An arbitrator appointed under Section 10-A of the Industrial Disputes Act, 1947, is subject to the jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India.

Headnote:
The Supreme Court of India ruled on the validity of an arbitration award issued under Section 10-A of the Industrial Disputes Act, 1947. The Court held that an arbitrator appointed under Section 10-A is subject to the jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India. The Court further held that the arbitrator lost jurisdiction to act as a sole arbitrator if the four arbitrators appointed by the parties unanimously agreed. Additionally, the Court held that the acceptance of hospitality by the arbitrator during the pendency of arbitration amounted to legal misconduct and vitiated the award.
Fact of the Case:

The Air India International Corporation and its employees had a dispute that was referred to arbitration under Section 10-A of the Industrial Disputes Act, 1947. A committee of arbitration was formed, consisting of two representatives from the Corporation, two representatives from the Union, and an independent Chairman nominated by the Government. The committee reached a unanimous agreement on all demands except one, which was left to the Chairman to decide. However, the Chairman disagreed with the agreement and proceeded to give directions on the implementation of the agreement. The Union challenged the legality of the award on the grounds that the Chairman had no jurisdiction to act as a sole arbitrator, that he had accepted hospitality from the Corporation during the pendency of arbitration, and that the directions given by him were prejudicial to the employees.
Finding of the Court:

The Supreme Court of India held that the arbitrator appointed under Section 10-A of the Industrial Disputes Act, 1947, is subject to the jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India. The Court further held that the arbitrator lost jurisdiction to act as a sole arbitrator if the four arbitrators appointed by the parties unanimously agreed. Additionally, the Court held that the acceptance of hospitality by the arbitrator during the pendency of arbitration amounted to legal misconduct and vitiated the award.
Issues: 1. Whether an arbitrator appointed under Section 10-A of the Industrial Disputes Act, 1947, is subject to the jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India? 2. Whether an arbitrator loses jurisdiction to act as a sole arbitrator if the four arbitrators appointed by the parties unanimously agree? 3. Whether the acceptance of hospitality by an arbitrator during the pendency of arbitration amounts to legal misconduct and vitiates the award?
Ratio Decidendi: 1. The Court held that an arbitrator appointed under Section 10-A of the Industrial Disputes Act, 1947, is subject to the jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India because: * The arbitrator is appointed by the Government and is required to follow the procedure prescribed by the rules framed under the Act. * The award of the arbitrator is binding and enforceable in the same manner as an award by a Tribunal constituted under the Act. * The arbitrator is not a private arbitrator, but rather a quasi-judicial body. 2. The Court held that an arbitrator loses jurisdiction to act as a sole arbitrator if the four arbitrators appointed by the parties unanimously agree because: * The terms of reference clearly indicate that the parties intended the four arbitrators to act as a body and that the Chairman was to act as a sole arbitrator only if the four arbitrators failed to reach a unanimous agreement. * To hold otherwise would be to reduce the four representatives of the parties to the position of assessors. 3. The Court held that the acceptance of hospitality by an arbitrator during the pendency of arbitration amounts to legal misconduct and vitiates the award because: * The arbitrator is required to act impartially and independently. * The acceptance of hospitality from one of the parties to the dispute creates a conflict of interest and undermines the arbitrator's impartiality.
Final Decision: The Supreme Court of India allowed the petition and quashed the directions given by the Chairman. The Court upheld the agreement reached by the four arbitrators but set aside the directions issued by the Chairman.

JUDGMENT - Chandrachud, J.

(1)This petition is a sequel to the dispute between the Air India International Corporation and its employees.

(2) Pursuant to a scheme of nationalization of air transport, the Indian Parliament passed an Act called The Air Corporations Act (Act No. XXVII of 1953). Under the said Act, two Corporations called the ""Air India International Corporation"" and the ""Indian Airlines Corporation"" were set up. The Air India International Corporation took over the assets of the Air India International Ltd., a company which used to operate on the international route, while the Indian Airlines Corporation took over the assets of all other air Companies which used to operate on the inland routes.

(3) First in October, 1954 and then in September 1956, the Air Corporations Employees Union (hereinafter referred to as the Union), submitted a list of demands to the Management of the Air India International Corporation (hereinafter referred to as the Corporation). The dispute was referred to the Conciliation Officer of the State Government who reported failure of the conciliation proceedings in January 1958. After the failure of the conciliation proceedings, the Union approached the Management for direct negotiations, whereupon a Committee was appointed to examine the demands of the Union. The efforts to arrive at an agreed formula failed again. Thereafter on the 11th of August, 1958, the Union submitted to the Management a revised charter of 57 demands. A negotiating Committee consisting of two representatives of the Corporation (Mr. R. Doraiswamy, I. A. S., Chief Administrative Officer and Mr. A. S. Banavalikar, Personnel Manager of the Corporation) and two representatives of the Union (Mr. N. C. Mukherjee, General Secretary of the Union and Mr. V. Crasto Regional Secretary of the union) was appointed toexplore a further possibility of an amicable settlement of the disputes. The efforts of the Negotiating Committee bore some fruit, for by an agreement dated the 1st April, 1959, the Management and the Union settled the dispute on 20 demands, and the Union further agreed to withdraw 3 of the demands. As regards the remaining demands, a separate agreement of even date was executed under section 10-A of the Industrial Disputes Act (Act No. XIV of 1947), and by that agreement the parties agreed to refer the disputes specified in Annexure A thereof to the arbitration of a Committee of arbitration. As one of the principle points canvassed before us relates to the true construction and effect to this agreement, it would be useful to set out the relevant terms of this agreement. The agreement, in so far as is material, runs thus:-

""AGREEMENT

Under section 10-A of the Industrial Disputes Act, 1947

BETWEEN

(Names of the parties)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

* * * * * *

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

* * * * * *

I. . . . . . . . . . . . . . . . . . . . . . . . . it is hereby agreed between the parties to refer the following industrial disputes to the Arbitration of a Committee of Arbitration, consisting of two representatives of the Management of Air India International Corporation and two representatives of the Air Corporation Employees Union, with and independent Chairman of the status of a Judge of the High Court to be nominated by Government.

2. . . . . . . . . . . . . . . . . . . . . .

(I) * * * * *

(ii) * * * *

(iii) * * *

(iv) * *

(iv) *

3. We further agree that the unanimous decision of the arbitrators shall be binding on us. In the event of there being no unanimity amongst the Arbitrators, the decision to be made by the independent Chairman nominated by Government will be deemed to be an Award made

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