IN THE HIGH COURT OF DELHI AT NEW DELHI
Prateek Jalan, J.
Microsoft Corporation – Appellant
Versus
Zoai Founder – Respondent
O.M.P. (COMM) 188 of 2019 & I.A. 6764 of 2019
Decided On : 03-07-2023
Arbitration - Domain Name Dispute - Arbitration and Conciliation Act, 1996 - Section 34 - INDRP - [BIAS] - [RELIANCE ON OWN RESEARCH] - [Challenged Sections: Section 34(2)(a)(iii) of the Act] - The court found that the arbitrator's inclusion of his own name in a 'Hall of Fame' based on his decisions against complainants gave rise to a justifiable apprehension of bias. The court also held that the arbitrator's reliance on independent research without giving the party an opportunity to be heard violated the principles of fairness and the party's right to be heard.
Fact of the Case:
The petitioner, an entity incorporated outside India, challenged an award rendered by a sole Arbitrator under the INDRP, which declined the petitioner's claim for transfer of a disputed domain name. The petitioner claimed bias on the part of the arbitrator and challenged the reliance on the arbitrator's independent research without giving the petitioner an opportunity to be heard.
Finding of the Court:
The court found that the arbitrator's inclusion of his own name in a 'Hall of Fame' based on his decisions against complainants gave rise to a justifiable apprehension of bias. The court also held that the arbitrator's reliance on independent research without giving the party an opportunity to be heard violated the principles of fairness and the party's right to be heard.
Issues: The issues involved bias on the part of the arbitrator and the reliance on the arbitrator's independent research without giving the party an opportunity to be heard.
Ratio Decidendi: The court emphasized the inviolable requirement of independence and impartiality in arbitral decision making and held that claims of bias must be carefully scrutinized to avoid misuse. The court also held that an arbitrator should not rely upon evidence gathered without giving the affected party an opportunity to be heard, as it violates the principles of fairness and the right to be heard.
Final Decision: The petition was allowed, and the award of the arbitrator was set aside. The petitioner was granted the liberty to invoke arbitration afresh for adjudication of the same claims, in accordance with the law, if it is so advised.
JUDGMENT
1. By way of this petition under Section 34 of the Arbitration and Conciliation Act, 1996 ["the Act"], the petitioner challenges an award dated 18.02.2019, rendered by a learned sole Arbitrator under the ".IN Domain Name Dispute Resolution Policy" [hereinafter referred to as "the INDRP"]. By the impugned award, the learned Arbitrator has declined the petitioner's claim for transfer of the disputed domain name-https://zoai.in/by the respondent to it.
A. Facts:
2. The petitioner claims to have diverse products and services, including computer software, computer services, devices, and other technological solutions, for which it is the owner of various trademarks, including the trademark "Zo". It claims to have launched an artificial intelligence chatbot in December, 2016, named "Zo".
3. The petitioner, therefore, made a complaint before the National Internet Exchange of India [hereinafter referred to as "NIXI"] against the registration of the disputed domain name by the respondent. The dispute was to be resolved by an arbitrator appointed by NIXI, in terms of the INDRP. By a communication of the NIXI dated 31.12.2018, Mr. Ankur Raheja was appointed as the Arbitrator to adjudicate disputes relating to the disputed domain name https://zoai.in/.
4. The respondent did not enter appearance in the arbitral proceedings, and was set ex-parte by the order of the learned Arbitrator dated 24.01.2019. The impugned award records that no personal hearing was requested or held.
5. The learned Arbitrator thereafter made the impugned award, rejecting the petitioner's claims.
B. Submissions of learned counsel for the parties:
6. At the outset, Mr. Ashim Sood, learned counsel for the petitioner, accepted that the present arbitral proceedings constitute an "International Commercial Arbitration"1[As defined under Section 2(1)(f) of the Act.] , as the petitioner is an entity incorporated outside India. He, therefore, proceeded on the basis that the ground of patent illegality, available under Section 34(2A) of the Act, is not available to the petitioner. He, however, urged the following arguments in support of his contention that the impugned award is liable to be set aside on the grounds enumerated in Section 34(2) of the Act:
A. Mr. Sood submitted that the impugned award is vitiated by bias on the part of the learned Arbitrator, for which purpose he referred to a web page entitled "Hall of Fame" on the website www.indrp.com2[Refer page No. 368 of the petitioner's list of documents.] . Mr. Sood submitted that the aforesaid web page has, in fact, been established, and is maintained by the learned Arbitrator. He drew my attention to the fact that the name of the learned Arbitrator himself appears in the "Hall of Fame" in the category of "Arbitrators who have denied most INDRP complaints: 4(four)" [Ibid]. According to Mr. Sood, such a comment by the learned Arbitrator shows a distinct predisposition to deny INDRP complaints, such as the one made by the petitioner. In support of this submission, Mr. Sood cited the judgments of the Supreme Court in State of West Bengal and Others vs. Shivananda Pathak and Others, (1998) 5 SCC 513 and Voestalpine Schienen GmbH vs. Delhi Metro Rail Corporation Limited, (2017) 4 SCC 665.
B. Mr. Sood referred to paragraphs 7(ii)(E), 7(ii)(F) and 7(ii)(H) of the impugned award to submit that the learned Arbitrator had undertaken independent research, both on factual and legal aspects, to meet the case made out by the petitioner, even in the absence of the respondent. He submitted that these materials were never put to the petitioner, which rendered it effectively unable to present its case, contrary to Section 34(2)(a)(iii) of the Act. On this aspect, Mr. Sood placed reliance upon the judgment of the Supreme Court in Ssangyong Engineering and Construction Company Limited vs. National Highways Authority of India (NHAI), (2019) 15 SCC 131, the judgment of a Division Bench of the Madras High Court in M/s. Tribol Engine
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