VK Dewan & Co Vs Delhi Jal Board & Ors
After a dispute arose between the parties, and on the appointment of an arbitrator, the petitioner raised doubts about the impartiality and independence of the arbitrator ande submitted its plea of bias based on the fact that the respondent had offered the arbitrator an appointment as a consultant, which however, was not accepted by the arbitrator.
It was held that u/s 12, the appointment of an arbitrator can be challenged and his mandate terminated if clear and convincing circumstances exist to raise justifiable doubts as to his independence or impartiality. The mere fact that an arbitrator has been offered some assignment, being a retired officer, cannot give rise to any justifiable doubts.
It was also held that the courts should be slow in terminating the mandate of an appointed arbitrator as it results in delays of arbitral proceedings. It is true that an arbitrator should scrupulously avoid giving any impression that he is not independent or impartial and must disclose to the parties the circumstance, if any, referred to in section 12(1). But the courts, while considering such a petition, should objectively examine as to whether there is any real danger of bias and the complainant's apprehension are well founded. If at the end of the day an award is passed by the arbitrator and a party is in a position to show that it cannot be sustained in view of the grounds available to it u/s 34, objections can be raised against the award.
Under the 1996 Act, the court must stick to the policy of minimum intervention in arbitral proceedings. No party should be allowed to indulge in dilatory tactics. The petitioner's doubts are groundless in this case.
Interstate Constructions Vs NPCC Limited
This matter illustrates a fit case for termination of the mandate of an arbitrator and appointment of a fresh arbitrator. The petitioner alleged that due to the obstinate approach of the respondent's CMD and the arbitrator appointed by him (who was an employee of the respondent), the petitioner's claim for arbitration was thwarted for several years. The petitioner had requested the CMD to appoint an arbitrator at New Delhi and it was done so. However the proceedings were scheduled to be held inexplicably at Chennai.
It was held that such action was taken to put the claimant to a maximum disadvantage. Also, since the CMD appointed the arbitrator at Delhi, the objections as to the territorial jurisdiction of this court is mala fide and facile. The appointing authority should always be mindful that he discharges a fiduciary duty towards the adversaries and while nominating an arbitrator the effort should be to facilitate and not frustrate the adjudication. Neither the CMD nor the arbitrator has been able to rise above the interests of their employer. It is this type of conduct and dealing which sometimes compels the court to override clauses in an agreement which waive objections as to impartiality of the arbitration on the grounds that he is an officer of one of the parties. If they cannot act impartially, they should rescue themselves and not violate the solemn trust reposed in them.
Accordingly the authority of the arbitrator was set aside. Keeping the biased and partial attitude of the CMD in mind, the court made the fresh appointment of an arbitrator.
MD Army Welfare Housing Organisation Vs Sumangal Services Pvt Ltd
While discussing the scope of power of the Arbitral Tribunal u/s 17, the court held that the power of the tribunal is a limited one. The tribunal cannot issue any direction which would go beyond the reference or the arbitration agreement. U/s 17, an interim order must relate to the protection of the subject matter of the dispute. The order so passed by the tribunal may be addressed only to a party to the arbitration and not to be addressed to third parties. Also, u/s 17, no power is conferred upon the arbitral tribunal to enforce its order nor does it provide for judicial enforcement thereof.
Hairtha Finance Ltd Vs ATV Projects India Ltd
The court distinguished between sections 9 and 17 of the 1996 Arbitration Act and held that the scope of section 9 is considerably wider than that of section 17. It was further held that although the arbitral tribunal was also given the power u/s 17 to pass orders by way of interim measures of protection, it can be passed only with respect to the subject matter of the dispute. Such a power can also be excluded by an agreement between the parties. In all these aspects, the scope of section 9 is wider than section 17.
Viraj Holdings Mumbai Vs Motilal Oswal Securities Pvt Ltd
The effect of non service of written submission in advance on the other party was discussed in this case. The contention of the petitioner was that since the respondent's written submission was not handed over to him in advance, there was a breach of section 18 which talked about equal treatment of parties.
