The Nagpur Bench of the Bombay High Court has rejected an application filed by the Nagpur Municipal Corporation (NMC), its Commissioner, and Nagpur Environmental Services Limited (NESL) seeking the removal of the arbitrator appointed to resolve their dispute with Orange City Water Private Limited (OCW). The civic authorities had approached the court under the Arbitration and Conciliation Act, 1996 and requested the termination of the mandate of retired Supreme Court judge Justice A K Sikri, who was appointed as the sole arbitrator in September 2025. They also sought the appointment of a substitute arbitrator and a stay on the ongoing arbitration proceedings. The main objection raised by NMC and NESL related to the arbitration fees fixed by the tribunal.

 

According to the applicants, the fees were excessively high for a public body funded by taxpayers and were not in line with the fee schedule prescribed under the Bombay High Court (Fees Payable to Arbitrators) Rules, 2018. They further argued that the consent given to the fee structure by their representatives and lawyers had been provided without obtaining prior approval from the competent authorities within the organisations. However, Justice Prafulla S Khubalkar was not convinced by these arguments. In his judgment, the court noted that the fee structure had been accepted during the preliminary proceedings in the presence of the parties’ representatives and their legal counsel. The order recording the proceedings clearly showed that the fees were fixed with the consent of all sides and were to be shared equally between the parties.

 

The court observed that at the time the fees were finalised, neither NMC nor NESL had raised any objection. No request was made to seek additional time for obtaining approval from senior officials, including the Municipal Commissioner or the Managing Director of NESL. Having agreed to the arrangement earlier, the applicants could not later challenge the fees as being excessive, the court said. Justice Khubalkar also rejected the contention that the arbitrator had become legally incapable of performing his duties because of the fee dispute.

 

The court held that the applicants had failed to establish any grounds under Section 14 of the Arbitration and Conciliation Act for terminating the arbitrator’s mandate. While NMC relied on previous court rulings to support its case, the High Court found that the facts of those cases were different and therefore not applicable to the present dispute. Concluding that no legal basis existed for either terminating the arbitrator’s mandate or appointing a replacement, the court dismissed the application. It also advised both parties to cooperate in the arbitration proceedings and avoid unnecessary delays so that the dispute can be resolved at the earliest. Adv J B Kasat represented the applicants while Sr Adv Sunil V Manohar, Adv N G Moharir for OCW.