TMI Blog2023 (2) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... which states that no arbitrator should be involved in any manner with one of the parties to the dispute or a partner with a lawyer or law firm appearing in the arbitration, or representing the law firm or lawyer personally. Thus, there is no need to further deliberate upon the issue, as the observations made in case of Sheetal Maruti Kurundwade are agreed upon, there is no clash of interest of the Arbitrator because as a counsel, he had represented the Advocate representing the opposite party - the objection cannot survive and has been rightly turned down by the learned Arbitrator. The present petition, seeking termination of the mandate of the arbitrator, therefore, cannot be entertained and is dismissed. - ARBITRATION PETITION (L) NO. 24705 OF 2022 WITH INTERIM APPLICATION (L) NO. 25653 of 2022 IN ARBITRATION PETITION (L) NO. 24705 OF 2022 - - - Dated:- 17-1-2023 - BHARATI DANGRE, J. For the Petitioner : Mr. Vishal Nautiyal with Ms. Vidhi N. Sharda, Mr. Smit Shahi/b Mr. Aviral Dhirendra. for the Respondent: Mr.Mayur Khandeparkar with Prakhar Tandon and Irfan Khan i/b Sudha Dwivedi. JUDGMENT:- 1. By the present petition, the petitioner seek rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.1399/NB/2017, captioned as Bank of India vs. Mandhana Industries Ltd. 5. The aforesaid information took the petitioner by surprise, and according to him, this was not disclosed by the Arbitrator, during the preliminary hearing held by him or any time thereafter. On gathering further information, it was revealed that the Arbitrator has been representing counsel for the respondent in several other matters before various forums, including the High Court of Mumbai and the NCLAT and certain orders to that effect are placed on record by the petitioner. 6. It is in this background I have heard the counsel for the petitioner, who would vehemently argue that the sole arbitrator, in the wake of the aforesaid, has become ineligible to continue as an arbitrator, as per Section 12(5) r/w Schedule VII of the Act. The submission is, he is de jure and de facto unable to perform his functions, and since the issue of ineligibility goes to the root of the appointment, he would lack inherent jurisdiction to proceed further, which would enable a party to file an application u/s.14(2) to the Court to decide on termination of his/her mandate. The submission is, the appointment of Mr.Amrut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest in any of the parties or in relation to the subject matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality; and (b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of twelve months. Explanation (1) and (2) appended to the said section read thus: Explanation 1 The grounds stated in the Fifth Schedule shall guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an arbitrator. Explanation 2 The disclosure shall be made by such person in the form specified in the Sixth Schedule . The appointment of an Arbitrator can be challenged only if circumstances exist that give rise to justifiable doubt as to his independence or impartiality or he does not possess the qualifications agreed to, by the parties. 8. The challenge procedure is set out in Section 13 and is postulated in sub-section (2) of Section 13 which read thus :- 13(2) Failing an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the respondent informed the Tribunal that the communication dated 17/10/2022 is not an application u/s.12 read with Section 13 of the Arbitration and Conciliation Act, and when specifically asked what is the ground for recusal, he substituted his request of termination of mandate with the one of keeping the proceedings in abeyance as he has already filed petition u/s.14(2) before the High Court. 12. The Arbitrator, in his order dated 14/11/2022, succinctly recorded the objection in the following words : 5. Mr.Dhirendra submits that I am de-jure and defacto unable to perform my functions or act as an arbitrator in the present proceedings on account of the provisions of Section 12(5) r/w Schedule VII of the Act. Mr.Dhirendra submits that I am de-facto ineligible to act as an arbitrator and that my appointment itself is null and void. He relied upon certain orders passed by the National Company Law Tribunal ( NCLT ) as well as the National Company Law Appellate Tribunal ( NCLAT ) as well as the Hon ble Bombay High Court to show that I have appeared as a counsel along with Mr.Prakhar Tandon and Mrs.Sudha Dwivedi in several matters Mr.Dhirendra pointed out that Mr.Tandon is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and throughout the Arbitral proceedings, any circumstances come into existence, which were not informed by him, at an earlier point of time. It is only in these circumstances, his appointment shall be red flagged and subjected to challenge. There is a procedure prescribed for raising a challenge in both the situations and which is contemplated u/ s.13, specifically sub-section (2) and sub-section (3) and in this contingency, it is open to the Arbitrator to decide the challenge. 16. When I have perused the communication addressed by the respondent to the Arbitrator and from reading of the order passed by the Arbitral Tribunal, what is evident is, the petitioner never raised a challenge as contemplated u/s.13 of the Arbitration and Conciliation Act, but he requested the arbitrator to keep the proceedings in abeyance as he has already instituted the proceedings, seeking termination of his mandate u/s.14 of the Act. The Arbitrator has rightly taken note of this disharmony and conferred a liberty upon the petitioner to file an application u/s.12 r/w Section 13, if at all he wanted to challenge his appointment. 17. The learned counsel for the petitioner has vehemently relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 13(4) and make an award. It is only after such award is made, that the party challenging the arbitrator s appointment on grounds contained in the Fifth Schedule may make an application for setting aside the arbitral award in accordance with Section 34 on the aforesaid grounds. It is clear, therefore, that any challenge contained in the Fifth Schedule against the appointment of Justice Doabia and Justice Lahoti cannot be gone into at this stage, but will be gone into only after the Arbitral Tribunal has given an award. Therefore, we express no opinion on items contained in the Fifth Schedule under which the appellant may challenge the appointment of either arbitrator. They will be free to do so only after an award is rendered by the Tribunal . 18. In the peculiar situation, where the objection raised by the petitioner deserve any consideration, is no more res-integra as it has been put to rest in case of Sheetal Maruti Kurundwade (supra), where the position for counsel is highlighted in the following words :- 24 The emphasized portions make it plain that the association of the arbitrator must be proximate, not remote. Schedule V contemplates various scenarios. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey perform the same functions at every stage: a counsel may lead at one stage, and at another may take second chair to a senior. None of this is backed by statute, but hinges on traditions of long standing. This independence manifests itself in different ways. We have seen counsel withdrawing -- sometimes in court itself -- because their clients give them fresh instructions contrary to previous ones conveyed to court. In Mumbai at least, counsel from the same chambers often oppose each other in court and there is never a doubt raised about their professional independence. We have, too, in this city an acceptance of a junior counsel being briefed against the senior whose chamber he or she has joined. No one sees this as anything but the fiercest independence; indeed, seniors consider it a badge of honour to be opposed (the more vigorously the better) by their own juniors, for there is perhaps no better indicator of a briefing attorney's confidence in the capability, integrity and independence of a junior counsel than to field him against his own senior. 19. Referring to a situation where the counsel having accepted a brief from a particular attorney, Advocate on record or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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