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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
SURAJ GOVINDARAJ, J.
J.M. Swamy – Appellant
Versus
Government Of India Central Public Work Department Rep By Its – Respondent
Civil Misc. Petition No. 168 of 2021
Decided on : 11-08-2022
Arbitration and Conciliation Act, 1996 - Section 11 (6) (a) & (c), 11 , 9, 12(1)(b) , 12(5) , 13 - Sole Arbitrator - Challenge procedure - Grounds for challenge - Seeking interim protection - there are any justifiable doubts as to independence or impartiality of Arbitrator appointed or not in light of grievance raised by petitioner and petitioner not being acceptable to said Arbitrator arbitrating disputes between parties - bar under Section 12(5) of A&C Act would apply to a former employee or not - In interest of speedy arbitration it is required of this court to appoint an Arbitrator acceptable to one and all so as avoid any delay in such challenge proceedings. (Para 29).
Finding of the Court: Court is of considered opinion that there are justifiable grounds about Arbitrator being independent or impartial and therefore, would come within mischief of Section 12(5) of A&C Act. Therefore, appointment is made prior to amendment or post amendment, Court is of considered opinion that disqualification on account of possible conflict of interest and justifiable grounds of impartiality and independence would apply to Arbitrator appointed by respondent. When such a disqualification is exfacie evident, Court is of considered opinion that there would be no purpose served by this Court permitting petitioner to raise issue by filing necessary challenge before Arbitrator in terms of Section 13 of A&C Act.
Result: Ordered accordingly.
ORDER :
1. The petitioner is before this Court seeking for the following reliefs:
b. To pass an appropriate order as per the clause 25 of GCC and also amended act 2015 (3 of 2016) by appointing independent and impartial sole arbitrator under section 11 (8) of the act for settlement of disputes/claims between the parties as per the conditions of contract.
c. Pass such other orders as the Hon'ble Court deems fit in the interest of justice and equity.
d. MAKE any further scheme for dealing with the matter as contemplated under sub-section (10) of section 11 of the Arbitration and Conciliation Act, 1996 Amended Act 2015 (3 of 2016).
2. The petitioner having participated in a tender, had been awarded certain works in pursuance of which the work order dated 23.01.2017 came to be issued and an agreement dated 15.02.2017 came to be executed between the parties, wherein the settlement of disputes and arbitration is governed by a rather long dispute resolution clause in terms of Clause 25 thereof which is reproduced hereunder for easy reference:
Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design, drawing and instructions here-in before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating the contract, designs, drawings, specifications, estimates, instructions, orders conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter:
i. If the contractor considers any work demanded of him to be outside the requirements of contract, or disputes any drawings, record or decision given in writing by the Engineer in-Charge on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable, he shall promptly within 15 days request the Superintending Engineer shall give his written instructions or decision within a period of one month from receipt of contractor's letter.
If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision of the Superintending Engineer, the contractor may, within 15 days of receipt of Superintending Engineer’s decision, appeal to the Chief Engineer who shall afford an opportunity to the contractor to be heard, if the latter so desire, and to offer evidence in support his appeal. The Chief Engineer shall give his decision within 30 days of receipt contractor's appeal. If the contractor is dissatisfied with the decision of the Chief Engineer, the contractor may within 30 days from the receipt of the Chief Engineer’s decision, appeal before the Dispute Redressal Committee (DRC) along with a list of disputes with amounts claimed in respect of each such dispute and giving reference to the rejection of his disputes by the Chief Engineer. The Dispute Redressal Committee (DRC) shall give his decision within a period of 90 days from the receipt of Contractor’s appeal. The constitution of Di
Point of Law : It is not open for the petitioner to challenge the learned Arbitrator on the ground that there are justifiable doubts as to his independence and impartiality in terms of the Guidelines....
The court emphasized the necessity for impartiality in arbitration, ruling that automatic appointments of arbitrators undermined the arbitration clause, rendering the award invalid.
The main legal point established in the judgment is the court's authority to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, and the considerations for ensuri....
An arbitrator's mandate can be terminated when they fail to act without undue delay; new appointments must ensure impartiality as per updated legal standards.
The appointment of an arbitrator must comply with Section 12(5) of the Arbitration & Conciliation Act, ensuring independence and impartiality, regardless of when the arbitration proceedings were init....
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