IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, J.
Sacheerome Advanced - Appellant
Versus
NEC Technologies Pvt. Ltd. (neci) - Respondent
O.M.P. (T) (COMM) 34/2022
Decided On : 29-03-2022
Arbitration and Conciliation Act - Appointment of Arbitrator - Sections 14(2), 21, 11, 12(1), 13, 15, 34 - The court discussed the provisions of the Arbitration and Conciliation Act, 1996, particularly focusing on the appointment of the Arbitrator, challenges to the appointment, and the procedure for raising objections. The court emphasized that challenges to the appointment of an arbitrator should be made in accordance with the procedure set out in Section 13 of the A&C Act and that a petition under Section 14(1) cannot be filed to challenge the appointment of the Arbitral Tribunal on grounds as set out under Section 12(3) of the A&C Act. The court also highlighted the need to await the arbitral award and take recourse to the provisions under Section 34 of the A&C Act if aggrieved. The judgment referenced case law and legislative intent to support its interpretation of the legal framework.
Fact of the Case:
The petitioner filed a petition under Section 14(2) of the Arbitration and Conciliation Act, 1996, seeking termination of the mandate of the learned Sole Arbitrator. The disputes arose from an agreement dated 11.06.2019, and the petitioner had previously filed a petition seeking appointment of an Arbitrator. The petitioner challenged the conduct of the Arbitral Tribunal and the appointment of the learned Arbitrator, alleging bias and inordinate delay in conducting the arbitral proceedings.
Finding of the Court:
The court found that the petitioner's challenge to the appointment of the learned Arbitrator under Section 14(1) of the A&C Act was unmerited and not maintainable. It emphasized the need to follow the procedure set out in Section 13 of the A&C Act for challenging the appointment of an arbitrator. The court also dismissed the contention that the Arbitral Tribunal had not acted with due dispatch, highlighting the mitigating circumstances resulting from the outbreak of Covid-19.
Issues: The issues involved the challenge to the appointment of the Arbitral Tribunal, alleged bias and inordinate delay in conducting the arbitral proceedings, and the applicability of the provisions of the A&C Act.
Ratio Decidendi: The court's decision was based on the interpretation of the provisions of the Arbitration and Conciliation Act, particularly emphasizing the procedure for challenging the appointment of an arbitrator and the need to await the arbitral award before raising objections.
Final Decision: The court dismissed the petition with costs quantified at Rs. 25,000/-, clarifying that the parties could raise contentions before the Arbitral Tribunal or before the court under Section 34 of the A&C Act after the Arbitral Award has been rendered.
ORDER
Vibhu Bakhru, J. (Oral). - The petitioner has filed the present petition under Section 14 (2) of the Arbitration and Conciliation Act, 1996 (hereafter 'the A&C Act'), inter alia, praying that the mandate of the learned Sole Arbitrator be terminated.
2. The disputes between the parties have arisen in the context of an agreement dated 11.06.2019 (the Agreement). On 08.10.2020, the petitioner had issued a notice under Section 21 of the A&C Act, invoking the Arbitration Agreement and called upon the respondent to concur on appointment of an arbitrator. The respondent rejected the said request. Consequently, the petitioner filed a petition under Section 11 of the A&C Act [being ARB. P. 702/2020] seeking appointment of an Arbitrator.
3. The said petition was allowed by an order dated 04.12.2020 and Sh Rajiv Bansal, Senior Advocate (since deceased) was appointed as the Sole Arbitrator to adjudicate the disputes between the parties.
4. The learned Arbitrator expired on 17.05.2021. In the circumstances, the petitioner filed a petition before this Court under Section 14(1)(a) read with Section 15 of the A& C Act being OMP (T) (COMM) 74/2021. This Court disposed of the said petition by an order dated 09.08.2021 and appointed Ms Radhika Biswajit Dubey, Advocate as the Sole Arbitrator to adjudicate the disputes between the parties.
5. The petitioner is aggrieved by the manner in which the Arbitral Tribunal has conducted the arbitral proceedings. It is also averred in the present petition that the learned Arbitrator did not make the complete disclosure as required under Section 12(1) of the A&C Act at the time of accepting her appointment. She had, however, subsequently disclosed that she had worked as a junior to one of the senior counsels appearing for the petitioner. She had also worked with a law firm, which had subsequently split. After the split she thereafter, was associated with one of the resultant firms as a partner (not the firm representing the respondent). The other resultant firm is representing the respondent.
6. Ms Luthra, learned senior counsel appearing for the petitioner states that the petitioner had not challenged the appointment of the learned Arbitrator and had participated in the arbitral proceedings; however, the learned Arbitrator's inclinations were revealed subsequently.
7. It is important to note that the learned Arbitrator had made full disclosure at the first preliminary hearing held on 26.08.2021. This was prior to the learned Arbitrator receiving the Arbitral record. She had also recorded that none of the circumstances as disclosed fall foul of the Fifth or the Seventh Schedule to the A&C Act. Nonetheless she had made the disclosure for the comfort of the parties. Admittedly, the petitioner did not express any reservations and participated in the arbitral proceedings. However, in the present petition it is averred that the learned Arbitrator's "direct and indirect" contact and connection with the Law firms, have created a reasonable apprehension as to the independence and impartiality of the learned Arbitrator.
8. There is no dispute that the circumstances as disclosed by the learned Arbitrator do not fall within the scope of the Fifth Schedule of the A&C Act. Concededly, the petitioner had accepted the disclosure and had unreservedly participated in the arbitral proceedings.
9. Although Ms Luthra, learned Senior Counsel appearing for the petitioner had referred to the disclosure made by the learned Arbitrator to suggest an apprehension of bias, she did not press the same. She has confined the challenge to the appointment of the Arbitral Tribunal ontwo grounds. First, she submitted that the conduct of the Arbitral Tribunal does not inspire confidence. She stated that the Arbitral Tribunal had also found the petitioner (Claimant before the Arbitral Tribunal) guilty of inordinate delays and had also imposed costs, even though the alleged delays had occurred prior to the appointment of the learned Arbitrator. She
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