M/S. HINDUSTAN VEHICLES LTD. Vs. GIRILAL AND CO.

JUDGEMENT

(1.) The Next contention of the petitioners is that Prakash Chand Jain was disqualified from acting as an arbitrator by reason of his relationship with one of the partners of respondents No. 1 firm. Now, it is an admitted fact that respondents No. 1 firm consists of a father and his two sons as partners, and the wife of the arbitrator and the wife of one of the sons are sisters. In my opinion, this relationship was likely to cause an apprehension in the mind of the petitioners that the arbitrator would not be free from bias. Prakash Chand Jain was a sole arbitrator unilaterally appointed. An arbitrator should be above reproach. The petitioners would be justified if they apprehended that there was a strong probability that the arbitrator would be biased to such an extent as to be incapable of fairly and honestly giving a decision. It has been held in the case of Satyendra Kumar Vs. Hind Cons. Ltd. ,(1951) 54 Bom. LR. 37 , in the judgment of Chagla C J- that (p. 38):

(2.) It has been contended by Dr. Naik on behalf of respondents No. 1 that the petitioners were barred from urging that the sole arbitrator was disqualified by reason of his relationship on account of estoppel, waiver or acquiescence. In this case as the petitioners were disputing the jurisdiction of the arbitrator on the ground that the disputes between the parties were not covered by the arbitration agreement, they neither submitted to the arbitration, nor attended before the arbitrator, nor took any part in the arbitration proceedings. If as a result of the notice of relationship contained in the undated letter the Petitioners had agreed to go to the arbitration of Prakash Chand Jain or had submitted to his jurisdiction or taken any part in the arbitration proceedings without any protest on the ground of relationship disclosed to them, the question of estoppel, waiver or acquiescence may have arisen. In my opinion, there can be no question of estoppel, waiver or acquiescence in the relationship of an arbitrator to one of the parties to arbitration in a case where the party seeking to disqualify the arbitrator, has neither agreed to the nomination of the said arbitrator, nor submitted to his arbitration, nor appeared before him and taken any part in the arbitration proceedings before him without protest. Something more active than mere abstention from attending before an arbitrator and taking part in proceedings before him is required to preclude a party from challenging the appointment of an arbitrator on the ground that he was related to the other party. [The rest of the judgment is not material to this report.] Solicitors for petitioners-Bhaishankar Kanga, and Girdharlal. Award set aside.