Arbitral termination requires a recorded finding that continuation is impossible or unnecessary; mere inaction does not prove abandonment.

Section 32(2)(c) of the Arbitration and Conciliation Act permits termination of arbitral proceedings only where the tribunal records, on the material before it, that continuation has become unnecessary or impossible. Mere inactivity by a claimant, including failure to seek a hearing date, is not enough to establish abandonment; implied abandonment can be inferred only from clear circumstances leaving no reasonable alternative conclusion. The tribunal must also conduct the proceedings and fix hearings, and a party's default at a hearing is ordinarily addressed under Section 25. On the facts, the record did not show express or implied abandonment, so termination was invalid and the order setting it aside was sustained.

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Issues: Whether the arbitral tribunal could validly terminate the arbitral proceedings under Section 32(2)(c) of the Arbitration and Conciliation Act, 1996 on the ground that the claimant had abandoned the claim and the continuation of the proceedings had become unnecessary.

Analysis: Section 32(2)(c) can be invoked only when the arbitral tribunal records satisfaction, on the material before it, that continuation of the proceedings has become unnecessary or impossible. Mere inactivity by a claimant, or failure to request a hearing date, does not by itself establish abandonment. Abandonment may be express or implied, but implied abandonment can be inferred only from clinching circumstances that leave no other reasonable conclusion. The tribunal also has a duty to conduct the proceedings and fix hearings; if a party defaults at a hearing, the tribunal may resort to the mechanism under Section 25. On the facts, the claimant had participated in the connected arbitration, no hearing on its separate claim had been fixed for a substantial period, and the material did not establish any express or implied abandonment.

Conclusion: The termination of the arbitral proceedings under Section 32(2)(c) was invalid and unsustainable.

Final Conclusion: The appeal failed, and the order setting aside the termination of the arbitral proceedings was sustained, with the parties left to take steps for substitution of the arbitrator in accordance with law.

Ratio Decidendi: Section 32(2)(c) permits termination of arbitral proceedings only on a recorded and material-based finding that continuation has become unnecessary or impossible; abandonment of a claim cannot be inferred from mere inaction or non-request for a hearing date unless the conduct unmistakably leads to that sole inference.

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