Authority: High Court of Judicature at Madras

Order Date: 07 September 2026

Case Overview

  • The order consolidates two matters: A No. 5993 of 2024 (application to extend the arbitration mandate) and Arbitration Original Petition No. 39 of 2026 (petition for appointment of an arbitrator under Section 11(5) of the Arbitration and Conciliation Act, 1996).
  • Parties:
  • Petitioner – M/s G Square Realtors (P) Ltd, represented by authorised signatory E. Udayakumar, address Austin Nagar, Chennai.
  • Respondents – 1) M/s Balamurugan Spinners Pvt Ltd, represented by Managing Director Ms. G.K. Indhera, registered office Thanthoni Village, Udumalpet; 2) Ms. G.K. Indhera (individual); 3) C. Velusamy, residing Udumalpet.
  • Counsel: For the petitioner and respondents, HSR Advocates appeared – Mr. R. Vidhya Shankar (for applicants), Mr. K. Vijayan (for respondents 1 & 2), Ms. R. Varalakshmi (for petitioner in O.P.).
  • Background: An earlier arbitration proceeding had a mandate that expired on 20 September 2023. An application for a 125‑day extension (till 25 June 2024) was initially denied, leading to a Special Leave Petition which the Apex Court allowed, holding that an expired mandate could be extended. The Apex Court subsequently declared the award dated 11 May 2024, passed after the mandate expiry, to be ineffective and unenforceable.
  • A Tripartite Agreement was executed on 04 March 2024 among the claimant, respondent, and a third party, novating the original contract and introducing a new arbitration clause.
  • The arbitrator, appointed earlier (former District Judge J.V. Raj), passed an award on 25 June 2024 after the mandate had expired. This award was challenged under Section 34 and set aside by the Commercial Court, Coimbatore on 14 February 2025 as a non‑est award.
  • The Apex Court, in its order dated 24 January 2025, reiterated that awards rendered post‑mandate expiry are unenforceable and interpreted Section 29A(6) & (7) to safeguard the conduct and conclusion of arbitral proceedings.
  • Submissions: The third respondent argued for extending the mandate to allow the same arbitrator to pass a fresh award; respondents 1 & 2 opposed, citing prejudice due to the earlier non‑enforceable award. The petitioner highlighted that Rs 1,00,00,000/- had been paid as advance sale consideration and that the Tripartite Agreement effected a novation, rendering extension unnecessary.

Final Outcome

  • The Court held that extending the mandate would risk prejudice, given the earlier award’s nullity, and therefore elected to substitute the arbitrator.
  • Hon’ble Mr. Justice R. Subramanian, former Judge of this Court, residing at No. 6/29, Flat 1B, Vishwanath Apartments, 5th Main Road, RA Puram, Chennai – 600 028, is appointed as the sole arbitrator, substituting former District Judge J.V. Raj.
  • The substituted arbitrator is entitled to fix his own fees and is directed to decide the dispute as expeditiously as possible.
  • The Original Petition and the application for extension are disposed of; no order as to costs is made.

Topics: Arbitration, Court Order