The appeals were dismissed due to lack of evidence demonstrating the arbitrator's bias, emphasizing that mere allegations of disclosure failures do not invalidate ex-parte awards without clear proof of impartiality issues.

JUDGMENT

Manoj Kumar Ohri, J. By way of the present appeals filed under Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter, referred to as `the Act'), the appellants have assailed the common order dated 18.08.2020 passed by learned ADJ-03, South-East, Saket Courts, New Delhi in Arbitration Petition Nos. 78/2018 and 79/2018, whereby appellant's objections under Section 34 to the two Arbitral awards dated 23.06.2016 were dismissed.

2. Facts necessary for the disposal of the present appeals are as following. Respondent No.1/claimant, a non-banking financial company, made a claim against the appellants in respect of two loans of Rs.75,00,000/- and Rs.1,07,14,000/- granted to them, principal borrower/guarantor. A sole arbitrator was appointed at the behest of respondent No.1 vide nomination letter dated 23.02.2016 and the arbitral proceedings were pursued before the sole arbitrator.

3. In the Arbitral proceedings, though the appellants were served, they remained unrepresented and were proceeded ex-parte on 06.05.2016. Eventually, both claims were allowed ex-parte vide two separate arbitral awards dated 23.06.2016.

4. Besides the above two claims, respondent No.1 had filed two more claims against the appellants, with respect to two other loan accounts. In these proceedings too, ex-parte arbitral Awards were passed by the sole arbitrator on 16.12.2016.

5. The appellants' case is that they became aware of the Arbitrators' appointment in all the four cases only at the time when execution proceedings were initiated by respondent No.1 to enforce the ex-parte arbitral Awards. According to the appellants, the objection to the Arbitrator's appointment was taken by them at the earliest in Section 34 proceedings and one of the grounds to challenge the Awards was that the same were passed ex-parte against the appellants.

6. In all the four arbitral proceedings, the sole arbitrator was the same, which fact, according to the appellants, renders the Award in question legally vulnerable, due to lack of proper disclosure by the sole arbitrator under Section 12 of the Act, as discussed below.

7. The appellants filed objections under Section 34 of the Act against all the four Awards, vide separate Arbitration Petition Nos. 76, 77, 78 and 79 of 2018, which came to be disposed of vide the common impugned order.

8. In all the four petitions, a common objection was raised about want of mandatory disclosure by the sole arbitrator in terms of Section 12 read with Schedule VI, disclosing his appointment in four arbitral proceedings, thereby raising doubts over his eligibility to continue as an arbitrator in all the four proceedings. The Arbitrator made a declaration in all the four arbitral proceedings that he was exempted from making a disclosure in terms of Schedule VI, as his appointment was from a pool of arbitrators, covered by Explanation 3 of Schedule VII. The appellants denied the applicability of Explanation 3 and submitted that the Arbitrator's appointment in all the four proceedings was hit by Entries 22 and 24 of Schedule V.

9. Before this Court, it was contended by the appellants that the Court below rejected plea of respondent No.1 being covered by Explanation 3 of Schedule VII, and held that the disclosure under Section 12 of the Act was mandatory. However, the Court erred in holding that the disclosure was required to be made only in the later proceedings, namely Arbitration Petition Nos. 76 and 77 of 2018, disclosing his earlier appointment in Arbitration Petition Nos. 78