proceedings were permitted to continue with the appointed substitute arbitrator.

Ratio Decidendi: A party that participates in arbitration without promptly objecting to a known breach of a contractual time stipulation waives that objection, and expiry of the arbitrator's mandate does not, by itself, terminate the arbitral proceedings.

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