Point of Law- The Arbitration Act itself gives various procedures and forums to challenge the appointment of an arbitrator. The framework clearly portrays an intention to address most of the issues within the ambit of the Act itself, without there being scope for any extra statutory mechanism to provide just and fair solutions.

Headnote:
Arbitration and Conciliation Act, 1996 - Section 9, 12(5), 17, 12(5), 2(h), 8, 16, 14(2), 5, 34 - Constitution of India, 1950 - Article 226 and Article 227 - Whether arbitral process could be interfered under Article 22 6 /22 7 of Constitution, and under what circumstance.
Findings of the Court - In view of aforesaid settled legal proposition, considering policy, object and provisions of Act,1996, an order passed during arbitration proceedings by Arbitration Tribunal cannot be challenged under Articles 226 and 227 of Constitution of India as Act,1996 is a special act and self contained code dealing with arbitration - Impugned order of Arbitration Tribunal deciding preliminary objection raised by petitioner cannot be challenged under Article 226 or 227 of Constitution of India - However, made clear that petition is dismissed without entering into merits of matter, only on ground that order passed during course of arbitration cannot be challenged under Articles 226 and/or 227 of constitution of India and it would be open for both sides to raise all contentions on merits before appropriate forum in appropriate proceeding at appropriate time in accordance with law - Interim relief, if any stands vacated - Rule is discharged with no order as to costs.
Result- Petition dismissed

JUDGMENT :

1. Heard learned Senior Advocate Mr. Mihir Thakore for learned advocate Mr. Dipen Desai for the petitioner of Special Civil Application No. 14555 of 2019, learned Senior Advocate Mr. Shalin Mehta for learned advocate Mr. Bomi Shethna for the petitioner of Special Civil Application No. 13244 of 2019 and learned Senior Advocate Mr. Kamal Trivdei for learned advocate Mr. Hriday Buch for respondent No.1.

2. Both these matters are arising out of the common issue and therefore, the same are heard analogously and are disposed of by this common order.

3. Special Civil Application No. 13244 of 2019 is filed with the following prayers:

“(A) This Hon’ble court be pleased to admit this petition;

(B) This Hon'ble Court be pleased to issue, appropriate writ, direction and/or order in the nature of mandamus directing the Respondent no.4-sole arbitrator Mr. Hitesh Bagdai to delete the name of the petitioners who are unnecessarily joined as party to the arbitration proceedings pending at Rajkot and further be pleased to quash the entire arbitration proceedings against the petitioners;

(C) This Hon'ble Court be pleased to issue, appropriate writ, direction and/or order in the nature of certiorari quashing and setting aside the notice dated 3.6.2019 issued by the arbitrator to the petitioners and consequent proceedings;

(D) Pending admission and/or final disposal of this petition this Hon'ble Court be pleased to stay the notice dated 3.6.2019 issued by the sole Arbitrator-Mr. Hitesh Bagdai qua the petitioners.

(E) Ad-interim and/or interim relief in terms of para (D) herein above;

(F)Pass such other and further order as thought fit in the interest of justice;”

4. Special Civil Application No. 14555 of 2019 is filed with the following prayers:

(A) The Hon’ble Court be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the proceedings of arbitration commenced by the respondent No.1-Sole Arbitrator vide notice dated 05.11.2018 at Annexure-J and for which impugned notice dated 19.07.2019 is issued, annexed at Annexure-M to the petition.

(B) The Hon’ble Court be pleased to issue a writ of prohibition or writ in the nature of prohibition permanently prohibiting/restraining the respondent no.l from proceeding further with the arbitration proceedings initiated by the respondent No.2.

(C) Pending hearing and final disposal of the petition, the Hon’ble Court may be pleased to stay the further execution, operation and continuation of arbitral proceedings which have been commenced by the respondent No.2 before the respondent No.l.

(D) The Hon’ble Court may be pleased to grant such other and further relief/s as deemed just and proper by this Hon’ble Court in the interest of justice.”

5. This Court [Coram: Hon’ble Mr. Justice A.Y.Kogje] passed the following order on 01.08.2019 in Special Civil Application No. 13244 of 2019:

“1. NOTICE returnable on 5th SEPTEMBER, 2019.

2. Learned Senior Counsel for the petitioners relying upon the judgment of this Court in the case of Saurashtra Chemicals ltd. and Others v. Hon'ble Mr. Justice K. Ramamoorthy (Retd.) reported in MANU/GJ/0329/2005 submits that the Arbitration Petition is not maintainable. It is further submitted that the petitioners are not the party to the MOU under which the Arbitration Clause is provided, yet the petitioners are impleaded as a party and that too, in the Arbitration proceedings. Initially when the notices were issued on two occasions by the Arbitrator, the petitioners were not the party and no Notice was issued.

3. It is submitted that in an application under Section 9 before the Civil Court, the petitioners had filed a separate application on the ground that the petitioners are not party to the MOU and therefore, cannot be roped in the Arbitration proceedings. However, such an application had remained undecided in view of the fact that the Section 9 Application itself was rejected. Learned Senio

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2021 Supreme(Guj) 942

Cases Referred (14)