- (1.) The petitioner is the claimant in an arbitral dispute between it and the opposite party no.1. The opposite party no.2 is in seisin of such dispute as the sole arbitrator. According to the petitioner, the opposite party no.2 after being appointed as an arbitrator did not in terms of the legislative mandate contained in Section 12(1) of the Arbitration and Conciliation Act, 1996 (hereafter the Act) disclose to the parties the circumstances likely to give rise to justifiable doubts as to his independence and impartiality. This was despite the fact that the opposite party no.2 had been an officer attached to the Durgapur Steel Plant of the opposite party no.1 for a substantially long period of time. Once called upon by the petitioner, the arbitrator responded. From the response it transpired that the opposite party no.2 had been appointed arbitrator by the Durgapur Steel Plant in as many as seven arbitrations after his retirement, of which three were still continuing. Enquiry made by the petitioner revealed that : i) That the opposite party no.2 is being unusually favoured by the opposite party no.1 with a large number of arbitrations as their nominee arbitrator in references to arbitration. The pending references are obviously expected by the opposite party no.1 to conclude with the awards being passed in its favour. ii) It has become widely known in business and trade circles particularly organizations that transact business with the opposite party no.1 that the opposite party no.2 is pliable to the dictates of the opposite party no.1 and after cursorily concluding the references made to him makes and publishes awards which result in substantial benefits to the opposite party no.1. iii) The opposite party no. 2 is earning a substantial amount of remuneration as arbitrator in the references made to him by the opposite party no. 1. Between 2000 and 2009 he has been appointed as arbitrator in 7 arbitrations each of which have and/or had a huge stake involved therein. The substantial remuneration earned and/or being earned by the opposite party no.2 from these references made to him by the opposite party no.1 makes it difficult for the opposite party no.2 to give any award against the opposite party no.1. The large number of references made to the opposite party no.2 operates as an inducement rendering it difficult for him to make any award against the opposite party no.1. iv) Doubt regarding lack of integrity of the opposite party no.2 is manifest because during the currency of the arbitration with Balaji Industrial Products Ltd., the opposite party no.2 had accepted financial inducement/rewards masquerading as consultancy services and had ultimately been left with no alternative but to resign.
(2.) In such circumstances, the petitioner on or about July 2, 2009 filed an application under Sections 12 and 13 of the Act (hereafter the challenge application) before the opposite party no.2 challenging his authority to continue as arbitrator. It was claimed that during proceedings before the opposite party no.2, it became manifest that he did not have the capacity or faculty to conduct the same. He appeared to be wholly incapable of comprehending the legal issues that arose out of the matter and when, in course of argument such legal issues were adverted to, he was completely flummoxed. The opposite party no.2, surprisingly, was also found incapable of dictating the minutes of the meetings. Despite protest of the petitioner, the representative of the opposite party no.1 dictated the minutes and the opposite party no.2 merely signed the same. In fine, the petitioner could sense that fair and proper proceedings could not be conducted by the opposite party no.2. In such circumstances, the petitioner filed two further applications before the opposite party no.2.
(3.) In the first of the two applications, dated July 30, 2009, the following relief was claimed: a. An order be made to the effect that all minutes of the arbitral proceedings shall be prepared and all orders and/or directions passed in the same shall be made by Mr. A.C. Mondal himself in the presence of the parties at the conclusion of each day s sitting of the arbitration. b. An order be made granting the claimant leave to cross-examine Mr. A.C. Mondal in connection with the claimant s application under Section 12 and 13 of the Arbitration and Conciliation Act, 1996 questioning his lack of independence and impartiality and consequently his ability to act as arbitrator. ;