(2025-2)217 PLR 770 (Del.) (SN) = 2025 PLRonline 482867
HIGH COURT OF DELHI AT NEW DELHI
Present: Justice Jasmeet Singh
MECWEL CONSTRUCTIONS PVT. LTD. – Appellant/Petitioner(s)
Versus
GE POWER SYSTEMS INDIA PVT. LTD. – Respondent(s)
O.M.P. (T) (COMM.) 38/2025, 39/2025, 40/2025
(i) Arbitration and Conciliation Act, 1996 – Section 14, 15, 25(a) and 32 – Termination of arbitral proceedings for failure to file statement of claims – Whether order under Section 25(a) constitutes an arbitral award – Held, order terminating proceedings under Section 25(a) is not an arbitral award but an order of termination under Section 32(2)(c) – Such order does not adjudicate rights of parties or decide any issue in dispute – Challenge to such order maintainable under Section 14(2) and not under Section 34 – Award must finally decide an issue forming part of dispute referred to arbitration – Order under Section 25(a) being procedural in nature lacks essential attributes of arbitral award. [Para 19]
“ Hence, I am of the view that an order under Section 25(a) does not and cannot amount to an Award as it does not deal with the rights of the parties before the Arbitrator. Such an order merely terminates the arbitral proceedings on account of the claimant’s default in filing the statement of claim and does not involve any adjudication or determination of the rights or obligations of the parties. For an order to qualify as an Award, it must decide, either finally or on an interim, an issue forming part of the dispute referred to arbitration. An order under Section 25(a), being procedural in nature and not addressing the substantive lis between the parties, lacks the essential attributes of an Arbitral Award.
Additionally, the judgments relied upon by the petitioner further show that the Court is to give primacy to the arbitration proceedings as the parties have invested considerable time, effort and resources.”
(ii) Arbitration and Conciliation Act, 1996 – Section 32 – Distinction between arbitral award and order of termination – Section 32 makes clear distinction between award under Section 32(1) and order of termination under Section 32(2) – Order under Section 32(2) is not an award – Termination of proceedings on failure to file statement of claims falls under Section 32(2)(c) where continuation becomes impossible – Such termination does not constitute award as it does not decide points at issue between parties – Supreme Court precedents establish that award must adjudicate substantive dispute. [Para 14, citing PCL Suncon v. NHAI]
Cases Referred to:
(2012) SCC OnLine Del 5443, Awasthi Construction Co. v. Govt. of NCT of Delhi, held that order under Section 25(a) refusing to restore arbitral proceedings constitutes award challengeable under Section 34. [Para 10]
(2016) SCC OnLine Cal 479, The India Trading Company v. Hindustan Petroleum Corporation Ltd, held that termination under Section 25(a) is final decision constituting award. [Para 11]
(2018) SCC OnLine Del 8287, Angelique International Limited v. SSJV Projects Private Limited, followed India Trading Company holding termination order is award. [Para 12]
(2021) SCC OnLine Del 313, PCL Suncon v. National Highway Authority of India, held order under Section 25(a) is not award but order of termination under Section 32(2), challengeable under Section 14. [Para 14]
(2014) 7 SCC 255, Lalitkumar V. Sanghavi v. Dharamdas V. Sanghavi, Supreme Court held order terminating proceedings under Section 32(2)(c) is not award, challenge lies under Section 14(2). [Para 17]
(2018) 2 SCC 534, Indian Farmers Fertilizer Cooperative Limited v. Bhadra Products, Supreme Court held award must finally decide point at which parties are at issue in arbitration. [Para 15]
2019 SCC OnLine Bom 250, Neeta Lalitkumar Sanghavi v. Bakulaben Dharmadas Sanghavi, Bombay High Court held order terminating proceedings not deciding lis between parties is not award. [Para 14]
2017 SCC OnLine Del 6560, Gangotri Enterprises Limited v. NTPC Tamil Nadu Energy Company Limited, held arbitrator’s mandate terminated for claims when proceedings closed under Section 25(a), challenge lies under Section 14. [Para 18]
(2006) 13 SCC 322, Paramjeet Singh Patheja v. ICDS Ltd, Supreme Court held legal fiction of equating award to decree is for limited purpose of enforcement only. [Para 10]
Facts: GE Power Systems India Pvt. Ltd. awarded contracts for thermal power projects to petitioner Mecwel Constructions Pvt. Ltd. Following delays and termination notices, petitioner filed Section 9 petitions which were disposed of by appointing an arbitrator. Arbitrator passed order dated 18.11.2024 closing proceedings under Section 25(a) for non-filing of statement of claims and non-payment of arbitral fee. Despite further opportunities, arbitrator passed final order dated 24.02.2025 holding proceedings terminated. Petitioner filed present petitions under Sections 14 and 15 seeking to continue arbitration proceedings.
For Petitioner: Dr. Amit George, Adv., Mr. Shashwat Kabi, Adv., Ms. Ibansara Syiemlieh, Adv., Mr. Adhishwar Suri, Adv., Mr. Vaibhav Gandhi, Adv. and Mr. Kartikay Puneesh, Adv. For Respondent: Mr. Akshay Sapre, Mr. Abhijeet Swaroop, Mr. Vinam Gupta, Ms. Shivani Karmakar, Advs.
JUDGMENT
Jasmeet Singh, J. (Oral) – (14.10.2025, Corrected and released 23.10.2025) –
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