The main legal point established is that the mere employment of an individual as an Arbitrator does not ipso facto raise a presumption of bias or partiality, and adherence to the terms of the agreement is essential before seeking alternative arrangements.

JUDGMENT :

The instant application is under Section 11(6) (c) of the Arbitration & Conciliation Act, 1996 for appointment of an independent and impartial Sole Arbitrator in pursuance of Clause 22 of the Lease Deed executed between the parties in order to adjudicate the dispute.

2. The facts of the case, as per the pleading made in the instant Arbitration Application, read hereunder as:-

The society entered into a lease deed with the respondent for running of a cold storage belonging to the respondent situated at Boreya in the district of Ranchi, which was executed on 27.08.2015.

The lease deed was for a period of five years. The lease deed contains a condition by which the applicant was to give possession of 2600 MT of coal storage and accordingly, the Society stored maize and potato weighing about 2300 MT in the said cold storage.

It is the case of the applicant that in the month of July, 2017, the pillars of the cold storage started giving way and the applicant vide his letter dated 23.07.2017, made a complaint to this effect to the respondent.

The respondent, even in spite of the request to take immediate action to avoid major accident, has taken no decision in this regard.

It is the further case of the petitioner-applicant that due to non-initiation of repairing of the aforesaid coal storage, the coal storage finally collapsed which resulted into huge financial loss to the tune of Rs.3,15,99,589/-.

The applicant, having no other option but to invoke Clause 22 of the lease deed dated 27.08.2015 which contains a condition for arbitration for settlement of dispute between the parties.

The petitioner-applicant gave notice as per the condition stipulated under the agreement clearly stating at paragraph 10 therein that in terms of the agreement, the

Registrar Cooperative Society had been named as an Arbitrator, however, in view of the amendment of Arbitration and Conciliation Act, 1996, which has taken effect from 23.10.2015, the Registrar, Cooperative Society, who is ex-officio Director of Respondent, cannot act as an Arbitrator and accordingly the respondent was requested to give consent for appointment of one of the retired Judge named in the notice to act as a sole Arbitrator. However, no response was given to the aforesaid notice and, therefore, the instant application under Section 11(6) of the Arbitration and Conciliation Act, 1996 has been filed.

3. Mr. M.K.Roy, learned counsel appearing for the petitioner-applicant, has submitted by taking aid of the Amended Arbitration Act, 2015, whereby and whereunder provision has been inserted as under Section 12 thereof wherein it has been stipulated that when a persons is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances, as referred under Sub-Sections (a) and (b) which contains that in case the concerned arbitrator who is named in the arbitration agreement or to be appointed, is having direct or indirect of any past or present relationship with or interest in any of the parties or in relation to the subject matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality and which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of twelve months.

Further, the grounds stated in the Fifth Schedule shall guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an arbitrator and as under Explanation 2, the disclosure shall be made by such person in the form specified in the Sixth Schedule.

It has further been argued by taking aid of Sub-Section 5 of Section 12 thereof that any person whose relationship, with the parties or counsel or the subject matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be inelig