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2011 Supreme(Del) 381

IN THE HIGH COURT OF DELHI
Vikramajit Sen and Siddharth Mridul, JJ.
Appellants: Progressive Career Academy Pvt. Ltd.
Vs.
Respondent: FIIT JEE Ltd.
OMP No. 297/2006, FAO (OS) Nos. 128 and 129 of 2008, FAO (OS) No. 334/2009, CM Nos. 11087, 11089 of 2009, 22580-81/2010 and FAO (OS) No. 525/2010
Decided On: 16.05.2011

Advocates appeared:
For Appellant/Petitioner/Plaintiff: S.K. Maniktala, V.M. Chauhan, Advs. in OMP No. 297/2006, P.V. Kapur, Sr. Adv., Anil Airi, Ekta Kalra Sikri, Sadhana Sharma, Advs. in FAO (OS) No. 128/2008, FAO (OS) No. 129/2008, Deepak Bhattacharya, Rajesh Kumar, Mithlesh Kumar, Advs. in FAO (OS) No. 334/2009 and CM Nos. 11087/2009, 11089/2009 and 22580-81/2010 and Vikas Mahajan, Adv. in FAO (OS) No. 525/2010
For Respondents/Defendant: T.K. Pradhan, Adv. in OMP No. 297/2006, Anil Sapra, Sr. Adv., Rajendra Singvi, Sanjay Abbot, Advs. in FAO (OS) No. 128/2008, FAO (OS) No. 129/2008, Vijay K. Mehta, S.S. Parashar, Advs. in FAO (OS) No. 334/2009 and CM Nos. 11087/2009, 11089/2009 and 22580-81/2010

The main legal point established in the judgment is that the A&C Act does not allow curial interference at the pre-Award stage on the allegations of bias or impartiality of the Arbitral Tribunal.

Headnote:

Arbitrator Removal - Legal Proprietary of Judicial Directions - Arbitration & Conciliation Act, 1996 (A&C Act) - Sections 34, 37 - The court discussed the legal propriety of judicial directions for the removal of an arbitrator before the publishing of an Award. The court analyzed several judgments and concluded that the Appeals were not maintainable due to the provisions of the A&C Act.

Fact of the Case:

The court addressed the legal propriety of judicial directions for the removal of an arbitrator before the publishing of an Award. It discussed the maintainability of the Appeals and cited various judgments to analyze the existence of a polarity of opinion on the issue.

Finding of the Court:

The court found that the Appeals were not maintainable due to the provisions of the A&C Act, which did not allow curial interference at the pre-Award stage on the allegations of bias or impartiality of the Arbitral Tribunal.

Issues: The main issue concerned the legal propriety of judicial directions for the removal of an arbitrator before the publishing of an Award and the maintainability of the Appeals under the A&C Act.

Ratio Decidendi: The court's decision was based on the provisions of the A&C Act, which did not allow curial interference at the pre-Award stage on the allegations of bias or impartiality of the Arbitral Tribunal.

Final Decision: The court concluded that the Appeals were not maintainable and refrained from imposing costs. It also reiterated that the statute does not postulate judicial interference in arbitral proceedings till the Award is published, whereupon Objections can be raised on the platform of the alleged bias of the Tribunal.

JUDGMENT

Vikramajit Sen, J.

1. The question in this bunch of Appeals concerns the legal proprietary of judicial directions for the removal of an arbitrator even before the publishing of an Award. Several judgments of our esteemed Single Benches have been cited before us, a perusal of which manifests the existence of a polarity of opinion. On one side of the watershed is the view that assertions as to the de jure or de facto incompetence of the Arbitral Tribunal must immediately be addressed by the Court, and in deserving cases remedied, whilst on the other side is the contrary view that the statutorily provided procedure postulates an immediate remonstration but a deferred assailment of the Award, inter alia on this ground, by way of an invocation of Section 34 of the Arbitration & Conciliation Act, 1996 (A&C Act for short).

2. At the threshold, an objection has been lodged to the maintainability of the Appeals on the ground that Section 37 of the A&C Act provides for such remedy only against orders (a) granting or refusing to grant any measure under Section 9 or (b) setting aside or refusing to set aside an arbitral award under Section 34 of the A&C Act. In Cref Finance Ltd. v. Puri Construction Ltd., AIR 2001 Delhi 414 the controversy which had arisen before this Court concerned the competency of a Second Appeal; and the Division Bench held that it was forbidden in terms of Section 37(3) of the A&C Act. We are mindful that this aspect of law does not directly arise before us. However, it is a worthy preface to our analysis inasmuch as it records the non-availability of Letters Patent even in these circumstances. The Division Bench, inter alia, took note of the Five-Judge Bench decision in Union of India v. A.S. Dhupia, AIR 1972 Delhi 108 which pithily provides a perspicuous perusal of the annals of the establishment of the Delhi High Court. The Division Bench also observed that Shah Babulal Khimji v. Jayaben, AIR 1981 SC 1786 was distinguishable for the simple reason that their Lordships were not concerned with the maintainability of an Appeal against the Order/Judgment of a Single Bench of the Delhi High Court exercising original jurisdiction.

3. In Dharam Prakash v. Union of India, 138 (2007) DLT 118 (DB), 2007(1) Arb. LR 308(Del.) (DB), the challenge was laid to the vires of Section 13 of the A&C Act which was repelled because of the existence of a remedy via filing of Objections under Section 34 of the A&C Act. The said Bench applied the previous enunciation of the law in Bharat Heavy Electricals Ltd. v. C.N. Garg, 88 (2000) DLT 242(DB). Yet another Division Bench of this Court in Canbank Financial Services Ltd. v. Haryana Petrochemicals Ltd., 2008(2)Arb.LR 365 Del (DB) had concluded that a challenge concerning controversies raised in a plaint/suit was not maintainable in view of Section 37 of the A&C Act. This decision was applied in Tandav Films Entertainment Pvt. Ltd. v.Four Frames Pictures, 2010(1) Arb. LR 79 Del DB), albeit in that case, it was Section 8 of the A&C Act which was at the fulcrum of the controversy. The abiding bedrock of these decisions remains Union of India v. Mohindra Supply Co., [1962] 3 SCR 497 which reiterates that the right of appeal is essentially a creature of a statute; ergo a litigant does not possess an inherent right to appeal. Accordingly, Section 39 of the repealed Arbitration Act, 1940 which had provided for a limited scope of appeal before the appellate Court, superseded the provisions of Letters Patent. This opinion is evident from a perusal of the following paragraphs:

16. There is in the Arbitration Act no provision similar to Section 4 of the Code of Civil Procedure which preserves powers reserved to courts under special statutes. There is also nothing in the expression's authorised by law to hear appeals from original decrees of the Court's contained in Section 39(1) of the Arbitration Act which by implication reserves the jurisdiction under the Letters Patent to entertain an appeal a







































































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