Anuptech Equipments Private Ltd Vs Ganpati Co-operative Housing Society Ltd
The usual norm is that if the objection to the appointment of an arbitrator, who is not duly qualified, has been waived, then it would not be open to the petitioner to challenge his appointment on the ground that he was not duly qualified. In this case, the court had to examine whether the right to object had been waived by the petitioner.
It was held that it is not possible to accept that there has been a waiver on the petitioner's part, who had been constantly reminding the respondent to appoint a person duly qualified. There is nothing on record to show that the petitioner was aware of the arbitrator's qualifications. The tribunal, therefore, as constituted was not in terms of the agreement between the parties. U/s 12(3), the appointment of the arbitrator could have been challenged, if he did not possess the qualifications agreed to by the parties, at the earliest available opportunity possible. The challenge was made within a reasonable time and therefore the court is of the view that there has been no waiver by the petitioner.
RK Agarwal Vs BPK Johri
There was a plea that absence of appellate remedy before the award is made by the arbitral tribunal renders the statute arbitrary and opposed to Article 14 of the Constitution.
It was held that it is wrong to say that no appeal is provided against the order. An appeal may be filed [vide section 12(5)] wherein the adverse order u/s 13(4) can be challenged. The only difference is that the stage of appeal is postponed. The legislature has, in its wisdom, chosen the appropriate stage to provide the right of appeal. There is no vested right of appeal and as such the demarcating of the stage of appeal cannot be described as an arbitrary exercise of statute making power.
The legislature felt that frequent recourse to appellate remedy destroys the essence behind the enactment of the Arbitration Act. As there is no inherent right of appeal except as conferred by statute, it is difficult for the court to hold that it amounts to arbitrariness violating the protective cover of Article 14 of the Constitution.
M. Mohan Reddy Vs Union of India
The petitioner was aggrieved that the unsuccessful challenger, either u/s 13(4) or 16(5) have no right to appeal while the person who suffers an order upholding an objection has a right to appeal u/s 37 (1)(a). The question before the court was whether the above sections were violative of the Constitution.
It was held that it is not desirable for the arbitrator to proceed with the enquiry before deciding the competence first. Once the arbitrator rules that he has jurisdiction, the aggrieved party subjected to arbitration is not left remediless, but he has to wait and invoke Section 34 for setting aside the award.
On the other hand, if the party subjected to arbitration is given a chance to appeal at the threshold, as is given to the party seeking arbitration, the entire proceedings may be stalled and it may take years to resolve the same. The Legislature has aimed to cut short the procedural aspects for providing speedy and efficacious remedy and not providing an appeal against the ruling of the arbitrator upholding his competence to deal with the matter is one such step in aid of faster disposal of the proceedings.
Jai Singh Vs Delhi Development Authority
The petitioner filed an application for revocation of the arbitrator's authority after participation in the proceedings which were now at the last stage. The arbitrator was designated by post and there was frequent change in the arbitrator due to transfers however, after the appointment of the present arbitrator, there had been no change.
It was held that in the present case, the petitioner had participated in the arbitration proceedings, all his claims had been agitated before the arbitrator, records had been perused by the arbitrator in support of the claims, written arguments had been submitted therefore it was too late for the petitioner to approach this court for termination of the authority of the arbitrator. There was no justification or merit in the petitioner's application.
Harike Rice Mills Vs State of Punjab
This case explored the basis of the provision for challenge to appointment of an arbitrator.
It was held that the Parliament had enacted the 1996 Act on the lines of UNCITRAL Model Law, as approved by the General Assembly of the United Nations subject to slight modifications suiting local conditions in our country. Under the Model Law, a party has been given a right to challenge the appointment of an arbitrator before the arbitrator himself and if the party is unsuccessful, Article 12(3) of the Model Law grants a last resort to the party to approach the Court to challenge the appointment at that stage itself without waiting for the arbitrator to make the award.
However, section 13 (4) an (5) make a distinct departure in this regard, with a view to prevent dilatory tactics. For this reason, the Parliament has not allowed the unsuccessful party to challenge the appointment immediately when its challenge had been unsuccessful before the arbitrator. The section requires the party to wait and challenge the same only after the arbitral award has been made.
