R K AGRAWAL Vs. B P K JOHRI

JUDGEMENT

(1.) THESE writ petitions raise a short point, which is urged by Dr. R. B. Krishnan, learned Counsel for the petitioner, largely inspired by the English Legislation on the subject. The petitioner challenges the constitutional validity of Section 13 (4) and Section 13 (5) of the Arbitration and conciliation Act, 1996 (hereinafter referred to as 'act' ). To assail the statutory provision, in essence, he relies on the principle nemo debet esse judex in propria causa i. e. , no man can be judge in his own cause. And he draws sustenance for the challenge from the Model Law on international Commercial Arbitration. The relevant brief facts are as follows: the petitioners and respondents 2 to 4 who belong to the very same family partitioned their family business under a Memorandum of Settlement dated 30-3-1996, whereby while separating they agreed that the 1st respondent be the sole Arbitrator to arbiter any dispute that might arise amongst them in the event the dispute arising cannot be sorted out mutually. The disputes having arisen, the 1st respondent was called upon to arbiter the disputes. It is alleged that after the st respondent entered upon arbitration, the petitioners felt that circumstances existed that gave rise to justifiable doubts in their minds as to the independency and impartiality of the 1st respondent. Thereupon, alleging that the grounds referred to in Section 12 (3) (a) of the Act existed the petitioners on 6-11-1997 made initially an application to the Court of the Civil Judge, Bangalore, under Section 34 of the Act as AC No. 36 of 1997 seeking to change the Arbitrator. That application is pending and no interim orders have been made therein. Subsequently an application was moved before 1st respondent himself expressing their apprehensions and misgivings, as contemplated under Section 13 (2) of the Act. Since the 1st respondent has not withdrawn from his office, nor has the contesting respondents agreed to the challenge and as the remedy open to the petitioners in such circumstances is only availing an appeal under Section 34 of the Act by way of challenge as provided under Section 13 (4) of the Act after the making of the award by the Arbitrator, the petitioners contend that the absence of an appellate remedy renders the statute referred to above arbitrary and opposed to Article 14 of the Constitution of india. This in brief is the gravamen of the challenge.

(2.) DR. R. B. Krishnan, the learned Counsel in this behalf invites my attention to various provisions of the UNCITRAL Model on International Commercial Arbitration. According to him the Arbitration and Conciliation Act, 1996 has been framed in terms of the provision therein. As such he urges, that pari materia provisions should exist in the Indian Legislation. In this behalf he relies on Article 12 (2) and Article 13 (2) of the UNCITRAL Model. Article 12 (2) reads as under: "12 (2) An Arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality or independence, or if he does not possess qualifications agreed to by the parties. A party may challenge an Arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made". The Article is pari materia with Section 12 (4) of our Act read with Section 13 (3) and (4) of the act. Likewise Article 13 (3) is also referred to by the learned Counsel. It reads thus: "13 (3) If a challenge under any procedure agreed upon by the parties or upon the procedure of paragraph (2) of this Article is not successful, the challenging party may request, within thirty days after having received notice of the decision rejecting the challenge, the Court or other authority specified in Article 6 to decide on the challenge, which decision shall be subject to no appeal; while such a request is pending, the Arbitral Tribunal, including the challenged arbitrator, may continue the arbitral proceedings and make an award".

(3.) THE grievance of the petitioner is that there is no comparable provision in our statute which constitutes a different agency to consider the allegation relating to partiality etc. , and further confers a right of appeal against the decision of that authority. He also points out even when the arbitrator holds against bias etc. , there is no forum provided to challenge such a finding. The counsel points out that Section 13 (5) engrafted in this behalf does not completely provide for the redressal of the grievance of a party complaining of grievance contemplated in Section 12 (3) (a)of the Act. Section 13 does not confer a right to approach an independent agency for the adjudication of the allegations made against the Arbitrator but he himself is called upon to sit in judgment over the allegation against himself. In other words, he judges his own cause. He further contends that even after the said decision no appeal is provided directly to challenge the decision of the Arbitrator who declines to withdraw from the arbitration. Section 13 (4) and Section 13 (5)reads as under: "13 (4) If a challenge under any procedure agreed upon by the parties or under the procedure under sub-section (2) is not successful, the Arbitral Tribunal shall continue the arbitral proceedings and make an arbitral award. 13 (5) Where an arbitral award is made under sub-section (4), the party challenging the Arbitrator may make an application for setting aside such an arbitral award in accordance with Section 34". Article 13 (3) of UNCITRAL Model Law referred to supra, provides that if the challenge in similar circumstances is not successful then the aggrieved party may,-Request the Court of other authority specified in Article 6 to decide the challenge. The argument is that the English Legislation has kept this aspect in mind and has enacted section 24 in the (English) Arbitration Act, 1966. That section reads as under: