The importance of parties' candour, fairness, and transparency in arbitration proceedings and the waiver of the right to object under Section 4 of the Arbitration and Conciliation Act, 1996.

The relief which the Petitioners seek in an Arbitration Petition invoking Section 14 of the Arbitration and Conciliation Act, 1996, is in the following terms:

“that this Hon'ble Court be pleased to declare that Mr. S.N. Variava has become de jure unable to perform his functions and the mandate of Mr. S.N. Variava to act as an Arbitrator in the arbitral proceedings between the parties has terminated.”

2. The Petitioners and the Second Respondent are partners of a partnership firm by the name of Hetali Construction Company. The First Respondent is a Company incorporated under the Companies' Act, 1956 and is the Claimant in the arbitral proceedings before the Hon'ble Mr.Justice S.N. Variava, former Judge of the Supreme Court. The Petitioners are party Respondents to the arbitral proceedings. The Third Respondent to the present proceedings is the Court Receiver who has been appointed as Receiver of the properties and assets of the partnership.

3. Placing reliance on a document of 28th April 2000 as constituting an arbitration agreement between the First Respondent and the partnership, the First Respondent invoked arbitration in April 2003. The First Respondent instituted an application under Section 11 of the Act. By an order dated 14th November 2003, a Learned Single Judge of this Court appointed Mr.Justice V.D. Tulzapurkar, former Judge of the Supreme Court as Sole Arbitrator, recording that without prejudice to their rights and contentions, Learned Counsel for the parties had unanimously agreed to the appointment. While disposing of the application under Section 11, the Learned Single Judge held that the Second and Third Respondents before the Court in those proceedings would be entitled to challenge the jurisdiction of the Arbitrator and the validity and effect of the arbitration agreement. A Writ Petition under Article 226 of the Constitution filed by the Petitioners to challenge the order of the Learned Single Judge was dismissed by a judgment and order dated 20th January 2004 of the Division Bench. The Division Bench observed that the Petitioner had an adequate remedy under Section 16 of raising all contentious issues relating to the existence of the arbitration agreement and the constitution of the Arbitral Tribunal, before the Tribunal. The Division Bench consequently held that no fit case was made out for the invocation of the writ jurisdiction under Article 226 of the Constitution.

4. A Special Leave Petition was filed by the Petitioner before the Supreme Court in order to challenge the order of the Division Bench dated 20th January 2004. The Supreme Court issued notice on 8th March 2004 and stayed proceedings before the Learned Arbitrator until further orders. The Learned Sole Arbitrator died in October 2004. The Special Leave Petition thereafter came up before the Supreme Court on 24th April 2007. The Supreme Court observed that in the facts and circumstances of the case, the Court was not inclined to exercise its jurisdiction under Article 136 of the Constitution and the petition would accordingly stand dismissed. The order of the Supreme Court records that the Learned Sole Arbitrator having since passed away, Counsel for the parties were agreed that the Hon'ble Mr.Justice S.N. Variava, be appointed as Sole Arbitrator in place of Mr.Justice V.D. Tulzapurkar. The Supreme Court observed that all points including the existence, validity and enforceability of the contract, as indicated by the Division Bench of this Court in its judgment, shall be decided by the Learned Arbitrator.

5. The first preliminary meeting was held before the Learned Arbitrator on 4th May 2007. The claimant was permitted to file a statement of claim and a compilation of documents on or before 1st June 2007. The Respondents to the arbitral proceedings including the Petitioners herein, were to file their Written Statement and counter claims on or before 6th July 2007. The Claim