Few interlocutory questions derail arbitrations as often as the expiry of the tribunal’s mandate under Section 29A of the Arbitration and Conciliation Act, 1996 — and few are as frequently filed in the wrong court. In South Bihar Power Distribution Company Ltd v. India Power Corporation Ltd & Anr., Civil Appeal No. 9313 of 2026 with Civil Appeal No. 9325 of 2026, decided on 28 October 2026 and reported as 2026 INSC 1165, the Supreme Court answered three questions in one judgment: who may object to a sole arbitrator after participating before one, whether a company in insolvency may pursue its own claims, and which court extends an arbitrator’s time.
Background: a franchise agreement, an insolvency and an expiring mandate
The appellant, a distribution licensee in Bihar, signed a Distribution Franchisee Agreement dated 31 December 2013 with India Power Corporation Ltd and its special purpose vehicle, India Power Corporation (Bodhgaya) Ltd — later renamed Vikriti Power Limited after a resolution plan was approved in its insolvency. Disputes arose; in 2018 the High Court, with the parties’ consent, appointed a retired judge as sole arbitrator, and in 2021, again by consent, a former Chief Justice of India replaced him. The agreement itself, in clause 17.2.5, had stipulated a three-member tribunal.
When the arbitration overran the statutory timelines, the respondents sought an extension. The appellant then raised, for the first time with vigour, the objection that a sole arbitrator was contrary to the agreement, and sought constitution of a three-member tribunal. On 15 September 2023 the High Court held the objection waived, affirmed the SPV’s standing despite the insolvency, and extended the arbitrator’s mandate by four months under Section 29A.
Waiver: participation forecloses the composition objection
The Supreme Court upheld the waiver finding. Under Section 4 of the 1996 Act, a party which knows of a non-compliance with the agreement and yet proceeds with the arbitration without stating its objection without undue delay is deemed to have waived its right to object. The appellant had consented to the sole arbitrator’s appointment, consented again to the replacement, participated in hearings, and agreed to extensions. The judgment quotes the High Court’s conclusion with approval: the consent was evident and the acquiescence clearly indicated, operating as a waiver under Section 4. An objection to the tribunal’s composition is a Section 16 plea to be raised at the threshold — not a reserve weapon for the endgame.
Insolvency: the moratorium shields, it does not silence
The Court reaffirmed that Section 14 of the IBC is a shield against recovery actions targeting the corporate debtor, not a bar on the debtor prosecuting its own claims. With the resolution professional having authorised the arbitration, the SPV had standing to continue. Counterparties cannot use a respondent’s insolvency to stall claims the insolvent company itself is pursuing.
Section 29A: the extension belongs to the principal civil court
On the third question the appellant succeeded in principle but not in outcome. The Supreme Court held that the High Court was wrong to treat itself as the “court” competent to extend the arbitrator’s mandate under Section 29A. Following the line of authority in State of West Bengal v. Associated Contractors and later decisions, the power belongs to the principal civil court of original jurisdiction in the district; a High Court is the proper forum only where it exercises ordinary original civil jurisdiction — which the Patna High Court does not. The error, however, was academic: the Principal District Judge, Patna had on 23 March 2026 already extended the mandate by six months. The appeals were therefore dismissed, the restraint on publishing the award was lifted, and the arbitrator was directed to render the award within six weeks.
Three working rules from one judgment
| Issue | Rule after South Bihar Power |
|---|---|
| Objection to sole arbitrator | Raise it at the threshold under Section 16; participation and consent to extensions amount to waiver under Section 4. |
| Corporate debtor’s claims | The Section 14 IBC moratorium does not bar the debtor’s own arbitral claims pursued with the resolution professional’s authority. |
| Section 29A extension forum | The principal civil court of original jurisdiction — the High Court only where it has ordinary original civil jurisdiction (as in Delhi, Bombay, Calcutta and Madras). |
For Delhi practitioners the last row carries a local nuance: because the Delhi High Court exercises ordinary original civil jurisdiction above its pecuniary threshold, Section 29A applications in high-value Delhi-seated arbitrations continue to lie there — but for arbitrations seated in districts across most of the country, the application belongs before the Principal District Judge, and filing in the High Court invites dismissal for want of jurisdiction.
Frequently Asked Questions
What was the dispute about?
A Distribution Franchisee Agreement dated 31.12.2013 for power distribution in Bihar, between South Bihar Power Distribution Company, India Power Corporation and a special purpose vehicle later renamed Vikriti Power Limited. Clause 17.2.5 provided for arbitration before a three-member panel, but the High Court — with the parties’ consent — appointed a sole arbitrator in 2018 and a replacement in 2021.
Can a party object to a sole arbitrator after participating in the arbitration?
Not ordinarily. The Court held that by participating in the proceedings and consenting to extensions, the appellant waived its objection to the composition of the tribunal under Section 4 read with Section 16 of the 1996 Act. An objection to composition must be raised promptly, not held in reserve until the arbitration runs into difficulty.
Does the IBC moratorium stop a corporate debtor from arbitrating its claims?
No. The moratorium under Section 14 of the Insolvency and Bankruptcy Code is intended to prohibit debt recovery actions against the corporate debtor; it does not prevent the debtor itself from pursuing its own arbitral claims, and here the resolution professional had authorised the proceedings.
Which court extends time under Section 29A?
The Supreme Court set aside the High Court’s view that it could extend the mandate. The “court” for Section 29A is the principal civil court of original jurisdiction; a High Court qualifies only where it exercises ordinary original civil jurisdiction. Because the Principal District Judge, Patna had already extended the mandate by six months in March 2026, the error did not change the outcome: the appeals were dismissed and the arbitrator directed to publish the award within six weeks.