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2015 Supreme(Del) 211
High Court of Delhi
DEEPA SHARMA, J.
Mukesh Aggarwal – Petitioner
Versus
Atul Gupta & Another – Respondent
O.M.P. No. 984 of 2014
Decided On : 14-01-2015
For the Petitioner:P.R. Agarwal, Mahendra, Y.R. Sharma, Anju Bhushan, Laxman Singh, Advocates.
For the Respondents:R1, Vijay Tandon, R2, Varsha Ahluwalia, Advocates.
The judgment establishes that suspicions of an arbitrator's partiality or lack of independence do not automatically lead to the termination of the arbitrator's mandate, and the appropriate remedy lies under Section 13 of the Arbitration and Conciliation Act.
Headnote:
Arbitration - Termination of Arbitrator's Mandate - Arbitration and Conciliation Act - Section 14
Fact of the Case:
The petitioner filed a petition under Section 14 of the Arbitration and Conciliation Act to terminate the mandate of the arbitrator, alleging bias and prejudice. The respondent denied the contentions, and the court heard arguments and perused the record.
Finding of the Court:
The court found that the petitioner failed to show that the mandate of the arbitrator had become de jure and therefore could not be dismissed. The challenge to the continuation of the arbitrator was based on the ground of her independence and impartiality, falling under Section 12 of the Act. The court noted that the arbitrator's actions were in line with legal provisions.
Issues: The issues revolved around the termination of the arbitrator's mandate based on allegations of bias and prejudice, and the legal grounds for challenging the arbitrator's independence and impartiality.
Ratio Decidendi: The court emphasized that the petitioner's remedy lay under Section 13 of the Act, and the arbitrator's actions were in accordance with legal provisions. It was noted that the law did not provide for the termination of the arbitrator's mandate solely based on suspicions of partiality or independence.
Final Decision: The petition was found to have no merit and was dismissed with no order as to costs.
1. The present petition has been filed under Section 14 of the Arbitration and Conciliation Act (hereinafter referred to as ‘the Act’) for terminating the mandate of the arbitrator on the grounds that the claimant/respondent no.1 Atul Gupta is an advocate and visiting the court complex in the Karkardooma Court, Delhi where the respondent no.2 i.e. the arbitrator is a practising lawyer. The respondent no.1/the claimant and the arbitration/respondent no.2 are therefore colleagues. That the petitioner has also observed during the hearing attended by his counsel Mr.Mahendra Singh, Advocate on 05.04.2014, 10.05.2014, 19.05, 2014, 24.05.2014, 31.05.2014 and 30.06.2014 that the arbitrator used to call Sh.Atul Gupta/the claimant as “Are Atul sit by my side” while there was no sitting arrangement for his advocate Mr.Mahendra Singh. The relationship between them is very informal. The arbitrator/respondent no.2 is nominee of respondent no.1/the claimant. It is submitted that though the claimant is not actively practicing as an advocate but he is an advocate in Karkardooma Court. The arbitrator had not been supplying copy of the various documents and orders and supplied only on a formal application. The petitioner had paid a fee of Rs.1 lakh to the arbitrator while the respondent no.2/the claimant has not paid any fee. The various orders passed by the arbitrator would show that she is biased/prejudiced against the petitioner and had also threatened to close the defence of the petitioner and also imposed heavy cost of Rs.10,000/-. The respondent no.1 is supplying the legal matters i.e. challan etc. to the arbitrator which is adding in her additional income. It is also contended that as per the settled principle of law if the arbitrator or a judge is prejudiced towards one party, then he should not try that case because no man shall be a judge in his own cause. It is further contended that the petitioner had never approached the arbitrator with any ulterior motive. It is submitted that an application had been moved before the arbitrator requesting her to recuse from the matter on these grounds but she dismissed the said application of the petitioner and had made certain observations which were false. It is submitted that the observation made by the arbitrator that she had been approached by the petitioner for giving benefits to him, is false observation. It is submitted that an observation that the petitioner is adopting delaying tactics is also a false observation. It is submitted that the respondent no.2 is biased and he has lost faith in her and therefore her mandate be terminated as she has become de jure and some other person be appointed as an arbitrator.
2. The reply has been filed by the respondents to the application in which all these contentions have been denied. It submitted that the present petition is not maintainable and is liable to be dismissed. Rejoinder is also filed by the petitioner reiterating the contentions of the petition.
3. I have heard arguments and perused the record.
4. Admittedly, there exists a contractual agreement between the petitioner and the respondent no.1 which contained an arbitration clause. Pursuant to the arbitration clause the respondent no.1 appointed the respondent no.2 as an arbitrator. She had held several hearings in which the petitioner through his counsel has participated. During the hearings, the petitioner had moved an application before the arbitrator whereby he had requested the arbitrator to recuse herself on the same ground as mentioned in this petition. The arbitrator after hearing the parties disposed of the said application of the petitioner vide her order dated 30.07.2014. This petition seems to be an appeal against said order of the arbitrator as the present petition is on same ground on which recusal of arbitrator was sought.
5. The present petition under Section 14 of the Act has been filed on the ground that the mandate of the arbitrator has become de jure, so be termi
