Case Note & Summary
The judgment concerns five arbitration petitions filed by different companies (Faridabad Metal Udyog Pvt. Ltd., Hindustan Wires Limited Ltd., Universal Cylinders Ltd., Supreme Cylinders Ltd., and J.B.M. Industries Ltd.) against the sole arbitrator, Mr. Anurag Deepak, and Bharat Petroleum Corporation Ltd. (BPCL). The petitioners had entered into contracts with BPCL for supply of cylinders, which contained arbitration clauses. Disputes arose, and BPCL appointed Mr. Anurag Deepak, an Executive Director of BPCL, as the sole arbitrator. The petitioners challenged this appointment under Section 11 of the Arbitration and Conciliation Act, 1996, arguing that the arbitrator being an employee of BPCL created a bias and that the appointment was invalid. The court examined the arbitration clauses and the circumstances of appointment. It noted that the arbitration clause allowed BPCL to appoint an arbitrator, and the petitioners had participated in the arbitration proceedings without objection initially. The court held that mere employment does not automatically disqualify an arbitrator; there must be evidence of actual bias or a reasonable apprehension of bias. The petitioners failed to provide any material to show bias. The court also considered that the arbitrator was a senior officer and would act independently. Consequently, the court dismissed all five petitions, upholding the appointment of the arbitrator.
Headnote
A) Arbitration - Appointment of Arbitrator - Section 11 of Arbitration and Conciliation Act, 1996 - Challenge to appointment of sole arbitrator who was an employee of respondent - Petitioners challenged appointment on ground of bias - Court held that mere employment does not automatically disqualify an arbitrator; there must be material to show actual bias or reasonable apprehension of bias - Petitioners failed to provide such material - Appointment upheld (Paras 1-30).
Issue of Consideration
Whether the appointment of a sole arbitrator who is an employee of one of the parties to the dispute is valid under the Arbitration and Conciliation Act, 1996, and whether such appointment gives rise to justifiable doubts as to the arbitrator's independence and impartiality.
Final Decision
All five arbitration petitions are dismissed. The appointment of Mr. Anurag Deepak as sole arbitrator is upheld.
Law Points
- Arbitration
- Appointment of Arbitrator
- Bias
- Section 11 of Arbitration and Conciliation Act
- 1996
- Independence and Impartiality of Arbitrator
