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2011 Supreme(Del) 488
IN THE HIGH COURT OF DELHI
Vipin Sanghi, J.
Appellants: Bhupender Lal Ghai
Vs.
Respondent: Crown Buildtech Private Limited D+
Arb. P. 470 and 471/2009
Decided On: 14.07.2011
For Appellant/Petitioner/Plaintiff: D.S. Chadha, Adv.
For Respondents/Defendant: Sunil Narula, Adv.
Allegations of bias must be substantiated with evidence and cannot be based on baseless claims.
Headnote:
Arbitration - Allegations of Bias - Section 13 of the Act - [Arbitration, Allegations of Bias] - [Section 13 of the Act] - The court examined the allegations of bias against the learned Arbitrator and found them to be baseless and unsubstantiated. The court directed the parties to pay the fees of the learned Arbitrator and appointed a new Arbitrator to conclude the arbitration proceedings.
Fact of the Case:
The parties entered into two contracts containing arbitration agreements. Disputes arose, and the Petitioner initiated arbitration proceedings. The Respondent sought to withdraw consent and alleged bias against the learned Arbitrator.
Finding of the Court:
The court found the allegations of bias to be baseless and unsubstantiated. The court directed the parties to pay the fees of the learned Arbitrator and appointed a new Arbitrator to conclude the arbitration proceedings.
Issues: Allegations of bias against the learned Arbitrator, withdrawal of consent by the Respondent, and appointment of a new Arbitrator.
Ratio Decidendi: The court held that the allegations of bias were baseless and unsubstantiated, and directed the parties to pay the fees of the learned Arbitrator. The court also appointed a new Arbitrator to conclude the arbitration proceedings.
Final Decision: The court directed the parties to pay the fees of the learned Arbitrator and appointed a new Arbitrator to conclude the arbitration proceedings.
Vipin Sanghi, J.
I.A. Nos. 5824/2011 & 8248/2011 in Arb. P. No. 470/2009 AND I.A. Nos. 5823/2011 & 8249/2011 in Arb. P. No. 471/2009
1. The applications, i.e. I.A. No. 5824/2011 and I.A. No. 5823/2011 had been jointly filed by the parties, duly signed by the parties and their respective counsels and also supported by the affidavits of the Petitioner and Mr. Surendra Vasudeva, authorized representative of the Respondent, with the prayer that the Court may allow the payment of additional fee to the learned sole Arbitrator in accordance with the Delhi High Court Arbitration Centre (Arbitrators Fees) Rules to be shared equally, after deducting the amount of Rs. 2 lacs, which was the lump sum fee fixed by the court in two cases, including the present. The need for hearing detailed submissions of the learned Counsel and for passing this order has arisen, as the Respondent has sought to withdraw its consent and sought to allege bias against the learned Arbitrator.
2. The parties entered into two contacts dated 23.02.2007 which contain arbitration agreements in clauses 43 and 37 respectively. The arbitration agreements provide for resolution of the disputes arising out of the respective agreements through a Sole Arbitrator. As disputes arose between the parties, the two arbitration agreements were invoked by the Petitioner. Since the parties could not agree on the name of the sole Arbitrator in terms of the arbitration agreements in two agreements in question, the Petitioner preferred Arb. Pet. No. 470/2009 and Arb. Pet. No. 471/2009 in this Court, which were disposed of by the Court on 15.02.2010 appointing Mr. Justice Ajit Prakash Shah, retired Chief Justice of this Court as the sole Arbitrator. The Court fixed consolidated lumpsum fee of Rs. 2 lacs in both the cases.
3. The proceedings in the two cases started before the learned Arbitrator. It appears that extensive evidence was recorded before him, which was partially common and partially distinct.
4. On 14.01.2011, the parties appeared before the learned Arbitrator and agreed that the Arbitrator be paid his fee in accordance with the Delhi High Court Arbitration Centre (Arbitrators fees) Rules, after deducting the amount of Rs. 2 lacs already paid to him. After the passing of the said order, the Petitioner approached the Delhi High Court Arbitration Centre, communicating to the centre the said order, and requesting them to inform as to what is the balance fee to be paid by each of the parties.
5. On 07.02.2011, the Delhi High Court Arbitration Centre communicated to the Petitioner its view that since the fee had been fixed by this Court by a judicial order, the same could be modified only by the Court and could not be modified by the Arbitration Centre in its administrative capacity. It is only thereafter that the present applications i.e. I.A. No. 5824/2011 and I.A. No. 5823/2011 were preferred, as aforesaid.
6. These applications came up before the Court on 08.04.2011. On the said date, counsel for the Respondent stated that the Respondent was not willing to pay any additional fee to the learned Arbitrator. The Court observed that the said statement was contrary to the joint application moved by the parties. Consequently, the counsel for the Respondent Mr. Sunil Narula as well as the Respondent, Mr. Surendra Vasudeva were required to remain present in Court.
7. These applications were adjourned from time to time, and no substantive orders were passed by the Court on these applications. In the meantime, the Respondent moved an application under Section 13 of the Act before the arbitral tribunal on 18.04.2011 making allegations of personal bias against the learned Arbitrator. By this stage, the trial before the learned Arbitrator stood completed, and the learned Arbitrator had fixed 5th and 6th May, 2011 for hearing arguments in the two matters.
8. The premise on which the application under Section 13 was filed was that the Respondent's counsel had sent a communication to the Resp
