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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




Arbitral Tribunal challenges must follow Section 13's procedures; courts cannot intervene at the interlocutory stage, particularly in light of pandemic-related delays.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 12(1), 14(1)(a), 14(2), 15, 21, and 34 - Challenge to appointment of Arbitrator - Petitioner sought termination of Arbitrator's mandate alleging bias and failure to act with due dispatch - The petition dismissed as unmerited; the challenge to appointment must be made per Section 13, not Section 14 - Delay claims rejected considering Covid-19 impacts, and Tribunal's decision justified. (Paras 1, 5, 9, 13, 18, 27)

(B) Parties are required to exhaust internal arbitration procedures before resorting to courts under Section 34 after the award is rendered, incrementing the necessity for judicial discipline in arbitral matters. (Paras 14, 28)

Facts of the case:
Parties entered an arbitration agreement on June 11, 2019; subsequent disputes led to the appointment of Arbitrators, with challenges raised about their conduct and impartiality in proceedings. (Paras 1, 3, 4)

Findings of Court:
The court found the challenge to the appointment of the Arbitrator unmerited and affirmed the Arbitrator's conduct as satisfactory amidst pandemic implications.

Issues: The case addressed the validity of the challenge to an Arbitrator's appointment and the adequacy of procedural conduct during arbitration.

Ratio Decidendi: The court reiterated that challenges to an Arbitrator's appointment are to be addressed as per Section 13; judicial intervention at this stage is not permissible. Court maintained that operational delays were acceptable under the pandemic circumstances, affirming the Arbitral Tribunal’s authority. (Paras 14-27)

Result: The petition is dismissed with costs of Rs. 25,000/- to be deposited with the Delhi High Court Legal Services Committee.

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

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