V K DEWAN Vs. DELHI JAL BOARD

JUDGEMENT

(1.) IN this application under Section 12,13,14 and 15 of the Arbitration and Conciliation Act, 1996, (hereinafter be referred to as 'Act' only) the petitioner prays for termination of the mandate of the sole arbitrator-respondent No.4 and appointment of another Arbitrator in his place, preferably a retired Judge. The facts relevant for the disposal of this application, briefly stated, are that on 27.8.2002 in AA No. 212/2001, under Section 11 of he Act, the Court appointed respondent No.4 to be an Arbitrator in place of an earlier Arbitrator who was appointed by the respondent. According to the petitioner the respondent No.4 has been meeting the Chief Executive Officer of the respondent and convassing for his engagement in Delhi Jal Board with a view to augment/supplement his income. According to the petitioner on 5.5.2003 the respondent no.1 appointed the respondent No.4 as Consultant (Training) for a period of six months which fact was not disclosed by the Arbitrator to the petitioner and as such circumstances exist to give rise to a justifiable doubt as to the independence and impartiality of the Arbitrator-respondent No.4. Some other averments have also been made to plead that the Arbitrator is taking sides with the respondent and has failed to pass an interim award in respect of admitted amount by the respondent. The petitioner alleges that although the respondent No.4 has declined to accept the post offered by respondent No.1 but still a doubt remains that he would not be acting impartially and independently. The respondent No.1 has filed a reply controverting the pleas raised by the petitioner and has denied that respondent No.4 has any bias against the petitioner or is not impartial. It is stated that the petitioner is making frivolous allegations against the Arbitrator who has not accepted the assignment offered by respondent No.1. After hearing the petitioner in person and learned counsel for respondent no.1, this Court finds that under Section 12 of the Act the appointment of an Arbitrator can be challenged and his mandate terminated if clear and convincing circumstances exist to raise justifiable doubt as to his independence or impartiality. The mere fact that an Arbitrator has been offered some assignment being a retired Officer cannot give rise to any justifiable doubt in regard to his independence and impartiality. Even serving officers of the Government, PSUs, and statutory authorities are appointed arbitrators and in a large number of cases their Awards are found going in favour of the parties opposite to their own departments. Mere suspicion cannot be made a ground for concluding that the Arbitrator would not act fairly or impartially. Only a well founded and justifiable doubt about the Arbitrator covered by Section 12 of the Act can be made a ground for terminating the mandate of an Arbitrator. Had the Arbitrator-respondent No.4 accepted the assignment offered by respondent No.1, the petitioner could contend and the Court might have accepted the plea that the petitioner entertains a justifiable doubt about his independence or impartiality but since the Arbitrator has declined the assignment there remains no good ground for holding so. The mere fact that the Arbitrator has not passed an interim Award or has been trying to expedite the proceedings are no grounds to hold that the Arbitrator is not independent or impartial. The Courts should be always slow in terminating the mandate of an appointed Arbitrator as it results in delay of the arbitral proceedings. It is true that an Arbitrator should scrupulously avoid giving any impression that he is not independent or impartial and must disclose to the parties the circumstance, if any, referred to in Clause (1) of Section 12 of the Act but the Courts while considering such a petition should objectively examine as to whether there is any real danger of bias and the complainants apprehensions are well founded. If at the end of the day an Award is passed by the Arbitrator and a party is in a position to show that it cannot be sustained in view of grounds available under Section 34 of the Act, objections can be raised against the Award. If interim award has not been passed in favour of the petitioner, the amount may be awarded by the Arbitrator while passing the final Award and the petitioner may be awarded interest for the delay in the payment of the amount. Under the new Act the Courts must stick to the policy of minimum intervention in arbitral proceedings. No party should be allowed to indulge in dilatory tactics. It appears that the petitioner is having groundless doubts against the Arbitrator who has not misconducted in any manner and as such there are no grounds for terminating the mandate as prayed. The Judgement in Vishnu Promotors Pvt. Ltd. Vs. Holtec Cooperative Group and others of this Court reported in 2001(2) Arb.LR 495(Delhi) does not lay down any principle of law on the subject as in the said case, the Arbitrator was changed without going into the controversies in regard to the conduct of the Arbitrator. The petition, therefore, stands dismissed. The interim stay of the arbitral proceedings stands vacated.