Case Note & Summary
The petitioner, Gwaldas Mundra, filed an Arbitration Petition (L) No.863 of 2016 in the Bombay High Court under Section 12(5) read with Section 14 of the Arbitration and Conciliation Act, 1996. The petitioner sought a declaration that respondent nos.1 to 3 (the arbitral tribunal) were not eligible to act as arbitrators due to statutory disability under Section 12(5), and sought appointment of a retired judge of the court in substitution under Section 14(1) and (2). The respondents 4 and 5 raised a preliminary objection regarding maintainability, arguing that no provision of the Arbitration Act allowed such a petition. The petitioner's counsel argued that respondent nos.1 and 2, being relatives of the parties, were barred by Section 12(5) and that the non-obstante clause overrode the arbitration agreement. The court, after hearing submissions, held that the petition was not maintainable. The court reasoned that the proper remedy for challenging an arbitrator's eligibility before the award is made is under Section 13 of the Act, which requires the challenge to be raised before the arbitral tribunal itself. Section 14 applies only after the mandate of the arbitrator terminates, which had not occurred. Therefore, the petition was dismissed as not maintainable.
Headnote
A) Arbitration Law - Maintainability of Petition - Sections 12(5), 13, 14 Arbitration and Conciliation Act, 1996 - Challenge to Arbitrator Eligibility - The petitioner filed a petition under Section 12(5) read with Section 14 seeking declaration that arbitrators were ineligible due to statutory disability. The court held that the petition was not maintainable because the remedy for challenging an arbitrator's eligibility before the award is made lies under Section 13 of the Act, which requires the challenge to be raised before the arbitral tribunal itself. Section 14 applies only after the mandate of the arbitrator terminates, not before. The court dismissed the petition as not maintainable. (Paras 1-3)
Issue of Consideration
Whether an arbitration petition under Section 12(5) read with Section 14 of the Arbitration and Conciliation Act, 1996 is maintainable to challenge the eligibility of arbitrators before the arbitral tribunal has ruled on the issue.
Final Decision
The court dismissed the arbitration petition as not maintainable, holding that the remedy for challenging an arbitrator's eligibility before the award is made lies under Section 13 of the Act, not under Sections 12(5) and 14.
Law Points
- Section 12(5) challenge must be raised before arbitral tribunal under Section 13
- not by petition under Sections 12(5) and 14
- Section 14 applies only after mandate terminates
- Section 13 provides exclusive remedy for pre-award challenges to arbitrator eligibility.
Case Details
2016 LawText (BOM) (07) 64
Arbitration Petition (L) No.863 of 2016
Mr.Suryanarayanan i/by M/s.Dhiren Akbari for the petitioner; Mr.Prateek Seksaria a/w Mr.Simil Purohit a/w Mr.Punit Damodar a/w Ms.Nikita Vardhan i/by M/s.Kanga & Co. for the respondent nos.4 & 5.
Anand Rathi, Kailash Biyani, Pradeep Sancheti, N.M.Gupta, Pradeep Gupta
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Nature of Litigation
Arbitration petition challenging eligibility of arbitrators under Section 12(5) read with Section 14 of the Arbitration and Conciliation Act, 1996.
Remedy Sought
Petitioner sought declaration that respondent nos.1 to 3 were not eligible to act as arbitrators and appointment of a retired judge in substitution.
Filing Reason
Petitioner alleged that respondent nos.1 and 2 were relatives of parties and thus ineligible under Section 12(5) of the Arbitration Act.
Previous Decisions
The arbitral tribunal had rejected the petitioner's application under Section 12(5) by order dated 19 July 2016.
Issues
Whether an arbitration petition under Section 12(5) read with Section 14 of the Arbitration and Conciliation Act, 1996 is maintainable to challenge the eligibility of arbitrators before the arbitral tribunal has ruled on the issue.
Submissions/Arguments
Petitioner argued that respondent nos.1 and 2, being relatives of parties, were barred by Section 12(5) and the non-obstante clause overrode the arbitration agreement.
Respondents 4 and 5 raised preliminary objection that the petition was not maintainable under any provision of the Arbitration Act.
Ratio Decidendi
A challenge to the eligibility of an arbitrator under Section 12(5) must be raised before the arbitral tribunal under Section 13 of the Arbitration and Conciliation Act, 1996. A petition under Sections 12(5) and 14 is not maintainable before the mandate of the arbitrator terminates.
Judgment Excerpts
By this petition filed under Section 12(5) read with Section 14 of the Arbitration and Conciliation Act,1996... the petitioner has prayed for declaration that the respondent nos.1 to 3 i.e. arbitral tribunal were not eligible to assume office as arbitrators...
Mr.Seksaria, learned counsel appearing for the respondent nos.4 and 5 raises a preliminary objection about maintainability of this arbitration petition on the ground that under none of the provisions of the Arbitration Act, this petition can be entertained by this Court.
Procedural History
The petitioner filed an arbitration petition under Section 12(5) read with Section 14 of the Arbitration and Conciliation Act, 1996. The respondents 4 and 5 raised a preliminary objection regarding maintainability. The court heard submissions and dismissed the petition as not maintainable.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 12(5), 13, 14
