Case Note & Summary
The petitioner, Quess Corp, filed a petition under Section 14 of the Arbitration and Conciliation Act, 1996, seeking termination of the mandate of the sole arbitrator, Mr. Amrut Joshi, appointed to adjudicate disputes arising from a Master Service Agreement dated 24/5/2017 between the petitioner and the respondent, Netcore Cloud Pvt. Ltd. The petitioner alleged that the arbitrator had previously acted as a lawyer for a group company of the respondent, which gave rise to justifiable doubts as to his independence and impartiality. The respondent opposed the petition, arguing that the petitioner had participated in the arbitration proceedings without objection and had waived its right to challenge the arbitrator. The Court examined the facts and found that the arbitrator had made a disclosure in the form of the Fifth Schedule, stating no direct or indirect interest in the subject matter. The petitioner did not raise any objection at the time of disclosure or during the preliminary hearings. The Court held that the petitioner failed to establish any justifiable doubts as to the arbitrator's independence or impartiality. Additionally, the Court noted that the petitioner had participated in the proceedings, including filing pleadings and attending hearings, without raising any objection, thereby waiving its right to object under Section 4 of the Act. The Court dismissed the petition, holding that the mandate of the arbitrator should not be terminated.
Headnote
A) Arbitration - Termination of Arbitrator's Mandate - Justifiable Doubts - Section 14, Arbitration and Conciliation Act, 1996 - The petitioner sought termination of the arbitrator's mandate alleging that the arbitrator had acted as a lawyer for the respondent's group company in the past, creating justifiable doubts as to his independence and impartiality. The Court held that the petitioner failed to establish any justifiable doubts, as the arbitrator had made full disclosure and the petitioner had participated in the proceedings without objection. (Paras 1-17)
B) Arbitration - Waiver of Right to Object - Section 4, Arbitration and Conciliation Act, 1996 - The Court held that the petitioner, by participating in the arbitration proceedings without raising any objection despite knowledge of the alleged grounds, had waived its right to object under Section 4 of the Act. (Paras 14-17)
C) Arbitration - Disclosure by Arbitrator - Fifth Schedule, Arbitration and Conciliation Act, 1996 - The arbitrator's disclosure in the form of the Fifth Schedule, stating no past or present interest in the subject matter, was held to be sufficient and not indicative of any bias. The Court noted that the petitioner did not challenge the disclosure at the time it was made. (Paras 3, 12-13)
Issue of Consideration
Whether the mandate of the sole arbitrator should be terminated under Section 14 of the Arbitration and Conciliation Act, 1996, on the ground that justifiable doubts exist as to his independence or impartiality.
Final Decision
The petition is dismissed. The mandate of the sole arbitrator is not terminated.
Law Points
- Termination of arbitrator mandate
- justifiable doubts as to independence or impartiality
- Section 14 of Arbitration and Conciliation Act
- 1996
- disclosure under Fifth Schedule
- waiver of right to object
- Section 4 of Arbitration and Conciliation Act
Case Details
2023 LawText (BOM) (01) 96
Arbitration Petition (L) No. 24705 of 2022 with Interim Application (L) No. 25653 of 2022
Mr. Vishal Nautiyal with Ms. Vidhi N. Sharda, Mr. Smit Shah i/b Mr. Aviral Dhirendra for the Petitioner; Mr. Mayur Khandeparkar with Prakhar Tandon and Irfan Khan i/b Sudha Dwivedi for the Respondent
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Nature of Litigation
Petition under Section 14 of the Arbitration and Conciliation Act, 1996 seeking termination of the mandate of the sole arbitrator.
Remedy Sought
The petitioner sought termination of the mandate of the sole arbitrator, Mr. Amrut Joshi, and his substitution.
Filing Reason
The petitioner alleged that the arbitrator had previously acted as a lawyer for a group company of the respondent, creating justifiable doubts as to his independence and impartiality.
Previous Decisions
The arbitrator was appointed by order dated 23/11/2022 under Section 11(6) of the Act. The arbitrator made a disclosure in the form of the Fifth Schedule. The petitioner participated in the arbitration proceedings without raising any objection until filing the present petition.
Issues
Whether the mandate of the sole arbitrator should be terminated under Section 14 of the Arbitration and Conciliation Act, 1996 on the ground of justifiable doubts as to his independence or impartiality.
Whether the petitioner waived its right to object by participating in the arbitration proceedings without raising any objection.
Submissions/Arguments
The petitioner argued that the arbitrator had acted as a lawyer for a group company of the respondent, which gave rise to justifiable doubts as to his independence and impartiality.
The respondent argued that the petitioner had participated in the arbitration proceedings without objection and had waived its right to challenge the arbitrator under Section 4 of the Act.
Ratio Decidendi
The court held that the petitioner failed to establish any justifiable doubts as to the arbitrator's independence or impartiality. The arbitrator's disclosure was sufficient, and the petitioner's participation in the proceedings without objection constituted a waiver of the right to object under Section 4 of the Arbitration and Conciliation Act, 1996.
Judgment Excerpts
By the present petition, the petitioner seek relief of terminating the mandate of sole Arbitrator, Shri Amrut Joshi appointed as a Arbitrator to adjudicate the disputes that had arisen between the parties out of the ‘Masters Service Agreement’ dated 24/5/2017.
The petitioner did not agree to the appointment of the named arbitrator, and this resulted in the respondent approaching this Court under sub-section (6) of Section 11 of the Arbitration and Conciliation Act.
The proceedings commenced before the learned Arbitrator after a date was fixed for preliminary hearing, and he made disclosure in the form mentioned in Vth Schedule of the Arbitration and Conciliation Act, 1996, inter alia, stating that he had no direct or indirect, past or present interest in relation to the subject matter in dispute, whether financial, business, professional or other kind which would give rise to justifiable doubt as to the independence or impartiality.
Procedural History
The respondent invoked the arbitration clause and proposed Mr. Amrut Joshi as sole arbitrator on 16/1/2020. The petitioner did not agree, leading to the respondent filing a petition under Section 11(6) of the Act. By order dated 23/11/2022, the Court appointed Mr. Amrut Joshi as sole arbitrator. The arbitrator made a disclosure in the form of the Fifth Schedule. The petitioner participated in the proceedings, including filing pleadings and attending hearings. Subsequently, the petitioner filed the present petition under Section 14 seeking termination of the arbitrator's mandate.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 14, Section 4, Section 11(6), Fifth Schedule
