Back
2025 Supreme(Online)(Del) 3247
IN THE HIGH COURT OF DELHI AT NEW DELHI
Jasmeet Singh, J
ROSHAN REAL ESTATES PVT LTD – Appellant
Versus
GOVERNMENT OF NCT OF DELHI – Respondent
O.M.P.(T)(COMM.) 23/2025
For the Appellants/Petitioners: Ms. Anusuya Salwan
For the Respondents: Mr. Tushar Sannu, Mr. Aman Kumar
The court ruled that prior professional relationships create justifiable doubts about an arbitrator's independence, necessitating the termination of their mandate under the Arbitration Act.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 14 and 15, Section 12(5) - Challenge to appointment of arbitrator - Prior professional relationship creating justifiable doubts about independence and impartiality - The appointed arbitrator’s association with a party renders them ineligible under the Seventh Schedule - Court appointed retired Judge as new arbitrator. (Paras 43, 44)
(B) Arbitrator's Independence - The essence of impartiality and neutrality must be safeguarded in arbitration proceedings - Prior relationships cannot merely be dismissed based on time passage; they raise perceptions of bias. (Paras 30, 32)
Facts of the case:
The contractor filed a petition seeking termination of the arbitrator's mandate due to alleged bias stemming from a past professional relationship, asserting that the arbitrator was not impartial.
Findings of Court:
The court acknowledged the necessity of independence in the arbitral process and ruled that the past association of the arbitrator with one of the parties undermines the arbitration's integrity.
Issues: The primary issue was whether the appointed arbitrator’s past professional association constituted grounds for termination of the mandate.
Ratio Decidendi: The court held that past relationships between the arbitrator and a party can create valid perceptions of bias, leading to the conclusion that the appointed arbitrator was disqualified.
Result: The petition was allowed, and the arbitrator's mandate was terminated.
| Table of Content |
|---|
| 1. petition for the termination of the arbitrator's mandate. (Para 1 , 2 , 4 , 5) |
| 2. arguments highlighting the bias of the appointed arbitrator. (Para 7 , 8 , 9 , 10) |
| 3. analysis of the arbitrator's impartiality and statutory provisions. (Para 19 , 22 , 30) |
| 4. court's decision to appoint a new arbitrator. (Para 43 , 44) |
JUDGMENT
: JASMEET SINGH, J
1. This is a petition filed under Section 14 and 15 of the Arbitration and Conciliation Act, 1996 (for brevity “the Act”) seeking termination of the mandate of the arbitrator, Mr. B.B. Dhar (for brevity “the appointed arbitrator”), appointed vide the order dated 10.02.2025 passed by this Court and appointment of another independent arbitrator to adjudicate the disputes between the parties.
FACTUAL BACKGROUND
2. The brief facts of the case as per the petition are that Roshan Real Estates Pvt. Ltd. (for brevity “the petitioner”) was awarded a Central Public Works Department (for brevity “CPWD”) contract vide the letter of acceptance dated 05.01.2019 for an amount of Rs.71,94,05,800/- for constructing additional classrooms, laboratories, toilets and allied services at 7 government schools in South-East Delhi. The works were completed to the satisfaction of the respondent and the petitioner raised its final bill for Rs.20,73,39,891/- on 23.05.2022. When payment was released in March 2023, the respondent unilaterally reduced the amount to Rs.5,09,52,388/- giving rise to multiple monetary claims and disputes.
3. Clause 25 of the General Conditions of the Contract (for brevity “GCC”) prescribes a three-tier dispute-resolution mechanism: decision by the Superintending/Chief Engineer, reference to a Dispute Resolution Committee (for brevity “DRC”), and, if unresolved, arbitration. Since the arbitration clause is undisputed, the same is not reproduced herein.
4. Between July 2023 and February 2024, the petitioner exhausted the three- tier dispute resolution mechanism envisaged in Clause 25 of the GCC and on 16.12.2024, the petitioner issued a notice under Section 21 of the Act and when no arbitrator was appointed, filed ARB.P. 214/2025 under Section 11 of the Act in this Court. Vide the order dated 10.02.2025, this Court appointed Mr B. B. Dhar, a retired CPWD engineer, as the sole arbitrator to adjudicate the disputes between the parties.
5. Later, the petitioner discovered that the appointed arbitrator had been the concerned engineer in various works executed by the petitioner for the respondent. In another PWD dispute between the parties, the respondent withdrew the appointment of Mr. B.B. Dhar vide the letter dated 17.08.2020 on the similar objection by the petitioner.
6. Hence, the present petition under Sections 14 and 15 of the Act seeking termination of the mandate of the appointed arbitrator and appointment of an independent arbitrator.
SUBMISSIONS ON BEHALF OF THE PETITIONER
7. Ms. Salwan, learned counsel appearing on behalf of the petitioner, submits that the appointment of the appointed arbitrator is invalid because it is violative of the independence and impartiality safeguards introduced by the Arbitration and Conciliation (Amendment) Act, 2015 (for brevity “the 2015 Amendment”).
8. In paragraph Nos. 18 to 22 of the petition, it is stated that the appointed arbitrator had prior professional relationship with the petitioner. The said paragraphs are reproduced as under:
“18. It is submitted that that Mr. B. B. Dhar on earlier occasions was the concerned Engineer in various works executed by the Petitioner.
19. The Petitioner was awarded work of Redevelopment of “C” block at Delhi High Court, Sher Shah Suri Marg, New Delhi (SH: C/o RCC framed structure building i/c water supply, sanitary and electrical installations). Since disputes arose between the parties, the Petitioner invoked the arbitration clause. The Chief Engineer, PWD, GNCTD vide letter dated 07.08.2020 appointed Mr. B. B. Dhar as sole arbitrator to decide the disputes between the parties. …
20. The Petitioner vide letter
