Section 32 Arbitration Act: Termination of proceedings

Section 32 of Arbitration and Conciliation Act, 1996: Termination of proceedings

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

(1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2).

(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where—

(a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute;

(b) the parties agree on the termination of the proceedings; or

(c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.

(3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings.

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Arbitration Sec 2(1)(a) Arbitral Tribunal Sec 2(1)(d)

Legal Commentary & Landmark Judgments: Section 32

Section 32 of the Arbitration and Conciliation Act, 1996 governs the termination of arbitral proceedings, prescribing that proceedings terminate upon the final arbitral award or upon an explicit order of termination passed by the tribunal under specified contingencies.

Termination upon Final Award: The arbitral proceedings shall be terminated by the final arbitral award.
Order of Termination Grounds: Tribunal issues an order of termination where: (a) claimant withdraws claim, unless respondent objects and tribunal recognizes legitimate interest in final settlement; (b) parties agree on termination; (c) tribunal finds continuation has become unnecessary or impossible.
Functus Officio Mandate: Section 32(3): The mandate of the arbitral tribunal terminates with the termination of arbitral proceedings, subject to Section 33 and Section 34(4).
No Collateral Resuscitation: Once proceedings terminate under Section 32, the arbitrator cannot resume proceedings without a fresh appointment or court remand.

Key Landmark Precedents:

Srei Infrastructure Finance Ltd. v. Tuff Drilling (P) Ltd., (2018) 11 SCC 470: The Supreme Court analyzed Section 32, holding that while final awards terminate proceedings, an order terminating proceedings for default under Section 25(a) can be recalled on sufficient cause before the tribunal becomes functus officio.
Lalitkumar V. Sanghavi v. Dharamdas V. Sanghavi, (2014) 7 SCC 255: The Supreme Court affirmed that an order terminating arbitral proceedings under Section 32(2)(c) because arbitration became impossible is amenable to challenge under Section 14(2).

Courtroom Practice & Strategic Litigation Guidance:

Ensure that the final arbitral award explicitly states that all claims and counterclaims not expressly granted are dismissed, and formally declares the proceedings terminated under Section 32 to render the tribunal functus officio.

Section 32: Termination of proceedings

Section 32 of Arbitration and Conciliation Act, 1996: Termination of proceedings

Legal Commentary & Landmark Judgments: Section 32