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2019 Supreme(Del) 1469
IN THE HIGH COURT OF DELHI
Navin Chawla, J.
G.S. Developers & Contractors Private Limited - Appellant
Vs.
Alpha Corp Development Private Limited And Another - Respondents
Original Miscellaneous Petition (T) (Comm) No. 54 of 2019, Interlocutory Application No. 8116 of 2019, 8117 of 2019
Decided On : 29-05-2019
Mohit Chaudhary, Adv., Kunal Sachdeva, Adv., Ayush Agrawal, Adv., Vikrant Singh, Adv., S.N. Samith, Adv., Debesh Panda, Adv., Mangesh, Adv., V.K. Verma, Adv., Praveen, Adv.
The Fourth Schedule to the Act is not binding on the Arbitrator, and the remedy for bias allegations is to await the Award and challenge it thereafter.
Headnote:
Arbitration - Termination of Arbitrator's Mandate - Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 - [Sections 14, 15, 29A] - The court discussed the fixation of fee by the Arbitrator, the petitioner's challenge, and the Arbitrator's order regarding fee structure. The court emphasized that the Fourth Schedule to the Act is not binding on the Arbitrator and upheld the Arbitrator's decision on fee structure.
Fact of the Case:
The petitioner filed a petition under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996, seeking termination of the mandate of the Sole Arbitrator and appointment of a Substitute Arbitrator due to issues related to the fixation of fee by the Arbitrator.
Finding of the Court:
The court found that the petitioner's challenge to the fixation of fee by the Arbitrator was not maintainable, and dismissed the petition with costs.
Issues: The issues involved the petitioner's challenge to the fixation of fee by the Arbitrator and the alleged bias of the Arbitrator.
Ratio Decidendi: The court held that the Fourth Schedule to the Act is not binding on the Arbitrator, and the petitioner's remedy, if alleging bias, is to await the Award and challenge it thereafter.
Final Decision: The petition was dismissed with costs quantified at Rs.25,000/- to be paid to the Delhi High Court Advocates Welfare Fund.
JUDGMENT :
Navin Chawla, J.
This petition has been filed by the petitioner under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') praying for termination of the mandate of the Sole Arbitrator and for appointment of a Substitute Arbitrator in his place.
2. The arbitration proceedings between the parties were earlier being conducted by the Arbitrator appointed by the respondent. The respondents unilaterally declared the mandate of the Arbitrator as terminated and thereafter proceeded to appoint another Arbitrator. This was challenged by the petitioner by way of a petition under Section 14 read with Section 29A of the Act, being OMP(T)(Comm.) No.24/2017.
3. This Court by an order dated 22.03.2017, with the consent of the parties, appointed the present Arbitrator.
4. The Arbitrator entered upon reference and issued a notice of preliminary hearing on 31.03.2017.
5. Admittedly, the arbitration proceedings are today at the stage of final arguments with the pleadings having been completed by both the parties and the witnesses having been examined.
6. The challenge of the petitioner in the present petition is basically confined to the fixation of fee by the Arbitrator. The Arbitrator had raised fee memos on particular fees charged per session to which the petitioner claims to have protested against and had requested for reduction of the fee.
7. It is the case of the petitioner that the Arbitrator agreed to charge his fee in accordance with the ceiling mentioned in the Fourth Schedule of the Act. The petitioner claims that this decision was taken by the Arbitrator in the proceedings held on 16.04.2018.
8. Counsel for the petitioner submits that in accordance with this understanding, the petitioner had addressed e-mails dated 24.04.2018 and 25.04.2018 to which the office of the Arbitrator replied vide e-mail dated 01.05.2018, clearly showing that this understanding of the petitioner had been duly accepted by the Arbitrator.
9. The counsel submits that the Arbitrator, however, on 15.01.2019 again raised an issue of re-determination of the fee stating that as the number of hearings has far exceeded the desired number, he was entitled to charge an additional fee. Though this was protested by the petitioner, the Arbitrator raised fresh memo of fee on 17.01.2019, reverting back to the fee charged per session.
10. By an order dated 15.02.2019, the Arbitrator called upon the respondents to pay this additional fee failing which action shall be taken under Sections 32 and 38 of the Act. The Arbitrator, further on 01.03.2019 closed the right of the petitioner to agitate its counter claims on account of non-payment of the additional fee. On 18.03.2019, the Arbitrator during the course of hearing even refused to look at the documents that had been annexed by the petitioner along with its counter claims.
11. The petitioner thereafter filed an application under Section 14 read with Section 15 of the Act, being OMP(T)(Comm.) No.33/2019. The same was, however, withdrawn, without prejudice to the rights and contentions of the petitioner and with liberty to first approach the Arbitrator seeking clarification as also making the request for reconsideration of the fee and for allowing the petitioner to agitate its counter claims.
12. The petitioner thereafter filed a fresh application on the same terms before the Arbitrator. However, in the submission of the petitioner, the Arbitrator was agitated on receiving this application and made certain derogatory verbal comments against the petitioner. Faced with this, the petitioner filed an application under Section 13(2) of the Act, before the Arbitrator vide letter dated 01.04.2019.
13. These applications have been disposed of by way of an order dated 18.04.2019, circulated by the Arbitrator to the parties on 15.05.2019.
14. Counsel for the petitioner submits that a reading of the order itself would show that the Arbitrator has an inherent bias against the petitioner for ha
