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2016 Supreme(Bom) 765
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.D. DHANUKA, J.
M/s. Madhav Structural Engineers Limited - Petitioner
Versus
The Vice Chairman And Managing Director, M/s. Maharashtra State Road Development Corporation & Ors. - Respondents
ARBITRATION PETITION NO.584 OF 2016
Decided on : 16-6-2016
Subject
Arbitration Law - TERMINATION OF ARBITRATOR'S MANDATE
Act Referred
ARBITRATION AND CONCILIATION ACT : S.14
CONSUMER PROTECTION ACT : S.10(a), S.10(1)(b)
Headnote
A conjoint reading of Section 12(3)(a) of the Arbitration Act and Section 13(2) clearly indicates that an arbitrator may be challenged only if circum- stances exist that give rise to justifiable doubts as to his independence or impartiality. A party may challenge an arbitrator within 15 days after becoming aware of the constitution of arbitral tribunal or after becoming aware of any circumstances referred to in sub - Section (3) of Section 12 and shall send a written statement of the reasons for the challenge to the arbitral tribunal.
Even if any circumstance existed that gave rise to justifiable doubts as to independence or impartiality of the arbitrator, it could be challenged only under the mandatory procedure prescribed under Section 13(2) within the mandatory period. A party who had failed to follow this procedure within the time prescribe, cannot apply for termination of mandate of the arbitrator by invoking Section 14 which does not provide for termination of mandate on the ground of Section 12(3)(a) of the Arbitration Act.
The mandate of an arbitrator cannot be terminated merely on the basis of any alleged observations made against the arbitrator in the Commission of Enquiry report. Though the petitioner has referred to Section 14 of the Arbitration Act in the first paragraph of the arbitration petition, a perusal of the grounds raised by the petitioner that the circumstances gave rise to justifiable doubts as to independence or impartiality of the arbitrator existed, would not fall under Section 14 of the Arbitration Act and thus the said provision could not be invoked by the petitioner for termination of mandate of the arbitrator on that ground.
Arbitration & Conciliation Act, 1996 - Sections 14 and 15-Termination of mandate of Arbitrator.-Delay in appointment of an Arbitrator by opponent, cannot be a ground of termination of mandate of Arbitrator under Section 14(1)(a) of Act.
The proceeding filed by the petitioner for appointment of the arbitrator was pending in High Court. After disposal of the said proceedings, the respondent No. 1 impugned the order passed by the designate of the Chief Justice in the Supreme Court of India. Immediately after dismissal of the special leave petition filed by the respondent No. 1, the respondent No. 1 appointed the respondent No. 2 as a sole arbitrator. The alleged delay prior to the date of the appointment of the arbitrator cannot be a ground of termination of mandate of the arbitrator under Section 14(1)(a) of the Arbitration Act.
High Court is not inclined to terminate the mandate of the arbitrator on ground of alleged delay in appointment of the arbitrator on the part of the respondent. The petitioner having participated in the arbitration proceedings unconditionally and argued its case, the petitioner cannot be allowed to raise issue of any alleged delay prior to the date of such arguments advanced by the petitioner.
Arbitration & Conciliation Act, 1996 - Sections 14 and 15-Termination of Mandate of Arbitrator.-Refusal of Arbitrator to grant an adjournment in arbitral proceedings, cannot be a ground for termination of mandate of Arbitrator.
The mandate of an arbitrator cannot be terminated on the ground that he was acting in a biased manner or he was conducting proceedings in an improper manner or that he was not following the judicial discipline or he was acting arbitrarily which grounds may be good grounds for challenging an award but cannot be the grounds for interfering during the arbitral proceedings by the Court, refusal on the part of the arbitrator to grant adjournment to the petitioner on the ground that the petitioner had filed this petition under Section 14 of the Arbitration Act for termination of mandate of the arbitrator cannot be a ground for termination of his mandate under Section 14 of the Arbitration Act. If the Arbitrator renders any award by which the petitioner is aggrieved, the petitioner can raise such a ground in the arbitration petition which may be filed under Section 34 of the Arbitration Act. Court is in agreement with the views expressed by the Delhi High Court in the case of Delhi State Industrial and Infrastructure Development Corporation Ltd. v. Integrated Techno System Pvt. Ltd. and another (supra). The petition is devoid of merits and is accordingly dismissed. No order as to costs.
