Supreme Court Replaces Justice Arun Mishra With Justice Sanjay Kishan Kaul as Sole Arbitrator in Adani-RVUNL Coal Dispute
The Supreme Court has modified the Rajasthan High Court’s order appointing former Supreme Court judge Justice Arun Mishra as the sole arbitrator in a commercial dispute between Parsa Kente Collieries Ltd. (PKCL) and Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUNL). The Supreme Court has instead appointed former Supreme Court judge Justice Sanjay Kishan Kaul as the sole arbitrator after the parties mutually agreed to his appointment.
The decision is significant in the context of arbitration proceedings involving major infrastructure and energy contracts. It also highlights the importance of the manner in which arbitral appointments are made and the role of mutual consent between parties in resolving disputes concerning the constitution of an arbitral tribunal.
The matter was considered by a three-judge Bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana. The case is titled Rajasthan Rajya Vidyut Utpadan Nigam Ltd. v. Parsa Kente Collieries Limited, Special Leave Petition (Civil) No. 25773 of 2026, reported as 2026 LLBiz SC 262.
Background of the Dispute
The dispute arises from the contractual relationship between RVUNL and Parsa Kente Collieries Ltd. concerning the mining and supply of coal from the Parsa East and Kanta Basan coal blocks.
PKCL is a joint venture in which Adani Enterprises Ltd. holds a 74% share, while RVUNL holds the remaining 26%. The joint venture was established for the development and operation of coal blocks and the supply of coal to RVUNL’s thermal power stations.
The parties entered into a Coal Mining and Delivery Agreement (CMDA) on 16 July 2008. The agreement governed important aspects of the mining and delivery arrangement and subsequently became the basis for several contractual disputes between the parties.
As disagreements emerged concerning the coal supply arrangement and contractual obligations, the parties became involved in arbitration proceedings. The disputes have included issues relating to price adjustment and other contractual claims arising from the long-term coal supply relationship.
Appointment of Justice Arun Mishra
The issue concerning the arbitrator arose before the Rajasthan High Court in 2026.
On 3 July 2026, the Rajasthan High Court appointed Justice Arun Mishra, a former Supreme Court judge, as the sole arbitrator in the arbitration proceedings between the parties. The High Court’s order directed the arbitrator to adjudicate the issues arising in the dispute.
The appointment subsequently came under challenge before the Supreme Court. RVUNL approached the apex court seeking a change in the arbitrator.
The challenge brought the question of the constitution of the arbitral tribunal before the Supreme Court, requiring it to examine the circumstances surrounding the High Court’s appointment.
Proceedings Before the Supreme Court
The matter was heard by the Supreme Court on 3 August 2026.
RVUNL sought the replacement of Justice Arun Mishra as the sole arbitrator. However, the Supreme Court did not accept the legal ground advanced for seeking the change as being sustainable.
This aspect of the order is particularly important. The Supreme Court did not record a finding that Justice Arun Mishra was biased, lacked independence, or was legally disqualified from acting as an arbitrator.
Instead, the Court expressly observed that it did not find the ground urged for changing the arbitrator to be legally sustainable.
During the course of the hearing, however, the parties mutually agreed to the appointment of Justice Sanjay Kishan Kaul, another former judge of the Supreme Court, as the sole arbitrator.
Taking note of this agreement, the Supreme Court modified the Rajasthan High Court’s order and appointed Justice Kaul in place of Justice Mishra.
Justice Sanjay Kishan Kaul Appointed as Sole Arbitrator
Following the agreement between the parties, Justice Sanjay Kishan Kaul was appointed to act as the sole arbitrator.
The Supreme Court therefore did not decide the matter by holding that Justice Mishra was unsuitable to act as arbitrator. Rather, the change followed the parties’ mutual agreement recorded during the hearing.
This distinction is important when understanding the legal effect of the order.
