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2023 (4) TMI 315 - HC - Indian LawsUnilateral appointment of the Arbitrator, without express agreement - Whether the petitioners participated in the arbitral proceedings or after having the knowledge of the appointment of the sole Arbitrator, failed to challenge the said appointment in terms of Section 13 of the Act, and whether the same would deprive the rights of the petitioners to challenge the said appointment of the Arbitrator in terms of the provisions of Section 34 of the Act for the violation of provisions of Section 12(5) of the Act? HELD THAT:- The answer is no. The petitioners can certainly entitled to challenge under Section 34 of the Act, if there is any violation of the provisions of the Act. Even though, the petitioners have not challenged the unilateral appointment of the sole Arbitrator under Section 13 of the Act, it would not take away the rights of the petitioners to challenge under Section 34 of the Act. Even if there is any participation by the petitioners in the arbitral proceedings, the petitioners still have the right to challenge about the violations of the provisions of Section 12(5) of the Act under Section 34 of the Act. Any violation of provisions of the Act, is amount to against the public policy of India. In the present case, apart from appointing the Arbitrator unilaterally by the respondent, the Arbitrator had also failed to send any notice about the hearing to the petitioners and the respondent had also failed to furnish the claim statement to the petitioners. Therefore, the petitioners did not have any opportunity to file the counter and contest the matter. Even if the petitioners have filed the counter and considered, the present award is liable to be set aside for the violations of the provisions of Section 12(5) of the Act. The present award is liable to be set aside on the ground of unilateral appointment of arbitrator. Further in the present case, it appears that the award has been passed without giving any opportunity to the petitioners and therefore, the award is suffered with the violation of Principles of Natural Justice also. This Court is of the view that the present award is not sustainable under law and the same is liable to be set aside and it is against the public policy of India as it violates the principles of natural justice - the Award dated 30.08.2021 is set aside. This Arbitration Original Petition is allowed.
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