Advocate Appeared:
For the Petitioner: Mr.Anirudha Garge with Mr.Sandeep M. Phatak
For the Respondent: Mr.Prashant Chavan i/b Ms.Reshmarani J. Nathani
1. By this petition filed under section 14 of the Arbitration & Conciliation Act, 1996 (for short “Arbitration Act”), the petitioner has prayed for an order of termination of mandate of the learned arbitrator, the respondent no.2 herein on the grounds mentioned in the arbitration petition and seeks an appointment of any other suitable person as a sole arbitrator to decide the dispute between the petitioner and the respondent no.1. The learned arbitrator is absent, though served. Some of the relevant facts for the purpose of deciding this petition are as under :
2. The respondent no.1 had awarded a contract to the petitioner for implementation of Nagpur – Butibori – Wardha – Talegaon – Karanja – Malegaon – Mehkar – Shindkhed Raja – Jalna – Aurangabad – Vaijapur – Sanwatsar – Puntamba Phata – Zagde Phata – Sinnar Ghoti N H Standard Road ; Section – Loni – Nagzari – Kherda – Karanja including Karanja Bye-pass road, Package – 6 on the the terms and conditions contained in the said contract dated 2nd March, 2001. On 18th October, 2002, the respondent no.1 terminated the said contract.
3. In the year 2007, the petitioner filed Arbitration Petition (100 of 2007) in this Court inter-alia praying for the appointment of a sole arbitrator under clause 67.3 of the contract agreement. On 8th July, 2010, the learned designate of the Chief Justice allowed the said application and directed the respondent no.1 to appoint an arbitrator in accordance with clause 67.3 within 28 days from the date of receipt of the certified copy of the said order. Being aggrieved by the said order dated 8th July, 2010, the respondent no.1 filed Special Leave Petition (C) No.31993 of 2010 in the Supreme Court. On 24th April, 2012, the Supreme Court dismissed the said special leave petition filed by the respondent no.1 and directed the respondent no.1 to appoint an arbitrator within the period prescribed in the said order. The respondent no.1 the thereafter appointed the respondent no.2 as a sole arbitrator on 16th May, 2012.
4. On 20th July, 2012, the learned arbitrator held the first meeting and issued various directions to the parties and fixed the next date of hearing as 15th November, 2012.
5. On 20th September, 2012, the petitioner made a proposal to the respondent no.1 to start conciliation process as per section 30 of the Arbitration Act. On 19th December, 2012, the petitioner made such proposal before the learned arbitrator and requested the learned arbitrator to invoke the provision of conciliation under the Arbitration Act and to act as a sole conciliator. The respondent no.1 agreed to the said request made by the petitioner before the learned arbitrator. The learned arbitrator accordingly kept the arbitral proceedings in abeyance and agreed to act as a sole conciliator as requested by the petitioner. The next date of meeting was fixed as 28th December, 2012.
6. On 4th January, 2013, the conciliation meeting took place. The learned conciliator framed the issues for conciliation. The next meeting was fixed as 28th January, 2013. The process of conciliation however, failed. On 24th September, 2013, the respondent no.1 addressed a letter to the respondent no.1 informing that despite all efforts made by the parties, the conciliation could not succeed and requested the respondent no.2 to proceed with arbitration. On 25th November, 2013, the next meeting came to be held. In the said meeting the learned arbitrator recorded that conciliation proceedings were called off and the arbitral proceedings could start. The learned arbitrator recorded the need to speed up the proceedings. In the said meeting, the petitioner filed an affidavit to butress its claim for damages arising out of the termination of the contract. The learned arbitrator also recorded the desire of the petitioner to lead oral evidence and to have inspection of documents. In the said meeting, the learned arbitrator found various discrepancies in the documents produced by the petitioner. The pet
