The timely objections to an arbitrator's impartiality are essential; delays in raising such objections or challenges on grounds of bias and limitation render subsequent claims unenforceable under the Arbitration Act.

JUDGMENT :

M. Dhandapani, J.

1. Through the present appeal, the appellant challenges the fair and decreetal order passed by the Principal District Court, Coimbatore in Ar. O.P. No.118/2004 dated 18.01.2006 in and by which the court below had set aside the arbitral award, which was passed in favour of the appellant herein.

2. For the sake of convenience, the parties will be referred to as appellant and respondent as arrayed herein.

3. The brief facts necessary for the disposal of this appeal are :-

The 1st respondent company has business transaction with the appellant for the purchase of cotton bales for which they had entered in 5 different contracts during the year 2000. After entering into the contract, the 1st respondent was not able to comply with the terms and conditions of the contract and, therefore, the appellant claimed a sum of Rs.3,33,38,997.21 towards loss on account of resale of 750 unlifted bales under the above contract. As the contract provided for arbitration, the appellant appointed the 2nd respondent herein as the sole arbitrator, who in A.O.P. No.48/02 dated 20.08.2003, passed an award along with future interest at 12% p.a., against the petitioner aggrieved by which the 1st respondent preferred the original petition before the court below.

4. The main ground canvassed in the arbitration petition was that the 2nd respondent was in the panel of arbitrators of the appellant and had been receiving fees from time to time from the appellant and that the said fact was not disclosed u/s 12 of the Arbitration and Conciliation Act (for short 'the Act') and, therefore, the arbitral award is unsustainable. It was further contended that the respondent had been declared a sick industry u/s 22 of the SICK INDUSTRIAL COMPANIES ACT and the said provision acts as a bar for the maintainability of the present petition. It was further contended that for the very same reason, in O.P. No.427/2000, this court had set aside the award passed by the said arbitrator.

5. Contrarily it was contended that the above contentions were raised by the 1st respondent through additional grounds, well beyond the period of 120 days from the date of passing of the arbitral award and, therefore, the same is hit by Section 34 (3) of the Act. It was further contended that the plea of bias of the arbitrator was never raised by the 1st respondent, which ought to have been raised at the earliest point of time and, therefore, the said plea cannot be entertained.

6. On the above contentions and counter contentions, the court below held that as mandated u/s 12 of the Act, the factum of the 2nd respondent, being on the panel of the company, has not been disclosed by the arbitrator or the appellant and, therefore, the same is hit by Section 12 (3) (a) of the Act and the decision of this Court in O.P. No.427/2000. It was further held that the 1st respondent being a sick company, in view of Section 22 (i) of the SICK INDUSTRIAL COMPANIES ACT , there is a bar as to the maintainability of the application and no legal proceedings can be maintained and on the aforementioned findings, the court below, set aside the arbitral award, which is put to test before this Court in the present appeal.

7. Learned counsel appearing for the appellant, while reiterating the submissions as has been advanced before the court below, submit