The judgment established the interpretation of the provisions related to the ineligibility of an Arbitrator based on the financial interest of a close family member and the impact of voluntary recusal in another proceeding on the present arbitration proceedings.

JUDGMENT

J.R. Midha, J. - The petitioner is seeking removal/termination of the mandate of the Presiding Arbitrator under Sections 14 and 15 of the Arbitration and Conciliation Act.

2. The petitioner and the respondent entered into an agreement dated 03rd March, 2009 relating to Kashang Hydroelectric Project in Kinnaur District of Himachal Pradesh (hereinafter referred to as "Kashang Project") which contains an arbitration clause.

3. Disputes arose between the parties with respect to the respondent''s claim for extension of time for delays/disruptions in the project and additional costs/losses for the period 01st July, 2014 to 31st March, 2016 whereupon both the parties appointed one Arbitrator each in terms of arbitration agreement. On 04th March, 2019, the two Arbitrators unanimously appointed the former Chief Justice of Andhra Pradesh High Court as the Presiding Arbitrator.

4. The Presiding Arbitrator gave the declaration in terms of the Sixth Schedule read with Section 12 (1) of the Arbitration and Conciliation Act and the first sitting of the Arbitral Tribunal was held on 05th April, 2019 when the procedure for the arbitral proceedings was finalized; directions were issued to the parties to complete their pleadings and the arbitration proceedings were fixed on 19th July, 2019. The parties have completed the pleadings in terms of the order dated 05th April, 2019.

5. Vide email dated 18th July, 2019, the petitioner requested the Presiding Arbitrator to recuse from the arbitration proceedings on the ground that the Presiding Arbitrator recused himself in another arbitration proceedings between the parties relating to Sainj Hydroelectric Project in Kullu District of Himachal Pradesh (hereinafter referred to as "Sainj Project") arising out of a separate contract dated 02nd August, 2010.

6. Vide order dated 19th July, 2019, the Presiding Arbitrator rejected the petitioner''s request for recusal on the ground that there is no bar under the Arbitration and Conciliation Act for him to continue in the matter. Relevant portion of the order dated 19th July, 2019 is reproduced hereunder:-

"1. On 18.07.2019, an email was received by the Presiding Arbitrator from the Respondent, copy of which was also marked to the two co-Arbitrator s as well as to the Claimant stating that the Presiding Arbitrator vide his email dated 15.07.2019 has already recused himself as Presiding Arbitrator in another matter, namely, "Third Arbitration between M/s. HCC Limited and HPPCL" relating to the Contract Agreement with respect to Sainj Hydro Electric Project located in Kullu District, therefore, the parties being same the Management of HPPCL has concluded that a request be made to the Presiding Arbitrator to withdraw himself from the present proceedings.

2. The Tribunal has asked Ld. Counsel for the Respondent to point out any provision under the Arbitration and Conciliation Act, 1996 under which the Presiding Arbitrator is debarred from continuing to act as the Presiding Arbitrator . He has not been able to point out any provision but states that decision has been taken by the Management of the Respondent in view of the Presiding Arbitrator having recused in another arbitration matter between the parties.

3. Since there is no provision under the Act, there is no bar in the Presiding Arbitrator continuing in this Tribunal. However, in order to keep the record straight, the Presiding Arbitrator by separate order will communicate the circumstances of recusing himself in another matter."

(Emphasis Supplied)

7. On 19th July, 2019, the Presiding Arbitrator passed a separate order relating to the circumstances for recusing in the arbitration proceedings relating to Sainj Project. The learned Presiding Arbitrator recorded that his younger brother had appeared as a senior counsel on behalf of the respondent before Himachal Pradesh High Court in proceedings under Section 9 of the Arbitration and Conciliation Act. Although there was no bar in the continuation of the