SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img



IN THE HIGH COURT OF DELHI
Vibhu Bakhru, J.
Delhi Tourism and Transportation Development Corporation - Appellant
Versus
Swadeshi Civil Infrastructure Pvt. Ltd. - Respondent
O.M.P. (T) (COMM.) 56 of 2021 and IA Nos. 7715 of 2021, 7716 of 2021, 7717 of 2021, 9049 of 2021 and 9050 of 2021
Decided On : 30-07-2021




Pre-award challenges to an arbitrator's mandate based on perceived bias are impermissible, and such concerns must be raised post-award under Section 34 of the Arbitration and Conciliation Act.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 12(2), 12(5), 13, 14(2), 23(3), and 29A - Challenge to the mandate of the Arbitrator based on alleged bias and hostility - The petitioner argued the Arbitrator displayed bias, making them de facto unable to perform their functions, while the respondent contested these allegations. Court reiterated that challenges to an Arbitrator's impartiality must typically occur post-award under Section 34, emphasizing that pre-award interventions are limited by Section 5 of A&C Act. (Paras 24, 25, 27, 30)

(B) Arbitral Proceedings - Judicial intervention restricted - Court stated interventions are impermissible unless the Arbitrator is deemed ineligible under the Act, and emphasized that grievances regarding proceedings should be addressed post-award. (Paras 27, 32)

Facts of the case:
The petitioner, DTTDC, sought to terminate the mandate of the Arbitrator citing bias amid ongoing arbitral proceedings concerning a construction contract with the respondent, after their previously appointed arbitrator was substituted. Disputes sparked claims of the respondent not adhering to proper procedures and introducing unauthorized documents, leading to a contentious arbitration process.

Findings of Court:
The court dismissed the petition, asserting that the alleged grievances regarding the Arbitrator's conduct could only be considered after an award is rendered, and highlighted that doubts of bias should not warrant preemptive interference.

Issues: Whether the Arbitrator's mandate should be terminated on grounds of perceived bias, and the permissibility of judicial intervention in ongoing arbitral proceedings.

Ratio Decidendi: The court maintained the position that challenges to an arbitrator's appointment based on perceived bias should await the award's issuance, inherently restricting pre-award judicial scrutiny. The court confirmed the foundational principle that strategic challenges must not disrupt arbitration processes before their natural conclusion.

Result: Petition dismissed.

JUDGMENT

[Hearing held through video conferencing]

Vibhu Bakhru, J. (ORAL)--Delhi Tourism and Transportation Development Corporation (DTTDC) (hereinafter `the petitioner') has filed the present petition under Section 14 (2) of the Arbitration and Conciliation Act, 1996 (hereinafter the `A&C Act'), inter alia, praying that the mandate of the learned Arbitrator, be terminated and further directions be issued for substitution of the learned Arbitrator by an independent and impartial Arbitrator.

2. The petitioner claims that the learned Arbitrator has displayed open bias in the conduct of arbitral proceedings and therefore, has rendered himself de facto and de jure unable to perform his functions as an Arbitrator.

3. The petitioner had awarded the Contract for construction of "Dilli Haat at Janakpuri, New Delhi (SH: - Civil, Water Supply, Sanitary Installation, Drainage, Development & Internal Electrical Installation Works etc.)" to the respondent. Certain disputes have arisen between the parties in respect of the said Contract. The respondent invoked the Arbitration Clause for adjudication of the said disputes. On 27.06.2017, the Chief Engineer of the petitioner appointed Sh. Om Prakash Bhatia, Former Additional Director General (Works Special), CPWD as the Sole Arbitrator.

4. The respondent challenged the appointment of Sh. Bhatia, by filing a petition under Section 14 and 15 of the A&C Act [OMP(T)(COMM) 58/2017 captioned M/s Swadeshi Civil Infrastructure Pvt. Ltd. v. Delhi Tourism & Transportation Development Corporation]. The said petition was disposed of by a consent order dated 21.02.2018 and Sh. A.K. Singhal, (Retired) Director General, CPWD was appointed as a Sole Arbitrator to adjudicate the disputes between the parties. This Court also clarified that the said appointment was subject to the learned Arbitrator making the necessary disclosure under Section 12 of the A&C Act and, not being ineligible under Section 12 (5) of the A&C Act.

5. On 07.03.2018, the learned Arbitrator issued notice to both the parties and directed the respondent (the claimant before the Arbitrator Tribunal) to file its Statement of Claim within a period of thirty days from receipt of the notice. It is not disputed that he furnished his consent and made the necessary disclosure, which did not indicate any justifiable grounds to doubt his independence or impartiality.

6. The petitioner contends that the attitude of the respondent towards the petitioner is hostile and it has adopted unfair tactics to influence the Arbitrator. It also claims that the respondent has advanced arguments on the basis of documents, which were not taken on record and copies of the same were not supplied to the petitioner.

7. On 18.07.2018, the parties jointly agreed to extend the mandate of the Arbitral Tribunal for a period of six months from 06.03.2019 to 06.09.2019.

8. The petitioner submitted its Statement of Defence on 30.08.2018. However, at the material time, the petitioner did not file any counter claims.

9. The respondent submitted its rejoinder. It is the petitioner's claim that in its rejoinder, the respondent sought to modify its claims and also introduced new documents for altering the claims as initially made. The petitioner has contested the same and submitted a sur- rejoinder to the rejoinder filed by the respondent.

10. The petitioner contends that during the course of hearings held before the Arbitral Tribunal, the counsel for the respondent had also sought to advance arguments, which were not supported by pleadings. It is stated that at the hearing held on 08.07.2019, learned counsel for the petitioner objected to the same and in view of the objections, learned counsel for the respondent stated that the respondent would file an application under Section 23(3) of the A&C Act for amending its Statement of Claims to supplement its claims.

11. It is contended on behalf of the petitioner that by an application under Section 23(3) of the A&C Ac

Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top