- The appellants Shriram Transport Finance Co. Ltd filed this appeal before the Delhi High Court against the judgment of the learned District Judge which allowed a petition seeking to set aside the Arbitral Award dated 16.07.2019 on the grounds that there was non-compliance with Section 21 of the Arbitration and Conciliation Act, 1996.
- It was found that the arbitrator appointed by the appellant company to resolve disputes with the respondent Mr. Narender Singh, had not made requisite disclosure as required by Section 21 of the Act.
- Section 21 of The Arbitration And Conciliation Act, 1996 is regarding the commencement of arbitral proceedings. It states that unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence only on the date on which a request for that dispute to be referred to arbitration is received by the respondent.
- It was claimed by the respondent that the arbitrator did not give him any opportunity and did not send him notice or information about the dates of July 4 and July 16, and that the proceedings were carried out in a hasty manner.
- The Court affirmed that Section 12(1)(a) of the Act, clearly states that any person who is approached in connection with his possible appointment as an Arbitrator “shall” disclose in writing any circumstances which are likely to give rise to justifiable doubts as to his independence or impartiality. These were guiding factors in deciding the independence and impartiality of the arbitrator.
- It was found that the learned arbitrator who had been authorised to deal with the dispute between the parties had similarly been authorised by the appellant on earlier occasions. The respondent was not aware of this past association.
- The appellant company also did not dispute the fact that the arbitrator has acted on several occasions for them. This was also not disclosed to the parties beforehand.
- It was concluded that there has been non-compliance on the part of the appellants with Section 21 of the Act and the arbitrator’s disclosure as mandated in Section 12 of the Act was also absent.
- Thus, any award rendered by such an arbitrator, as such, cannot be sustained and had to be set aside as rightly judged by the District Judge’s impugned judgement. Accordingly the appeal was found to be misconceived and was dismissed.
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