Sheel Nagu, J.Shri Arvind Dudawat, Advocate for the petitioner.

Shri Ankur Modi, Advocate for the respondents.

The writ jurisdiction of this court u/Art. 226 of the Constitution and/or in alternative supervisory jurisdiction of this court u/Art 227 of the Constitution is invoked seeking writ of certiorari or mandamus for terminating the mandate of sole Arbitrator, respondent No.2 herein conducting arbitral proceedings for resolving the dispute between the rival parties arising out of Agreement dated 7/12/2005.

2. Learned counsel for the rival parties are heard.

3. Learned counsel for the petitioner primarily submits that Arbitrator, respondent No.2 is biased. It is submitted that cross-examination conducted by the Arbitrator is not recorded on the very same day but behind the back of the petitioner and the petitioner is made to sign the order-sheet on the subsequent date of hearing which does not truly reflect the proceedings of the preceding date. It is further submitted that the Arbitrator is an employee of respondent No.1-Corporation. It is further submitted that no procedure has been specified by the Arbitrator for conduction of the proceedings in terms of section 19 of the Arbitration and Conciliation Act, 1996 for brevity the of 1996. It is also submitted that more than sufficient and due opportunity was afforded to the respondent No.1-Corporation to file statement of the defence. In this background, it is submitted that impartiality of the respondent No.2-Arbitrator is doubtful. It is submitted that this impelled the petitioner to prefer an application under section 12 of the 1996 Act, P/13 on the ground of the Arbitrator not being impartial and independent and thus seeking withdrawal of the Arbitrator. It is submitted that vide P/16 on 8/12/2015, the Arbitrator rejected the said application and declined to withdraw from the proceedings. Thus, this petition.

4. Learned counsel for the respondent No.1, on the other hand, opposed the petition by submitting that the petitioner has an alternative remedy to assail the Award of the Arbitrator under section 34 of the Act 1996 in terms of Section 13(5) of the 1996 Act. The instances of impartiality and lack of independence on the part of the Arbitrator are denied by submitting that it is the petitioner who is delaying the proceedings by making unnecessary repeated objections on every hearing. Thus, dismissal of the petition is sought.

5. The entire controversy involved herein revolves around the provisions of Sections 12 and 13 of the Act, 1996. Therefore for ready reference and convenience, both the provisions are reproduced below:-

"12 Grounds for challenge

(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances likely to give rise to justifiable doubts as to his independence or impartiality.

(2) An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall, without delay, disclose to the parties in writing any circumstances referred to in sub section (1) unless they have already been informed of them by him.

(3) An arbitrator may be challenged only if -

(a) Circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or

(b) he does not possess the qualifications agreed to by the parties.

(4) A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reason, of which he becomes aware after the appointment has been made.

13 Challenge procedure.

(1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator.

(2) Failing any agreement referred to in sub-section (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in subsection

(3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal. (3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.

(4) If a challenge tinder any procedure agreed upon by the parties or tinder the procedure under sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.

(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.

(6) Where an arbitral award is set aside on an application made under sub-section (5), the Court may decide as to whether the arbitrator who is challenged is untitled to any fees.

5.1 A plain reading of Section 12(3)(a) reflects that lack of independence and impartiality are the grounds on which appointment of an Arbitrator can be challenged. Since the parties to the Agreement have not agreed upon any procedure for challenging the Arbitrator appointed under the Agreement, Sections 13(2),(3),(4) and (5) of the Act, 1996 would apply for challenging the mandate of the Arbitrator who has suffered loss of confidence on the ground of lack of independence and impartiality, for which a written objection is required to be sent by the aggrieved party to the arbitral tribunal. On receipt of the said objection, Arbitrator under Section 13(3) either withdraws from his office voluntarily or on the basis of the consensus between the rival parties, failing which the arbitral tribunal is mandated by law to decide on the challenge.

5.2 In the instant case, the written objection P/13 has been considered and rejected by the Arbitrator vide P/16 on 8/12/2015. In such a situation, the provisions of Section 13(4) come into operation providing that in case of failure of the objection raised to the impartiality and independence of the Arbitrator, the Arbitrator is mandated by law to continue arbitral proceedings and proceed to render the arbitral award.

5.3 Thereafter the remedy available to the aggrieved party who raises an objection unsuccessfully is provided under Section 13(5) which enables the aggrieved party to challenge the Award made under Section 13(4) by praying for its setting aside under Section 34 of the 1996 Act.

5.4 It is admitted at the bar that the arbitral proceedings have not yet terminated as the same are pending and an award by the Arbitrator as contemplated by Section 13 (4) has not been passed till date.

6. It has been time and again held by the Apex Court while interpreting the scheme of 1996 Act that the judicial interference is permissible to the least. The decision of the Apex Court in the case of SBP & Co. v. Patel Engineering Ltd. And another (2005) 8 SCC 618 is worthy of reference, para 46 of which is relevant and reproduced thus:-

"46 The object of minimising judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High Court could be approached under Article 227 or under Article 226 of the Constitution against every order made by the Arbitral Tribunal. Therefore, it is necessary to indicate that once the arbitration has commenced in the Arbitral Tribunal, parties have to wait until the award is pronounced unless, of course, a right of appeal is available to them under Section 37 of theeven at an earlier stage."

6.1 The same view is reiterated by the Apex Court in the case of Associate Builders v. Delhi Development Authority (2015) 3 SCC 49. Relevant para 16 of the said decision is reproduced below:-

"16. It is important to note that the 1996 Act was enacted to replace the 1940 Arbitration Act in order to provide for an arbitral procedure which is fair, efficient and capable of meeting the needs of arbitration; also to provide that the tribunal gives reasons for an arbitral award; to ensure that the tribunal remains within the limits of its jurisdiction; and to minimise the supervisory roles of courts in the arbitral process."

6.2 Similar view as above was taken by the Apex Court in its recent decision rendered on 10/2/2017 in the case of M/s. Voestalpine Schienen GMBH v. Delhi Metro Rail Corporation Ltd. Reported in 2017 SCC OnLine SC 172. In this case, the Apex Court has reproduced para 31 of the decision in the case of Deptt. of Economic, Policy and Development of the City of Moscow v. Bankers Trust Co. reported in [2005 QB 207 : (2004) 4 ALL ER 746. Same is as follows:-

"31......Parliament has set out, in the Arbitration Act, 1996, to encourage and facilitate a reformed and more independent, as well as private and confidential, system of consensual dispute resolution, with only limited possibilities of court involvement where necessary in the interest of the public and of basic fairness."

6.3 In view of the above and the settled position of law as laid down by the Apex Court in the above cited decisions that bare minimum judicial interference should be made in arbitral proceedings and looking to the provisions of Section 13 of the 1996 Act, this court is of the considered view that the remedy availed by the petitioner u/Arts. 226/227 of the Constitution is unwarranted. The petitioner ought to avail the remedy of challenging the Award as and when made by the Arbitrator in terms of Section 13(5) of the 1996 Act.

6.4 Interference by the writ court in the pending proceedings before the Arbitrator would run contrary to one of the fundamental objectives of the 1996 Act, which is to give maximum possible freedom to the parties to the Agreement to resolve their dispute in terms of the Agreement by way of arbitration with least possible judicial interference.

7. In view of above, no case is made for interference by this court either u/Art. 226 or u/Art.227 of the Constitution of India.

8. Accordingly, the petition fails and is dismissed with no order as to cost.