The Arbitration and Conciliation Act, 1996 devotes surprisingly little attention to how arbitrations end, and parties often discover the consequences only when it is too late to choose differently. Section 32 supplies the framework: proceedings terminate either by the final award or by an order of the tribunal in three defined situations — withdrawal of the claim, agreement of the parties, or the tribunal finding continuation unnecessary or impossible. Section 25 adds the default pathway: a claimant who fails to file the statement of claim risks outright termination, while a respondent's default does not stop the arbitration at all. Understanding these provisions matters both when ending a stalled arbitration and when resisting an opportunistic attempt to do so.
The four exits from an arbitration
| Route | Provision | Trigger | Key consequence |
|---|---|---|---|
| Final award | S. 32(1) | Adjudication of all claims and counterclaims | Award enforceable as a decree after the Section 34 window; merits concluded |
| Withdrawal of claim | S. 32(2)(a) | Claimant withdraws; respondent may object if it has a legitimate interest in final settlement | Proceedings end by order; counterclaims and the respondent\'s interest need express handling |
| Agreement of parties | S. 32(2)(b) | Joint decision, commonly following settlement | Where terms are to be recorded, a consent award under Section 30 is the stronger instrument |
| Continuation unnecessary or impossible | S. 32(2)(c) | Events making adjudication pointless — settlement without recorded terms, abandonment, supervening impossibility | Order of termination; frequently the battleground in stalled arbitrations |
Section 25: default as an exit — and as a trap
Section 25 is asymmetric by design. The claimant\'s default in communicating the statement of claim, without sufficient cause, leads to termination under Section 25(a) — the arbitral equivalent of dismissal for non-prosecution. The respondent\'s default has no such effect: the tribunal continues the proceedings without treating the failure as an admission, and may hear the matter and make an award on the material available. The asymmetry reflects the structure of the process — without a claim there is nothing to arbitrate, while a silent respondent cannot be permitted to stall an arbitration into extinction.
"Sufficient cause" does real work in Section 25(a). Tribunals ordinarily warn before terminating and consider explanations for delay, but a claimant who has commenced arbitration to stop limitation and then gone to sleep should not assume indefinite indulgence. Once terminated, the claimant faces the separate and unforgiving question of limitation on any fresh attempt.
Consent awards versus agreed termination
When parties settle mid-arbitration, two instruments are available and they are not equivalent. A termination by agreement under Section 32(2)(b) simply ends the proceedings; the settlement remains a contract, enforceable only by a fresh action if breached. A consent award on agreed terms under Section 30 records the settlement as an arbitral award, enforceable under Section 36 like any other. Where money remains payable in instalments, or obligations continue over time, the consent award is almost always the prudent choice.
Practical scenarios from commercial practice
After termination: the housekeeping
Termination is not quite the last word. Fees and deposits must be settled and accounted for; the thirty-day windows for correction, interpretation and additional awards under Section 33 run where an award exists; and any challenge to a final award proceeds under Section 34 within its strict limitation. Parties should diarise these dates at the moment of termination — the post-award timetable under the Act is short, jurisdictional in character, and indifferent to oversight.
Frequently Asked Questions
When do arbitral proceedings terminate under Section 32?
By the final arbitral award, or by a tribunal order where the claimant withdraws the claim (unless the respondent objects and shows a legitimate interest in a final settlement of the dispute), where the parties agree to terminate, or where the tribunal finds continuation has become unnecessary or impossible. The tribunal's mandate ends with the termination, subject to the limited survivals the Act provides.
What happens if the claimant does not file its statement of claim?
Under Section 25(a), if the claimant fails to communicate the statement of claim within the agreed or tribunal-fixed time without sufficient cause, the tribunal shall terminate the proceedings. A respondent's failure to file a defence, by contrast, does not entail termination: under Section 25(b) the tribunal continues, without treating the default as an admission, and under Section 25(c) it may proceed ex parte on the evidence before it.
Can a terminated arbitration be revived?
The Act contains no general revival provision, which is precisely why termination orders are consequential. Whether the underlying claims can be re-agitated depends on the mode of termination — a withdrawal intended to abandon the claim, or a termination operating on the merits, stands on a different footing from a purely procedural closure. Parties should obtain clarity in the termination order itself rather than litigate the question later.
Does the tribunal retain any powers after termination?
Limited ones. The tribunal's functions continue for correction and interpretation of the award and additional awards under Section 33, and the settlement-recording mechanism under Section 30 operates before termination. Costs and deposits are dealt with under the fee and costs provisions, and institutional rules may add their own accounting steps.