The main legal point established is that an Arbitrator appointed under the M.S.M.E.D. Act is required to disclose his independence and impartiality as per Section 12(1)(2) read with Schedule 6th of the Arbitration and Conciliation Act, 1996, to ensure fairness and credibility in the arbitration proceedings.

JUDGMENT :

Subhasis Dasgupta, J.

1. This revisional application is directed against the order dated 5th July, 2022 passed by learned Arbitrator in an arbitration proceeding being Case No. DL/10/M/SWC/00359 (LMI India Private Limited Vs. Security Hitech Graphics Private Limited) making 5th, 6th and 7th schedule of Arbitration and Conciliation Act inapplicable to referred arbitration proceeding, thereby causing infraction of the provisions of Section 12 (1) and (2) of Arbitration and Conciliation Act, 1996.

2. The first and foremost challenge, raised by Mr. Kushal Chatterjee, learned advocate appearing for the petitioner, is that arbitrator after being appointed in connection with an arbitration proceeding, though may be under the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as the ‘M.S.M.E.D. Act’), the Arbitrator is under obligation to disclose his independence, or impartiality, as disclosed in Section 12(1) and (2) of the Arbitration and Conciliation Act, 1996 making sufficient disclosure as per 5th, 6th and 7th schedule of Arbitration and Conciliation Act 1996.

3. Mr. Chatterjee further submitted that mandatory requirement as to the independence and impartiality of an Arbitrator in a case, where impartiality of Arbitrator was doubted, could not be given a go-by on the simpliciter score that Arbitrator had been appointed by Delhi Arbitration Centre in aid of M.S.M.E.D. Act. While making elaboration of such issue, Mr. Chatterjee argued that disclosure of impartiality ought to have been made at the beginning in order to ensure independence and impartiality of the Arbitrator to the instant arbitration proceeding. Non-adherence to such mandatory provision, as disclosed in Section 12 of the Arbitration Act would render the appointment of Arbitrator illegal.

4. The reasonable apprehension of biasness on the part of Arbitrator, if there be any, allegedly suffered by opposite party to the arbitration proceeding, had been taken care of by the legislature upon incorporating Section 12 of the Arbitration Act, 1996, which compulsorily made an Arbitrator to disclose in writing mandatorily any circumstances creating doubt or impartiality on the part of Arbitrator to the instant arbitration proceedings, Mr. Chatterjee argued.

5. It was thus submitted by Mr. Chatterjee that disclosure of impartiality doing adherence to the 6th schedule in context with 5th and 7th schedule of the Arbitration Act could not be construed to be inapplicable in case of arbitration, conducted under M.S.M.E.D. Act.

6. Adverting to M.S.M.E.D. Act, 2006, Mr. Chatterjee further submitted that there had been no apparent contradiction of the provisions of M.S.M.E.D. Act with Arbitration and Conciliation Act, 1996. When provisions of M.S.M.E.D. Act was not in contrast with Section 12 of the Arbitration and Conciliation Act, the mandatory requirement, disclosed in Section 12, as per 6th schedule could not be disregarded holding the same to be inapplicable under M.S.M.E.D. Act.

7. Reliance was placed by Mr. Chatterjee on a decision reported in (2020) 2 SCC 445 delivered in the case of Uttarakhand Purv Sainik Kalyan Nigam Limited vs. Northern Coal Field Limited, to submit that preliminary objections, pertaining to the competence and impartiality of the Arbitrator, could be raised under Section 16 of the Arbitration and Conciliation Act, 1996, which should be decided by the Arbitrator himself doing adherence to Section 12 in aid of 6th schedule of Arbitration and Conciliation Act. It was thus emphatically submitted by Mr. Chatterjee that appointment of Arbitrator was subject to the declaration to be made by Arbitrator under Section 12 of the 1996 Act with respect to his independence and impartiality of the Arbitrator, and has ability to devote sufficient time to complete the arbitration within the specified period of time.

8. Reliance was further placed by Mr. Chatterjee on a decision reported in (2004) 3 SCC 447 delivered in the case of Secur Ind