Section 32 of the Arbitration and Conciliation Act, 1996 provides that arbitral proceedings are terminated by the final arbitral award or by an order of the tribunal in specified circumstances.
The tribunal issues a termination order when the claimant withdraws its claim — unless the respondent objects and the tribunal recognises a legitimate interest in obtaining a final settlement of the dispute. It also issues one when the parties agree to terminate the proceedings, or when the tribunal finds that continuing has for any other reason become unnecessary or impossible.
Separately, Section 25 allows the tribunal to terminate proceedings where the claimant fails to file its statement of claim without sufficient cause. And under Section 30, if the parties settle, the tribunal terminates the proceedings and, if requested, records the settlement as an award on agreed terms.
Termination matters because it generally ends the tribunal's mandate. After termination, the tribunal cannot simply resume, and a party wanting to pursue the claim may need to start fresh — subject to limitation.
The practical point: do not withdraw a claim casually, and if settlement is reached, ask the tribunal to record it as an award on agreed terms so that it is directly enforceable.