Himachal Pradesh High Court
M/S S.K.M. Enterprises vs State Of H.P. And Another on 20 March, 2026
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CMPMO No.525 of 2025
Decided on : 20.03.2026
.
M/S S.K.M. Enterprises ...Petitioner.
Versus
State of H.P. and another .....Respondents.
Coram
of
Hon'ble Mr. Justice Romesh Verma, Judge.
Whether approved for reporting?1
For the petitioner: rt Mr. Sumeet Raj Sharma, Advocate.
For the respondents: Mr. Manish Thakur, Deputy Advocate
General.
Romesh Verma, Judge (oral)
The present petition arises out of the order dated 03.05.2024 as passed by the learned Sole Arbitrator, District & Sessions Judge (Retd.) in Arbitration Case No. 1 of 2023, titled M/S S.K.M. Enterprises vs. State of H.P. and another, whereby, the arbitral proceedings were terminated.
2. It has been contended by learned counsel for the petitioner that the petitioner had paid the part of the legal fees to the learned Arbitrator. He submits that even today his client is ready to pay the entire legal fees in consonance with the provisions of the Act.
1Whether reporters of Local Papers may be allowed to see the judgment?
::: Downloaded on - 24/03/2026 20:31:03 :::CIS 23. Faced with the aforesaid situation, learned Deputy Advocate General has relied upon the judgment of Hon'ble Apex .
Court in Civil Appeal No. 14630 of 2025, titled as Harshbir Singh Pannu and another vs. Jaswinder Singh, decided on 08.12.2025 and the relevant portion of the same reads as follows:
"415. A conspectus of our legal discussion is as under: -
of (I) Section 32 of the Act, 1996 is exhaustive and covers all cases of termination of arbitral proceedings under the Act, 1996.
rt The power of the arbitral tribunal to pass an order to terminate the proceedings under the scheme of the Act, 1996 lies only in Section 32(2).
(II) Sections 25, 30 and 38 of the Act, 1996 respectively, only denote the circumstances in which the tribunal would be empowered to take recourse to Section 32(2) and thereby, terminate the proceedings.
(III) The use of the expression "the mandate of the Arbitral Tribunal shall terminate" in Section 32 of the Act, 1996 and its omission in Section(s) 25, 30 and 38 of the said Act, cannot be construed to mean that the nature of termination under Section 32(2) is distinct from a termination under the other aforesaid provisions of the Act, 1996.
(IV) The expression "mandate of the Arbitral Tribunal" is merely descriptive of the function entrusted to the tribunal, namely, the authority and duty to adjudicate the disputes before it. It refers to the obligation of the arbitral tribunal to administer the arbitration by conducting the proceedings in order to adjudicate upon the disputes referred to it.
(V) Irrespective of whether the proceedings are terminated on account of the passing of a final award, or by the withdrawal of claims, or on ::: Downloaded on - 24/03/2026 20:31:03 :::CIS 3 account of default by the claimant, or the intervention of any impossibility in the continuation of the proceedings, the legal effect remains the same, inasmuch as the arbitral tribunal thereafter .
stands divested of its authority to act in the reference.
(VI) The common thread that runs across Sections 25, 30 32 and 38 of the Act, 1996 respectively is that although the arbitral proceedings may get terminated for varied reasons, yet the consequence of such termination remains the same i.e., the of arbitral reference stands concluded and the authority of the tribunal stands extinguished.
(VII) There is a clear distinction between a rt procedural review and a review on merits. The arbitral tribunal possesses the inherent procedural power to recall an order terminating the proceedings as such power is merely to correct an error apparent on the face of the record or to address a material fact that was overlooked. It does not tantamount to revisiting the findings of law or reappreciating the substantive issues already decided.
(VIII) Where an arbitral tribunal passes an order for terminating the proceedings under the Act, 1996, the appropriate remedy available to the parties would be to first file an application for recall of such order before the arbitral tribunal itself. The arbitral tribunal would then in turn be required to examine whether the order does or does not deserve to be recalled.
(IX) If a favourable order is passed for recommencing arbitration proceedings, the only option available to a party aggrieved therefrom, would be to participate in the proceedings and thereafter, challenge the final award under Section 34 of the Act, 1996.
(X) If, however, the recall application is dismissed, the party aggrieved therefrom, would be empowered to approach the court under Section ::: Downloaded on - 24/03/2026 20:31:03 :::CIS 4 14(2) of the Act, 1996. The court would then in turn examine whether the mandate of the arbitrator stood legally terminated or not. If it finds that the proceedings were not terminated in accordance .
with the law, it would be empowered to either set-
aside the order of termination of proceedings and remand the matter to the arbitral tribunal, or, if the circumstances so require, proceed to appoint a substitute arbitrator in terms of Section 15 of the Act, 1996.
B. Final Order."
of
4. The judgment as passed by the Hon'ble Supreme Court has held that when the Arbitral Tribunal passes an order for rt terminating the proceedings under the Act the appropriate remedy available to the parties would be to first file an application for recalling of such order before the Arbitral Tribunal itself.
Admittedly, in the present case no application for recalling the said order has been filed by the petitioner.
5. Faced with the aforesaid situation, learned counsel for the petitioner submits that he may be permitted to withdraw the present petition with liberty to file recalling application before the learned sole Arbitrator. The said prayer is not opposed by learned counsel for the respondents.
6. Consequently, the present petitioner is permitted to withdraw the present petition with liberty to file an appropriate application for recalling the impugned order passed by the learned Arbitrator.
::: Downloaded on - 24/03/2026 20:31:03 :::CIS 57. In the event of filing of any application by the petitioner the learned Arbitrator to act upon strictly in consonance .
with the provisions of the Act in view of the judgment as passed by the Hon'ble Apex Court.
8. With these observations, the present petition is disposed off, so also the pending miscellaneous application(s), if of any.
(Romesh Verma)
rt Judge
March 20, 2026
(Nisha)
::: Downloaded on - 24/03/2026 20:31:03 :::CIS