Author: Surya, 3rd Year student at RNB Global University, Bikaner.
Date of Decision: 12th April, 2021 & 13th April, 2021
Bench: Moushumi Bhattacharya
Original Copy: N/A
Statutes involved: Indian Arbitration and Conciliation Act, 1996 and amendment of 2016
Issue in question:
- Whether a Court can appoint an Arbitrator different to the one who has passed the impugned award for deciding the dispute between the award-debtor and the award-holder?
- The award debtor/Petitioner filed a petition for setting aside the award passed on 5 Oct. 2020. Petitioner wants that the matter must be decided by some other arbitrator and he challenged the award on the ground that he didn’t get an opportunity to represent himself before the arbitrator.
- While the respondent had contended that the petitioner got an opportunity to address the arbitrator.
- Under Section 34 of the Act, before setting aside the award the court has power to remand the matter to the same arbitrator who had delivered the award so that an opportunity could be given to remove the grounds for setting aside the arbitral award.
- The word “resume” used in Sectin34(4) makes it clear that the section is talking about the resumption of award by the same arbitrator who had decided the matter earlier.
- In this case both the parties have approached the court under Section 34.
- Some evidences were presented before the court that the arbitrator had presented the respondent in several cases as counsel and even became his consultant.
- By the Amendment of 2016 Section 12 was inserted to the Act of 1996 so that there should be no biasness. According to Section 12(1)(a) the arbitrator needs to disclose in writing his direct or indirect relation or interest in any of the parties or the subject matter of the dispute.
- And the facts of this case made it clear that the arbitrator had a relation with the respondent so the award must be set aside on this ground.
- The counsel of the Petitioner referred a case of Kinnari Mullick Vs Ghanshyam Das Damani, 2018. In this case the court set aside the impugned award and gave liberty to the parties to get remedy according to the law. And in one another case of Taruna Vaid Vs Rakesh Kumar: (2005) 12 SCC 235, the SC set aside the award and asked the Judicial authority in Delhi to appoint another arbitrator to settle the dispute.
- In the present case both the parties agreed to appoint a new arbitrator for settling the dispute.
- The Court set aside the award given by the arbitrator on 5 Oct. 2020 and held that a different arbitrator should be appointed to decide the claim of the petitioner.
- Justice Sahidullah Munshi, retired Judge of this Court, was appointed as the arbitrator. It was held that the arbitrator is at liberty to fix the remuneration and shall also be entitled to secretarial and other assistance which shall be borne equally by the parties.
- In this case it was rightly held by the court that another arbitrator should be appointed so that there should be no biasness in settling the dispute.
- Section 12 of the Act ensures that there should be no biasness on the part of the arbitrator as it made it necessary that the arbitrator need to disclose in writing his direct or indirect relation with any of the parties involved in the dispute. And in the present case the arbitrator had a relation with the respondent so it is violating the provisions of Section 12 of the Act.
- Although Section 34 is talking about the resumption of the proceedings of arbitration with the same arbitrator but in order to ensure that principles of natural justice must not be violated it was necessary to refer the matter to another arbitrator.