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DELHI HIGH COURT
VIBHU BAKHRU, AMIT MAHAJAN
Ram Kumar – Appellant
Versus
Shriram Transport Finance Co. Ltd. – Respondent
| Table of Content |
|---|
| 1. overview of the case and nature of appeal. (Para 1 , 2) |
| 2. controversy regarding the arbitrator's eligibility. (Para 3 , 11 , 12 , 13) |
| 3. commercial court's reasoning on challenged arbitrator's disclosure. (Para 14 , 15 , 16 , 17) |
| 4. mandatory nature of arbitrator's disclosure. (Para 19 , 20 , 22 , 23) |
| 5. supreme court rulings on arbitrator ineligibility. (Para 26 , 28 , 29) |
| 6. final ruling sets aside the arbitral award. (Para 31 , 32) |
JUDGMENT
Vibhu Bakhru, J. The appellants have filed the present appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereafter `the A&C Act') impugning an order dated 30.06.2020 (hereafter `the impugned order') rendered by the learned Commercial Court. By virtue of the impugned order, the learned Commercial Court rejected the appellants' application preferred under Section 34 of the A&C Act [being OMP (Comm.) No.44/2019 captioned Ram Kumar & Anr. v. Shriram Transport Finance Co.], whereby they had impugned an arbitral award dated 30.08.2019 (hereafter `the impugned award') delivered by an arbitral tribunal comprising of a sole arbitrator.
2. In terms of the impugned award, the Arbitral Tribunal has awarded a sum of Rs
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.
An ineligible arbitrator appointed unilaterally violates Section 12(5) of the Arbitration and Conciliation Act, rendering the arbitral award invalid.
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 ....
The mandatory notice under Section 21 for arbitration commencement must be received, not just sent, and failure to disclose connections violates Section 12, compromising arbitration impartiality.
Point of Law : It is not open for the petitioner to challenge the learned Arbitrator on the ground that there are justifiable doubts as to his independence and impartiality in terms of the Guidelines....
The main legal point established in the judgment is that the notice under Section 21 of the A&C Act must be received for the arbitration to commence, claims must be initiated within the limitation pe....
Arbitral Tribunal challenges must follow Section 13's procedures; courts cannot intervene at the interlocutory stage, particularly in light of pandemic-related delays.
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.
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