IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. Patel, J.
Ms Sheetal Maruti Kurundwade - Petitioner
Versus
Metal Power Analytical (I) Pvt. Ltd. & Anr. - Respondents
Notice of Motion (L) No. 453 of 2017 and Arbitration Petition (L) No. 150 of 2017
Decided On : 02-03-2017
Arbitration & Conciliation Act, 1996 - Sections 12(3), (5), Schedule VII, Item 3-Disqualification of Arbitrator.-Arbitrator-counsel having accepted a brief from a particular attorney, advocate in record or lawyer for some other client is not per se a disqualification.
Independence, as used in the statute means nothing more than deciding for oneself. Impartiality is lack of bias; the ability to decide without tilting to one side on considerations other than the merits of the case. Arbitral independence and impartiality is precisely this : to decide `without fear or favour, affection or ill-will`, words familiar to us all.
Therefore, counsel having accepted a brief from a particular attorney, advocate- on-record or lawyer for some other client is not per se a disqualification or ineligibility. The disqualification connection must be between the arbitrator- counsel and the litigant.
G.S. Patel, J.
This Petition is filed under Section 9 and Sections 12(3) and 12(5) of the Arbitration & Conciliation Act, 1996 ("the Arbitration Act"). The Petitioner is the Respondent or opposite party in an arbitration. The 1st Respondent is the claimant. The Notice of Motion seeks ad-interim reliefs in terms of the Petition. By consent, I have taken up the Petition itself for hearing and final disposal. Mr. Lulia for the Petitioner says he has no objection since he is canvassing a question of law and statutory interpretation.
2. The Petition raises a narrow but important point under the Arbitration Act after its 2015 amendment. The question is about the scope and purport of the newly introduced provisions regarding the appointment of arbitrators and challenges to their continuance. Sections 12(1), 12(3), 12(5) and item 3 of Schedule VII of the amended Arbitration Act fall for consideration. Specifically, whether an arbitrator should stand disqualified or be removed in these circumstances, viz.: the arbitrator is a practicing counsel; he is briefed by various law firm in different matters; one such law firm is the one engaged by one of the parties to the arbitration; the counsel himself has never been briefed by that, or any other, law firm for that particular party, or any of the parties to the arbitration; the arbitrator clarifies in writing that he has never been briefed to appear for that particular party, though he is sometimes briefed in other matters by the law firm in question. Mr. Lulia would have it that the fact that the arbitrator, in his practise as counsel, receives with irregular periodicity briefs from the law firm representing a party to the arbitration is sufficient to disqualify him from acting as an arbitrator. It matters not, he says, that the counsel has never acted for that particular client. The counsel is on the 'payroll' of the law firm. Mr. Lulia says he urges no bias against the present arbitrators; he only says that such an appointment is contrary to the amended Act.
3. The facts are few. Respondent No. 1 to this Notice of Motion and Petition is the claimant before the arbitral tribunal. Joined as Respondent No. 2 is an Advocate of our Court of many years standing, Mr. Snehal Shah. He was appointed the presiding Arbitrator. Respondent No. 3 is Mr. Farhan P Dubash, another Arbitrator. Respondent No. 4 is one V.S. Bhadkamkar, the third member of the arbitral panel. The application is directed against Mr. Shah and Mr. Dubash in the following circumstances. The Petitioner, Sheetal Maruti Kurundwade, was appointed as a Trainee Calibration Engineer by the 1st Respondent company on 11th August 2011. She worked there for five years and resigned on 19th March 2016. The company filed Arbitration Petition No. 1061 of 2016 under Section 9 of the Arbitration Act on 12th August 2016. On 30th August 2016, SJ Kathawalla J granted ad-interim relief restraining the Ms Kurundwade from disclosing confidential information, that being the subject matter of the 1st Respondent's Section 9 Petition.
4. The Petitioner's contract with the 1st Respondent had an arbitration clause. The 1st Respondent invoked arbitration. On 11th November 2016, the 1st Respondent nominated Mr. Dubash to act as an Arbitrator and called on the present Petitioner to nominate her Arbitrator of choice. She responded on 24th November 2016, nominating the 3rd Respondent, Mr. Bhadkamkar. On 9th December 2016, the Advocates for the 1st Respondent, M/s Hariani & Co, wrote to both Mr. Dubash and Mr. Bhadkamkar asking them to jointly nominate a third arbitrator. A copy of this letter was sent to Mr. Lulia for the Petitioner.
5. On 21st December 2016, Mr. Dubash wrote to Mr. Shah saying that he and Mr. Bhadkamkar had jointly nominated him, Mr. Shah, as the presiding Arbitrator and requested Mr. Shah to fix a preliminary hearing in the matter. A copy of this letter was sent to the Petitioner's Advocate as well.
6. On 23rd December 2016, Mr. Shah conve
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