Case Note & Summary
The Petitioner, M/s. Nagpur Sical Gupta Road Terminal Limited, a joint venture company, entered into a Concession Agreement dated 20 April 2007 with the Respondent, Maharashtra Airport Development Company Limited (MADC), for development, operation and management of a Road Terminal in the MIHAN Project Area at Nagpur. The Agreement contained an arbitration clause (Clause 13.2) naming Mr. R.C. Sinha, the then Managing Director of the Respondent, as the sole arbitrator. On 4 October 2011, the Respondent terminated the Agreement. The Petitioner disputed the termination by letter dated 22 November 2011 and objected to the appointment of Mr. R.C. Sinha as arbitrator on grounds of reasonable apprehension of bias, requesting an independent arbitrator. The Respondent, by letter dated 26 April 2012, without addressing the bias allegations, appointed Dr. P.S. Meena, Principal Secretary, GAD (Civil Aviation), Government of Maharashtra, as the sole arbitrator. In July 2012, the Petitioner filed an Arbitration Application under Section 11 of the Arbitration and Conciliation Act, 1996 (Arbitration Application (L) No. 870 of 2012) seeking appointment of an independent arbitrator, and also filed a Petition under Section 9 of the Act (Arbitration Petition (L) No. 655 of 2012) seeking interim protective reliefs. On 10 July 2012, this Court passed an ex parte interim order in the Section 9 petition. The Petitioner then filed the present Arbitration Petition (L) No. 1112 of 2012 under Section 9 seeking recall of that order and also seeking appointment of an independent arbitrator. The Court considered the submissions and held that the interim order dated 10 July 2012 was passed without hearing the Petitioner and without considering the Petitioner's objection to the named arbitrator. The Court recalled the order and directed that the Section 9 petition and the Section 11 application be heard afresh. The Court also noted that the appointment of Dr. P.S. Meena by the Respondent did not cure the defect of bias, as the Respondent unilaterally appointed him without addressing the Petitioner's concerns. The Court directed that the Section 11 application be considered for appointment of an independent arbitrator.
Headnote
A) Arbitration Law - Interim Relief - Recall of Order - Section 9, Arbitration and Conciliation Act, 1996 - Petitioner sought recall of interim order passed ex parte - Court held that the order was passed without hearing the Petitioner and in ignorance of the Petitioner's objection to the named arbitrator - Held that the order is recalled and the matter is remitted for fresh consideration (Paras 1-5). B) Arbitration Law - Appointment of Arbitrator - Bias - Section 11, Arbitration and Conciliation Act, 1996 - Petitioner objected to the named arbitrator on ground of reasonable apprehension of bias - Respondent appointed another officer as arbitrator - Court held that the appointment by the Respondent without addressing bias allegations does not cure the defect - Held that an independent arbitrator should be appointed (Paras 2-4).
Issue of Consideration
Whether the interim order dated 10 July 2012 passed in Arbitration Petition (L) No. 655 of 2012 should be recalled and whether an independent arbitrator should be appointed under Section 11 of the Arbitration and Conciliation Act, 1996.
Final Decision
The Court allowed the petition, recalled the order dated 10 July 2012, and directed that Arbitration Petition (L) No. 655 of 2012 and Arbitration Application (L) No. 870 of 2012 be heard afresh. The Court also directed that the Section 11 application be considered for appointment of an independent arbitrator.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996
- Section 11 of the Arbitration and Conciliation Act
- Recall of interim order
- Bias of arbitrator
- Appointment of independent arbitrator
