IN THE HIGH COURT OF DELHI
Vibhu Bakhru, J.
Sacheerome Advanced Technologies - Appellant
Versus
NEC Technologies Pvt. Ltd. (NECI) - Respondent
O.M.P. (T) (COMM) 34 of 2022
Decided On : 29-03-2022
| Table of Content |
|---|
| 1. factual background regarding arbitration initiation. (Para 1 , 2 , 3 , 4) |
| 2. petitioner's concerns over the arbitrator's bias and delays. (Para 5 , 6 , 9 , 10 , 11) |
| 3. arbitrator's disclosure and lack of bias. (Para 7 , 8 , 12) |
| 4. procedural requirements for challenging arbitrator's appointment. (Para 13 , 14 , 16 , 17) |
| 5. arbitrator's due dispatch during proceedings. (Para 18 , 26) |
| 6. conclusion - petition dismissed with costs. (Para 27 , 28) |
JUDGMENT
Vibhu Bakhru, J. (ORAL)
1. 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 appr
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.
Arbitration - Time limit for arbitral award - A petition under Section 29A of Act cannot be permitted to be used by one of parties to seek substitution of an arbitrator merely on basis of its unsubst....
The main legal point established in the judgment is that the grounds for termination of an arbitrator's mandate must satisfy the circumstances laid down under the Act and the precedents set by the Ho....
The court established that an arbitrator appointed by an ineligible individual cannot act, and waivers of objections regarding ineligibility must be expressed in writing, not inferred by conduct.
The challenge for the appointment of Arbitrator under Section 13 of the Act can only be made along with the final award under Section 34.
Unilateral appointment of an Arbitrator without consent violates procedural fairness under the Arbitration and Conciliation Act, leading to the termination of the mandate.
The court held that failure to disclose prior relationships with a party renders an arbitrator ineligible, thus invalidating the arbitral award under the Arbitration and Conciliation Act.
The appointment of an arbitrator must comply with Section 12(5) of the Arbitration & Conciliation Act, ensuring independence and impartiality, regardless of when the arbitration proceedings were init....
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