It was held that written submissions are not incorporated as part of any procedural law governing either the functioning of courts or arbitrators. They are often required by the arbitrator or submitted by the parties voluntarily for the sake of convenience. Merely because a written submission is not served in advance on the other side, it would not be possible to infer that there is denial of equal treatment to the parties who are required to be given full opportunity to present their case.
Moreover, section 18 requires the arbitrator to treat the parties equally. If one party fails to submit his written submission to the other party, it could hardly be said to be a lapse on the arbitrator's part. Therefore there was no merit in the petitioner's contention.
Government of NCT, Delhi Vs Khem Chand
This case looked into the determination of what is misconduct by an arbitrator, in the light of the plea of the petitioner that the arbitrator had ignored the evidence placed on record by the petitioner.
It was held that the petitioner's plea does not bring out a case of misconduct on the part of the arbitrator as envisaged u/s 18. the court further elucidated that there are specific acts of misconduct that are attributable to the arbitrator, in violation of section 18, which would furnish a ground for setting aside of the award u/s 34(2)(a)(v). Such acts would include the arbitrator taking evidence of one party behind the back of the other party, the arbitrator receiving undue hospitality from one party or taking bribes or any other such act which would show that the award was induced or affected by the corruption.
Hindustan Shipyard Limited Vs Essar Oil Limited & Ors
One of the issues discussed in this case was the effect of determination of rules of procedure in the event the parties have not fixed any specific procedures.
It was held that when such a procedure is not fixed by the parties, the arbitral tribunal has to follow the statutory procedure; it means it has to weigh the entire evidence on record properly and that it has to come to just conclusions within the parameters of the dispute. In the absence of any agreement between the parties with regard to procedure, the arbitral tribunal is bound to follow the procedure as contained u/s 19(4) and they have the duty to determine the admissibility and weight of evidence of the documents filed by both the parties.
Maharashtra State Electricity Board (MSEB) Vs Datar Switchgear Ltd
This case looked into the permissibility or impermissibility of suspension or termination of arbitral proceedings as a step in aid of the execution of an interim order and whether the arbitrator had the power to suspend hearing of arbitral proceedings.
It was held that it would be impermissible to read into section 19(3) a power to suspend arbitral proceedings as a step to aid execution of an interim order. While consolidating and amending the law relating to domestic and international commercial arbitration, the Legislature had made specific provisions for termination or suspension of proceedings in section 32 of the 1996 Act.
Jagson Airlines Ltd Vs Banwari Amman Exports (P) Ltd
This case involved an issue on the place of arbitration, emanating from the arbitration clause by virtue of which the parties had chosen some different place other than the one determined and decided by the arbitrator. In the instant case, the aggrieved party had rushed to the court the moment the arbitrator had returned his decision on the place of arbitration. The question was what was the appropriate stage to challenge the arbitrator's decision.
It was held that the aggrieved party has a right to assail the decision of the arbitrator at the stage when the decision is taken by the arbitrator. The party cannot be forced to wait for the arbitral award to challenge the arbitrator's decision on the place of arbitration. To force the aggrieved party to wait for the award and then to come before the court u/s34 would not be only counter productive but also highly preposterous and far fetched proposition because if the decision of the arbitrator as to the place of arbitration is set aside u/s 34, the whole proceedings would get vitiated and the time, money and effort on the part of the arbitrator and parties would be rendered nugatory and futile.
Bhai Sardar Singh & Sons Vs Delhi Development Authority
This case delved into section 21 to see whether its scope of operations would be prospective or retrospective in its effect.
It was held that section 21 provides that unless agreed by the parties, arbitral proceedings in respect of a particular dispute commences on the date on which a recourse for that dispute to be referred to arbitration is received by the other party. Obviously the operation of section 21 would be prospective in nature. It has not been given retrospective effect.
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