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2019 Supreme(Raj) 8

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
ARUN BHANSALI, J.
Doshion Private Limited - Petitioner
Versus
Hindustan Zinc Limited & Ors. - Respondents
S.B. Civil Writ No. 6074 of 2018
Decided On : 03-01-2019

Advocates Appeared:
For the Petitioners: Mr. Ankit Sareen.
For the Respondents: Dr. Sachin Acharya. Mr. Shridhar Mehta.

Headnote:

Constitution of India – Article 226 and 227 – Arbitration and Conciliation Act, 1996 – Section 14 – Order passed by Commercial Court whereby, application filed by petitioner under Section 14 been partly accepted requiring arbitrator to resettle his fees carried out by the arbitrator closing evidence of petitioner been set aside prayer to declare that mandate of the learned arbitrator stands terminated been declined – Held, If mandate is not terminated and the second respondent is permitted to continue with Arbitration proceedings, it will amount to forcing a higher fee on the petitioner which they are not capable of paying – Writ petition allowed (Para 33,34, 35)

Facts of the Case:

Order passed by Commercial Court whereby, application filed by petitioner under Section 14 been partly accepted requiring arbitrator to resettle his fees carried out by the arbitrator closing evidence of petitioner been set aside prayer to declare that mandate of the learned arbitrator stands terminated been declined

Finding of Court :

If mandate is not terminated and the second respondent is permitted to continue with Arbitration proceedings, it will amount to forcing a higher fee on the petitioner which they are not capable of paying

Result: Writ petition allowed

ORDER :

1. This writ petition under Article 226 and 227 of the Constitution of India is directed against the order dated 9/4/2018 passed by the Commercial Court, Jaipur, whereby, the application filed by the petitioner under Section 14 of the Arbitration and Conciliation Act, 1996 (‘the Act’) has been partly accepted requiring the learned arbitrator to resettle his fees according to Schedule IV read with Notification of the High Court dated 23/3/2017, the proceeding dated 1/4/2018 carried out by the arbitrator closing the evidence of the petitioner has been set aside, however, the prayer to declare that the mandate of the learned arbitrator stands terminated has been declined.

2. On a dispute arising between the parties i.e. the petitioner and the respondent no.1 (‘HZL’), this Court, by order dated 27/9/2016, on an application filed by the HZL, appointed the sole arbitrator to adjudicate upon the disputes between the parties in terms of the arbitration agreement and as per the Manual of Procedure for Alternative Dispute Resolution, 2009.

3. During the course of arbitration proceedings, the learned arbitrator fixed the fee for arbitration to be Rs. 75 lakh, which was contested by the petitioner and it sought its reconsideration in the light of Schedule IV of the Act, which prayer was declined by the arbitrator.

4. In the meanwhile, a notification dated 23/3/2017 came to be issued by the High Court providing for the charging of fees by the arbitrators, which was made applicable w.e.f. 23/10/2015. Based on the above notification, again a submission was made before the learned arbitrator regarding the quantum of fees, however, though the prayer was declined, the learned arbitrator offered discount by record of proceedings dated 26/5/2017 and the total fees was fixed at Rs.55 lakh indicating a total discount of Rs.20 lakh. Relevant para of the record of proceedings dated 26/5/2017 reads as under:

“6. As considered the submissions and in view of the legal and factual position, according to me, being as discussed in para 3 & 4, still bearing further benevolence, the fee structure is modified and given the further discount, the total fee is fixed at Rs.55 lacs only. Thus, a total discount of Rs.20 lacs is given collectively to both the parties.”

5. After passing of the order dated 26/5/2017, the petitioner approached this Court by filing application under Section 14 of the Act seeking termination of the mandate of the learned arbitrator on the ground of misconduct on his part by charging excessive and exorbitant fees and not following the Notification dated 23/3/2017.

6. The said application filed by the petitioner under Section 14 of the Act was held as not maintainable by order dated 4/1/2018 by this Court and the same was, therefore, dismissed with liberty to the petitioner to approach the jurisdictional court, if so advised.

7. Though the petitioner approached the Division Bench against the order dated 4/1/2018, the appeal was withdrawn. The petitioner thereafter, approached the Commercial Court by filing application under Section 14 of the Act seeking removal/substitution of learned arbitrator.

8. During the pendency of the said proceedings before the Commercial Court, on 1/4/2018 the learned arbitrator dictated/passed an ex-parte award, the operative portion of the proceedings dated 1/4/2018 reads as under:

“In view of the above in the spirit of Section 15 of the Indian Limitation Act, since after excluding the time consumed on account of the matter being carried Hon’ble High Court and/or to the commercial court resulting into stalling these proceedings, a very short time is available at the disposal of this tribunal to complete the proceeding, and since the persons appearing for the claimant, do not want to lead any rebuttal evidence, therefore at their request the final arguments in the matter were heard today (Ex-Parte).

After concluding the arguments the award has been orally dictated to the steno and on its being transcribed a soft co




















































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