–Report by Umang Kanwat

Arbitration is the out-of-court resolution of a dispute by one or more (odd number) individuals chosen by both parties to serve as arbitrators. Any type of arbitration, regardless of its nature, has been legally recognised in India by placing it under the purview of the Arbitration and Conciliation Act. The arbitral award has the same legal force and effect as a judicial order or judgement. The present case of Union of India v Pushkar Paint Industries talks about the power or ability of the arbitrator.

Facts:

In the present case of Union of India v Pushkar Paint Industries, the Arbitral Tribunal’s mandate has been terminated under the current petition, which had been submitted under Section 14 of the Arbitration & Conciliation (Amended) Act. The Indian Army’s Ordnance Department, which is a division of the Ministry of Defence, was the petitioner in this case and the respondent in the arbitration procedures. Due to the respondent’s failure to produce the advance sample by the deadline specified in the contract, the petitioner suffered significant losses and was forced to revoke the previously approved Supply Order.

Petitioner’s Contentions:

The petitioner stated that the learned Arbitrator began pressuring the petitioner’s conducting officer to assist him in receiving the maximum amount as his fee, but the conducting officer retorted that it was beyond his purview. Furthermore, it ed claimed that the proceedings were not concluded by the learned Tribunal within the allotted year. The petitioner believed that the learned Arbitrator was biased towards the respondent/claimant and was operating in their favour.

He argued that the learned Sole Arbitrator failed to determine the case’s final fee because he continued to oppose the petitioner’s schedule of fee payment and insisted on paying under the Fourth Schedule of the Act. Allegedly the learned Arbitrator’s actions do not reflect well on the Office and instead, he was vehemently opposing the petitioner to further his interests. By bringing false accusations, he had attempted to harm the Conducting Officer’s career. He was not accurately capturing the events. In reality, he never documented the events as they happened but instead created fictitious orders later on according to his whims and fancies.

Therefore, a request was made that the learned Arbitral Tribunal’s mandate is terminated and replaced by the appointment of another Arbitrator.

Respondent’s Contentions

The petitioner’s claims that the arbitrator was demanding a high charge were unjustifiable in that he had been acting on his whims without ever getting the respondent’s permission to agree to any such fee structure. No agreement would be possible without the other party’s approval.
According to the Act, which does not make a distinction between Government and private parties and is equally applicable to both, the petitioner was not an exception.

It is submitted that the petition is without merit and is liable to be dismissed.

JUDGEMENT

The petitioner’s assertion was unfounded. It was plain that the petitioner was bringing frivolous objections, which are clearly against the statute’s requirements, to evade its obligation to pay the arbitrator’s fees. In the current instance, there is no evidence to suggest that the learned Arbitrator ever agreed to the petitioner’s proposed fee schedule, nor at any stage did he ever admit to it. According to the court, this claim made by the petitioner had no support. The petitioner in this matter, in the view of the court, was unable to show any of the grounds listed in Sections 14 or 15 of the Act. The current petition was determined to be without merit and dismissed with the remark that the learned Arbitrator may continue the arbitration and publish the Award following the Rules.

Conclusion

The dedication of the Indian government to turning India become a hub for arbitration and other ADR mechanisms is demonstrated by the several revisions made to the Arbitration and Conciliation Act to meet the demands of the constantly changing international business community. India can only strengthen its position as the global leader in rapid and effective dispute resolution by continuous adjustments based on lessons learned from the relevant commercial jurisdictions throughout the world and proper execution of those learnings concerning arbitration.

READ FULL JUDGEMENT: https://bit.ly/3I7Pp2p

CITATION: 2003/DHC/000894