JUDGMENT :

(Prayer: Petition filed under Section 14(2) of the Arbitration and Conciliation Act, 1996 to terminate the mandate of the 2nd respondent in Arbitration Case No.KBSET 1707 of 2020 and the disputes arising out of the loan agreement SPLN 63255601 dated 29.02.2020.)

This petition has been filed under Section 14(2) of the Arbitration and Conciliation Act, 1996, seeking for termination of the Arbitral Tribunal on the ground that the Arbitrator has been appointed by the first respondent on its own, which is in violation of the latest decision of the Hon'ble Supreme Court in the case of Perkins Eastman Architects DPC and Another vs HSCC (India) Ltd reported in 2019 SCC Online 1517. (Arbitration Application No.32 of 2019 dated 26.11.2019).

2. Learned counsel for the petitioner drew the attention of this Court to the following paragraphs in the aforementioned judgment:

"22. ......

(vii) If circumstances exist, giving rise to justifiable doubts as to the circumstances warrant appointment of an independent arbitrator by ignoring the procedure prescribed, the Chief Justice or his designate may, for reasons to be recorded ignore the designated arbitrator and appoint someone else."

23. Sub Para (vii) of aforesaid paragraph 48 lays down that if there are justifiable doubts as to the independence and impartiality of the person nominated, and if other circumstances warrant appointment of an independent arbitrator by ignoring the procedure prescribed, such appointment can be made by the Court. It may also be noted that on the issue of necessity and desirability of impartial and independent arbitrators the matter was considered by the Law Commission in its report No.246. Paragraphs 53 to 60 under the heading "Neutrality of Arbitrators" are quoted in the judgment of this Court in Voestapline Schienen Gmbh vs Delhi Metro Rail Corpn Ltd. while paras 59 and 60 of the report stand extracted in the decision of this Court in Bharat Broadband Network Limited vs United Telecoms Limited. For the present purposes, we may rely on paragraph 57, which is to the following effect:-

"57. The balance between procedural fairness and binding nature of these contracts, appears to have been titled in favour of the latter by the Supreme Court, and the Commission believes the present position of law is far from satisfactory. Since the principles of impartiality and independence cannot be discarded at any stage of proceedings, specifically at the stage of constitution of the Arbitral Tribunal, it would be incongruous to say that party autonomy can be exercised in complete disregard of these principles - even if the same has been agreed prior to the disputes having arisen between the parties. There are certain minimum levels of independence and impartiality that should be required of the arbitral process regardless of the parties' apparent agreement. A sensible law cannot, for instance, permit appointment of an arbitraror who is himself a party to the dispute, or who is employed by (or similarly dependent on) one party, even if this is what the parties agreed."

3. In the aforementioned decision also, one of the parties to the Arbitration agreement, has appointed an Arbitrator and the Hon'ble Supreme Court has struck it down on the ground that it will raise justifiable doubt as to the independence and impartiality of the Arbitrator and therefore, the Hon'ble Supreme Court appointed a neutral Arbitrator.

4. In the case on hand also, admittedly, the first respondent has appointed the second respondent as an Arbitrator. The petitioner has entered into a loan agreement with the first respondent, under which, there arose disputes between the parties. The first respondent has appointed the second respondent as Arbitrator for adjudicating the arbitral dispute. Since the decision of the Hon'ble Supreme Court, referred to supra, squarely applies to the facts of the instant case also, the appointment of an Arbitrator, by the first respondent, under the loan agreement between the p