Case Note & Summary
The applicant, Hitech Plast Limited (formerly Clear Mipak Packaging Solutions Ltd.), initially filed Summary Suit No. 2492 of 2012 in the Bombay High Court for recovery of amounts from the respondent, HO Plast Private Limited, under an agreement dated 17 September 2008. By consent order dated 15 September 2014, a sole arbitrator was appointed to decide all disputes. During proceedings, at a hearing on 16 February 2016, the counsel for the respondent made personal and derogatory remarks about the arbitrator's competence and ability to understand submissions. Despite the arbitrator's request to withdraw the remarks, the counsel refused and insisted that the arbitrator withdraw. Consequently, the arbitrator withdrew from the proceedings. The applicant then filed the present arbitration application under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of a new arbitrator. The Court allowed the application, appointing a new sole arbitrator, and strongly condemned the counsel's conduct, noting that such behavior is becoming increasingly prevalent and must be addressed urgently and stringently to preserve the integrity of arbitration.
Headnote
A) Arbitration - Appointment of Arbitrator - Section 11 of Arbitration and Conciliation Act, 1996 - Withdrawal of Arbitrator due to Counsel's Misconduct - The Court considered an application for appointment of a new arbitrator after the previous sole arbitrator withdrew following derogatory remarks by counsel for the respondent about the arbitrator's competence. The Court held that such conduct is unacceptable and must be addressed stringently to maintain the integrity of arbitration proceedings. (Paras 1-3)
B) Arbitration - Conduct of Counsel - Professional Ethics - The Court noted that the counsel for the respondent made personal and derogatory remarks about the arbitrator's competence and refused to withdraw them despite requests. The Court emphasized that such behavior undermines the arbitration process and requires urgent and stringent action. (Paras 3-4)
Issue of Consideration
Whether a new arbitrator should be appointed after the previous sole arbitrator withdrew due to derogatory remarks made by counsel for one party, and what measures are needed to address such unprofessional conduct.
Final Decision
The Court allowed the arbitration application and appointed a new sole arbitrator to adjudicate the disputes between the parties. The Court also strongly condemned the conduct of the respondent's counsel and emphasized the need for stringent action against such unprofessional behavior.
Law Points
- Arbitration
- Appointment of arbitrator
- Withdrawal of arbitrator
- Misconduct of counsel
- Section 11 of Arbitration and Conciliation Act
- 1996
Case Details
2016 LawText (BOM) (10) 85
Arbitration Application (L) No. 849 of 2016
Mr. Ashish Kamat, along with Mr. Shyam Kapadia, Mr. Pradeep Mane and Mr. Jay Zaveri, instructed by M/s. Crawford Bayley & Co., for the Applicant. Mr. Jaydeep Mitra, instructed by Mr. Rajeev Talasikar, for the Respondent.
Hitech Plast Limited (erstwhile Clear Mipak Packaging Solutions Ltd.)
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Nature of Litigation
Application for appointment of a new arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, after the previous sole arbitrator withdrew due to derogatory remarks made by counsel for the respondent.
Remedy Sought
The applicant sought appointment of a new sole arbitrator to adjudicate disputes arising from an agreement dated 17 September 2008.
Filing Reason
The previous sole arbitrator withdrew from the proceedings after counsel for the respondent made personal and derogatory remarks about the arbitrator's competence and refused to withdraw them.
Previous Decisions
By order dated 15 September 2014, a sole arbitrator was appointed with consent of parties to decide disputes in Summary Suit No. 2492 of 2012.
Issues
Whether a new arbitrator should be appointed after the previous arbitrator withdrew due to counsel's misconduct.
What measures are needed to address unprofessional conduct by counsel in arbitration proceedings.
Submissions/Arguments
The applicant argued that the arbitrator's withdrawal was necessitated by the respondent's counsel's derogatory remarks, and a new arbitrator should be appointed to continue the proceedings.
The respondent did not oppose the appointment of a new arbitrator.
Ratio Decidendi
The court held that when an arbitrator withdraws due to misconduct of counsel, a new arbitrator should be appointed under Section 11 of the Arbitration and Conciliation Act, 1996, to ensure the continuation of arbitration. The court also emphasized that derogatory remarks against an arbitrator undermine the integrity of arbitration and must be addressed stringently.
Judgment Excerpts
The present Arbitration Application has been moved in light of the withdrawal of the previous sole arbitrator appointed by this Court. The circumstances which have given rise to the withdrawal are most unfortunate and are becoming increasingly prevalent in matters before this Court and are required to be addressed urgently and stringently.
The Counsel for the Counter Claimant (Ho Plast) instead made a personal and derogatory remark about the Sole Arbitrator, specifically as to the Sole Arbitrator’s competence and ability to understand the very brief and cryptic submission being made by the Counsel for the Counter Claimant.
Procedural History
The applicant filed Summary Suit No. 2492 of 2012 for recovery of amounts. By consent order dated 15 September 2014, a sole arbitrator was appointed. The arbitrator withdrew after counsel for the respondent made derogatory remarks on 16 February 2016. The applicant then filed Arbitration Application (L) No. 849 of 2016 for appointment of a new arbitrator.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11