A judicial order recording the replacement of an arbitrator should not automatically be interpreted as a finding of misconduct, bias or incapacity on the part of the earlier appointee. In the present case, the Supreme Court’s order makes clear that the legal ground put forward for replacing Justice Mishra was not found sustainable.
The eventual appointment of Justice Kaul was based on the consensus reached between the parties during the proceedings.
Why the Decision Matters for Arbitration
The case provides an important illustration of the significance of party autonomy in arbitration.
Arbitration is fundamentally based on the agreement of the parties. Unlike ordinary litigation, where a judge is assigned through the institutional court system, parties to an arbitration generally have a significant role in determining who will adjudicate their commercial dispute.
Where both parties agree upon a particular arbitrator, such consensus can provide greater certainty and reduce procedural disputes concerning the constitution of the tribunal.
At the same time, arbitral appointments must comply with the applicable provisions of the Arbitration and Conciliation Act, 1996 and the principles governing independence and impartiality of arbitrators.
The present case demonstrates that challenges to an arbitral appointment must be examined on their legal merits. A party’s objection to an arbitrator does not, by itself, establish that the arbitrator is legally disqualified.
Here, the Supreme Court specifically noted that the ground urged for changing Justice Mishra was not legally sustainable. Nevertheless, because the parties subsequently reached an agreement on the appointment of Justice Kaul, the Court modified the earlier order accordingly.
A Dispute Rooted in a Long-Term Coal Arrangement
The underlying dispute also illustrates the complexity of arbitration in the energy and infrastructure sectors.
Long-term coal mining and supply agreements involve several interconnected commercial obligations. Questions relating to pricing, supply, development of mining blocks, operational responsibilities and contractual adjustments can generate significant disputes between the parties.
In such cases, arbitration is often preferred because it allows commercial disputes to be determined by a neutral adjudicator with experience in complex contractual matters.
The PKCL-RVUNL dispute demonstrates how disagreements arising from an infrastructure contract can continue through multiple stages of arbitration and judicial proceedings.
The appointment of a new sole arbitrator now provides the arbitral process with a fresh tribunal following the agreement recorded before the Supreme Court.
No Finding of Bias Against Justice Arun Mishra
One of the most important aspects of the Supreme Court’s order is what it does not say.
The order should not be read as a judicial finding that Justice Arun Mishra was biased or that his appointment was legally invalid.
The Supreme Court specifically recorded that the ground relied upon for seeking his replacement was not legally sustainable. The subsequent substitution occurred because the parties mutually agreed to appoint Justice Sanjay Kishan Kaul.
This distinction is particularly important in legal reporting. Characterising the order as a finding against Justice Mishra could create an inaccurate impression about the Court’s reasoning.
The decision is better understood as an order giving effect to the parties’ agreed choice of a new sole arbitrator while modifying the earlier High Court appointment.
Conclusion
The Supreme Court’s decision in Rajasthan Rajya Vidyut Utpadan Nigam Ltd. v. Parsa Kente Collieries Limited marks another important development in the ongoing arbitration arising from the coal mining and supply relationship between RVUNL and PKCL.
The Court modified the Rajasthan High Court’s 3 July 2026 order that had appointed Justice Arun Mishra as sole arbitrator and appointed Justice Sanjay Kishan Kaul instead.
However, the legal nuance behind the decision is crucial. The Supreme Court did not hold that the ground advanced against Justice Mishra was legally valid. In fact, it expressly stated that the ground was not legally sustainable. The change in arbitrator ultimately resulted from the mutual agreement of the parties during the Supreme Court proceedings.
The case therefore highlights two important principles in arbitration: the necessity of legally sustainable grounds when challenging an arbitrator and the importance of party autonomy in determining the composition of an arbitral tribunal.
As the arbitration proceeds before Justice Sanjay Kishan Kaul, the underlying contractual dispute between PKCL and RVUNL will continue to be examined through the arbitral process. The Supreme Court’s order ensures that the proceedings move forward with a mutually agreed sole arbitrator while preserving the distinction between a consensual change in appointment and a judicial finding of disqualification or bias.