Rail India Technical and Economic Services Ltd Vs. Ravi Construction, Bangalore
This case helped in the determination of what constituted a waiver to the objection to appointment of the arbitrator. According to section 4, if a party, who knows that any requirement under the 1996 has not been complied with and yet proceeds with the arbitration without stating his objections to such non compliance without undue delay or within the fixed time frame, shall be deemed to have waived his right to object.According to section 13, a party who intends to challenge an arbitrator has to send a written statement of reasons within 15 days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in section 12(3). However, the appellant failed to object to the appointment of the arbitrator within the time frame.
It was held that reading all these sections together, it is clear that if the Claimant wanted to challenge the appointment of the arbitrator, it ought to have raised it before the arbitrator in the manner provided in section 13(2). Since it failed to do so, it has waived its right to object to the appointment of the arbitrator.
Haryana Telecom Ltd Vs Union of India
Briefly the facts of the case are that the arbitrator was appointed by the respondent at the request of the claimant. Later on, the arbitrator was changed by the respondent due to his unwillingness to act and the new arbitrator so appointed failed to act without undue delay. The claimant requested for a change of arbitrator but the respondent failed to appoint another arbitrator, therefore, the claimant filed a petition u/s 11(6) for appointment of independent arbitrator.
It was held that petition for appointment of arbitrator u/s 11 (5) and (6) was not maintainable in the case of the arbitrator's failure to act without undue delay; remedy u/s 14(1)(a) or 13 should be availed. In the event the appointed arbitrator fails to act without undue delay, the remedy available to the claimant is to file a petition u/s 14(1)(a) for his removal. Further, appointment of the arbitrator can be assailed by taking resort to challenge procedure as provided by section 13 of the 1996 Act and not by this petition for appointment of new arbitrator.
Ashalata S Lahoti Vs Hiralal L Tiladhar
In this case, the scope of termination of the mandate of the arbitrator was assessed and it was held that u/s 14 of the Act, the mandate of the arbitrator shall terminate if he becomes de facto or de jure unable to perform his functions. The arbitrator must therefore be able to proceed with the arbitration proceedings. If the Tribunal is constituted contrary to Section 10 of the Act, the arbitrators will de jure not be able to perform those functions. In that event the parties can move the Court for a decision to decide whether the mandate was terminated.
Kifayatullah Haji Gulam Rasool Vs Bilkish Ismail Mehsania
The circumstances of this case were that there was a mandate given to the arbitrator that he should complete the arbitration proceedings till 9.1.1999, in the consent order dated 9.11.1998, subject to the agreement between the parties. The consent order contained an agreement between the parties that the authority of the arbitrator shall come to an end on 9.1.1999. Subsequently, there was failure on the part of the arbitrator to act without undue delay and there was expiry of the time period. It was held that the mandate of the arbitral tribunal had stood terminated on 9.1.1999 by efflux of time.
Deepak Galvanising & Engineering Industries Pvt Ltd Vs Government of India
The Director General (DG) of Telecommunications, head of the Respondent Department was also appointed a named arbitrator as per the arbitration clause. When a dispute arose, notice as well as reminders were issued by the petitioner requesting him to refer the matter to the named arbitrator and inspite of repeated requests, there was no attempt on part of the DG to appoint the arbitrator as per their arbitration agreement and there was a lapse of 3 months.
It was held that the mandate of the named arbitrator should be deemed to have terminated as he failed to act without undue delay. Therefore, this application requesting the Chief Justice of the High Court for appointment of arbitrator was maintainable.
It was further clarified that Section 14(1)(a) provides that the mandate of an arbitrator shall terminate if he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay. In the present case, the claimant issued a notice on 17.1.1997 as well as two reminders later and waited till 28.4.1997 expecting some action on the respondents' part to refer the matter to the arbitrator, who is none other than the DG of the Telecommunications. However there was no response from the Respondents, therefore, the claimant requested the Chief Justice to appoint a new arbitrator u/s 11 (5), which is maintainable. Section 15(2) provides that where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the Rules that were applicable to the appointment of the arbitrator being replaced.
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