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2007 Supreme(Del) 271

AIR 2007 DELHI 155
Dr. S. MUKUNDAKAM SHARMA, C.J. AND SANJIV KHANNA, J.
Dharam Prakash
Versus
Union of India and Anr.
W. P. No. 16003 of 2006
Decided On:- 8 -2 -2007.

Advocates Appeared:
V. K. Shali, for Petitioner; Vineet Malhotra, for Union of India, Dinesh Agnani, for MTNL.

The intention of the Arbitration and Conciliation Act, 1996 is to minimize judicial intervention and promote speedy disposal of arbitration proceedings.

Headnote:

Arbitration and Conciliation Act - Constitutional Validity - Section 13(4) and Section 34 - Summary of Acts and Sections: The court discussed the constitutional validity of Section 13(4) and Section 34 of the Arbitration and Conciliation Act, 1996, emphasizing the intention of the Act to lay emphasis on speedy disposal of arbitration proceedings and minimize judicial intervention. The court also referred to the case of Bharat Heavy Electricals Ltd. v. C. N. Garg, where it was held that absence of a provision for removal of an Arbitrator does not render the relevant statutory provision invalid or ultra vires the Constitution of India.

Fact of the Case:

The petitioner challenged the constitutional validity of the provisions of Section 13(4) and Section 34 of the Arbitration and Conciliation Act, 1996, and sought a direction to club causes of similar nature to be decided by the same Arbitrator.

Finding of the Court:

The court rejected the contention that the provisions of Section 13(3), (4) and (5) and Section 34 of the Act are ultra vires the Constitution of India, emphasizing the intention of the Act to minimize judicial intervention and promote speedy disposal of arbitration proceedings.

Issues: Constitutional validity of Section 13(4) and Section 34 of the Arbitration and Conciliation Act, 1996, and the appointment of one Arbitrator for different contracts.

Ratio Decidendi: The court held that the provisions of Section 13(4) and Section 34 are not ultra vires the Constitution of India, and emphasized the intention of the Act to minimize judicial intervention and promote speedy disposal of arbitration proceedings.

Final Decision: The writ petition was dismissed, and the parties were left to bear their own costs.

Judgement

Dr. MUKUNDAKAM SHARMA, C.J. :- By filing this petition, the petitioner has challenged the constitutional validity of the provisions of Section 13(4) and Section 34 of the Arbitration and Conciliation Act, 1996 as being violative of Articles 14 and 21 of the Constitution of India.

2. In the writ petition, the petitioner has incorporated an additional prayer for issuance of a direction to the respondents Nos. 1 and 2 to club the causes of similar nature to be decided by the same Arbitrator preferably by a retired Judge of this Court rather than giving these matters for adjudication to different Arbitrators. The writ petition is contested by both Union of India and Mahanagar Telephone Nigam Limited.

3. We have also heard the learned counsel appearing for the parties on the aforesaid pleas.

4. It is submitted on behalf of the petitioner that there are six different contracts and that the said contracts revolve similar issues of facts and law and, therefore, the said issue should have been referred to a sole Arbitrator instead of referring the same to different Arbitrators. The next submission of the counsel appearing for the petitioner was that the provisions of Section 13 and Section 34 are ultra vires to the Constitution of India. In order to buttress this contention, the counsel particularly referred to sub-section (4) of Section 13 and sub-section (5) of Section 13. According to the counsel, Section 13 does not provide for Court intervention during the arbitration proceeding in the event of a negative decision of the Arbitral Tribunal on a challenge to an Arbitrator. The submission was that even when there is a challenge to the appointment of an Arbitrator, in that event also the Arbitrator would continue the arbitral proceedings even in case of negative decision and that he would make an arbitral award and only thereafter the challenging party would be able to file an objection before a Court only as a regular action for setting aside the award as provided for under Section 34 of the Arbitration and Conciliation Act. Next submission was that even under Section 34 of the Act, no specific provision has been made to file an objection against an action of the aforesaid nature in the event of negative decision by the Arbitrator.

5. We have considered the aforesaid submission of the learned counsel for the petitioner. It is to be noted that the aforesaid Act is enacted mainly in the pattern of the Modern Law adopted by the United Nations Commission on International Trade law. The object and the reasons of the Act clearly indicate that the intention of the Act is to lay emphasis on speedy disposal of arbitration proceedings. The Act also seeks to minimise judicial intervention in the progress and completion of arbitration proceedings, which is crystal clear from a bare reading of Section 5 of the Act which provides that no judicial authority would intervene except where so provided in the Act. Consequently, the bar on Court interference on challenging the arbitral tribunal during the pendency of the arbitration proceeding was meant to minimise judicial intervention at that stage as any interference at that stage would be against the spirit with which the Act was enacted. Sub-section (5) of Section 13 of the Act lays down that challenging an arbitral award is permitted even on the grounds taken by the aggrieved party on which the challenge to the arbitral tribunal was made. There is no provision in the Act which would enable the Court to remove an Arbitrator during the arbitration proceedings. But, at the same time the party having grievance against an Arbitrator cannot be said to be without a remedy and the said remedy becomes available as soon as the arbitral award is made by the Arbitrator or the arbitral tribunal. A similar challenge to the provisions of Section 13 was made in the Delhi High Court in the case of Bharat Heavy Electricals Ltd. v. C. N. Garg, reported as 2001 (57) DRJ 154 (DB). In the said petition also two que






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