The main legal point established is the requirement to substantiate grounds for termination of the Arbitral Tribunal's mandate under Section 14 of the Arbitration & Conciliation (Amended) Act, 2015, and the importance of adherence to the arbitration fee structure as per the Fourth Schedule of the Act.

JUDGMENT

Neena Bansal Krishna, J.

1. The present petition under Section 14 of the Arbitration & Conciliation (Amended) Act, 2015 has been filed for termination of mandate of the Arbitral Tribunal.

2. The petitioner herein (who is the respondent in the arbitration proceedings) is the Ordnance Department (Indian Army) under the Ministry of Defence, Government of India. A Supply Order dated 30.05.2014 for procurement of Paint Qty. 42,180 amounting to Rs.1,06,19,923.49 was placed upon respondent No.1. However, respondent No.1 failed to submit the advance sample within time in terms of the Contract, leading to huge losses to the petitioner which was compelled to cancel the Supply Order. The Bank Guarantee of Rs.10,61,992/- submitted by respondent No.1, was forfeited. The Respondent No.1 challenged the forfeiture by way of Writ Petition before the High Court of Allahabad. However, vide Order dated 11.05.2017 the Writ Petition was dismissed with a liberty to the parties to invoke arbitration proceedings in terms of Arbitration Clause 3 contained in the Agreement between the parties.

3. The petitioner was supposed to choose the name of Arbitrator from the Panel of Arbitrators to work as Arbitrator on payment of fees decided by the Department. The name of Shri B.L. Chaudhary who was not on the Panel of Arbitrators, was chosen with the consent of both the parties. The learned Sole Arbitrator was Ex-Joint Secretary and Legal Advisor in Ministry of Law and Justice and had been holding various positions in Government of India and was last working as Advisor (Legal) in Ministry of Environment, Forest & Climate Change, Government of India.

4. The learned Arbitrator initiated arbitration proceedings by sending a Notice of hearing dated 17.10.2017 and conducted first hearing on 15.11.2017. Without clarifying or deciding the fee, the petitioner being a Government department was following its Department's Schedule which prescribed the Arbitrator's fees of Rs.5,000/- per hearing subject to a maximum ceiling of Rs.75,000/- to be shared equally between the parties. The Arbitrator was informed about the applicable Fee Schedule vide letter dated 05.12.2017. The amount of claim raised by Respondent No.1 was to the tune of Rs.1,02,75,100/-. A counter-claim was filed by the petitioner to the tune of Rs.17,99,80,575/-. After the filing of counter-claim, the Arbitrator vide Order dated 23.07.2018, raised a demand of Rs.1,00,000/- as arbitrator's fee subject to adjustment in the final bill. It is claimed that the learned Arbitrator without deciding the dispute of fee, continued the arbitration proceedings and also raised demands for the fee in accordance with Fourth Schedule of the Arbitration (Amendment) Act, 2015. The petitioner protested orally and was assured by the Tribunal that it need not worry and the matter would be amicably sorted out.

5. The amount of fee to be paid to the Arbitral Tribunal remained undecided and the petitioner was under the impression that the fee shall be payable as per fee structure of the Department.

6. It is claimed that the learned Arbitrator started impressing upon the Conducting Officer of the petitioner to help him get the maximum amount as his fee to which the Conducting Officer replied that it was not within his jurisdiction. Annoyed with the response of the Conducting Officer, the Arbitral Tribunal made false and frivolous complaints against him to the Director General of Ordnance Department, Ministry of Defence vide his letter dated 21.05.2018 alleging that the Conducting Officer did not remain present during the arbitral proceedings.

7. It is further asserted that the learned Tribunal failed to complete the proceedings within the stipulated period of one year. It orally impressed upon the Conducting Officer to give his consent for extension of time under Section 29A of the Act, to which the petitioner did not agree. Petitioner felt that the learned Arbitrator was acting in a biased manner and was favouring th