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2007 DIGILAW 495 (CAL)

KALPANA MAJUMDAR v. BIMAL KUMAR GHOSH

2007-07-05

SANJIB BANERJEE

body2007
( 1 ) IN these proceedings under Section 11 (6) of the Arbitration and conciliation Act, 1996, the petitioner seeks reference of the disputes under the agreement to a person other than the arbitrator named in the agreement. ( 2 ) THE arbitration clause provides as follows : - "any dispute, difference or question arising between the parties hereto with regard to this agreement, the same shall be referred to the arbitration of Sri Arun Kumar Sarkar, Advocate, Siliguri under the provisions of the Arbitration and Conciliation Act, 1996 and/or any other statutory modification and/or enactment relating thereto. " ( 3 ) IT is the petitioner's contention that disputes have arisen between the parties which are covered by the arbitration agreement and that the named arbitrator has disqualified himself from entering upon the reference relating to the disputes. The petitioner's contentions as to the named arbitrator being disqualified are found in her letter requesting an alternate arbitrator to be appointed. In such letter of April 13, 2007 the petitioner, inter alia, alleged that the disputes arose in connection with a booking at the newly-constructed building made by the daughter of the named arbitrator following which proceedings under Section 9 of the 1996 Act were instituted. The petitioner complains that the named arbitrator is interested in the matter and the named arbitrator had lodged a caveat. According to the petitioner, upon the named arbitrator having acted in such manner and being directly interested in the subject matter of the disputes, there was no question of such named arbitrator presiding over a reference. Upon such appreciation of the situation, the petitioner suggested the name of another person as arbitrator and required the other parties to the agreement to either concur in such appointment or suggest the name of any other arbitrator. ( 4 ) IT is the petitioner's case that despite contemporaneous receipt of such request of April 13, 2007, the other parties did not respond to it and as such the petitioner was entitled , under Section 11 (6) of the 1996 Act, to make this request to the Chief Justice's designate. ( 4 ) IT is the petitioner's case that despite contemporaneous receipt of such request of April 13, 2007, the other parties did not respond to it and as such the petitioner was entitled , under Section 11 (6) of the 1996 Act, to make this request to the Chief Justice's designate. This petition was filed on June 5, 2007, well beyond the period of 30 days that has now been read into Section 11 (6) of the Act on the strength of the time limit found in Section 11 (4) of the Act by the judgment of the Supreme Court reported at (2000)8 scc 151 (Datar Switchgears Ltd. v. Tata Finance Ltd. ). ( 5 ) THE petition has been resisted by the two sets of respondents. No affidavit has been called for. The respondents have claimed, without any material in support at this stage, that a reference has commenced and that the named arbitrator is presiding over the same. The respondents submit that inasmuch as there was an agreed procedure within the meaning of section 11 (2) of the 1996 Act, the request on the basis of which the petitioner founds the present proceedings, is no request within the meaning of Section 11 (6) of the 1996 Act. It is submitted on behalf of the respondents that the petition is not maintainable and no order can be made thereon. ( 6 ) SECTION 11 (6) of the Act permits a party to an arbitration agreement to make a request to the Chief Justice's designate upon any of the three conditions recognised in clauses (a), (b) and (c) thereof being complied with. For Section 11 (6) of the Act to apply, first there has to be an agreed procedure. Next such agreed procedure has to be breached whether on account of a person required to act under the procedure failing to act accordingly or on account of the matter not being carried forward by reason of difference of opinion between the parties to the arbitration agreement. For a party to make a valid request under any limb of Section 11 (6) of the act, such person cannot be in breach of the agreed procedure. ( 7 ) THE petitioner contends that in the instant case that there was no question of the named arbitrator being approached for the reference as he was virtually a party to the dispute. ( 7 ) THE petitioner contends that in the instant case that there was no question of the named arbitrator being approached for the reference as he was virtually a party to the dispute. The 1996 Act, particularly in view of section 5 thereof, leaves very little room for interference by the Court. If there is a likelihood of bias on the part of the arbitrator or the arbitral tribunal, there are obligations cast upon the arbitrator or the arbitral tribunal, inter alia, by Section 12 of the Act. If a party to a reference is aggrieved by the conduct of the arbitrator or the tribunal, there is remedy provided, whether during the pendency of the reference or at the conclusion thereof, to such party. But it is not open to a party to assume that the named arbitrator, by reason of his alleged nexus with the disputes, stands disqualified from presiding over the reference and therefore to presume that the agreed procedure under the arbitration agreement can no longer be adopted. For one, if the agreed procedure can no longer be adopted, Section 11 (6) of the act would not apply. Sub-sections 3, 4 and 5 of Section 11 of the Act apply to cases not covered by sub-section 2 thereof. Sub-section 2 applies in cases where the parties to the arbitration agreement have an agreed procedure. Sub-section (6) is in a continuation of sub-section 2 and would apply only to such cases where there is an agreed procedure but either there has been a breach of such procedure by a person other than the petitioner or by reason of the conduct of the appointing authority, the agreed procedure is arrested. ( 8 ) IN the present case there was no request made by the petitioner in terms of the agreed procedure and the request found in the letter of april 13, 2007 is no request which would entitle to the petitioner to approach the Chief Justice's designate under Section 11 (6) of the Act upon the expiry of a period of 30 days from the date of receipt of such alleged request by the addressee. The petitioner has referred to the judgments reported at 2006 (2) SCC 638 and 2007 (3) Supreme 1066 . Paragraph 5 of the first decision has been placed in support of the petitioner's contention that the present proceedings are maintainable. The petitioner has referred to the judgments reported at 2006 (2) SCC 638 and 2007 (3) Supreme 1066 . Paragraph 5 of the first decision has been placed in support of the petitioner's contention that the present proceedings are maintainable. Such paragraph of the first decision refers to the Datar Switchgears case in which the Supreme Court had read into Section 11 (6) of the Act the 30-day period that has not specifically found mention in such provision. Paragraph 5 of the report does not throw any light on the other aspect of the matter and the one which is the principal issue herein : that upon the petitioner not having acted in terms of the agreed procedure, no proceedings under Section 11 (6) of the Act could not be maintained. ( 9 ) IN the second judgment referred to by the petitioner, the facts are in a nut shell, as follows : An application under Section 11 of the 1996 Act was made by one of the parties to the arbitration agreement to the City Civil court at Hyderabad which has been designated by the Chief Justice of the andhra Pradesh High Court to receive applications under Section 11 (6) of the 1996 Act. The application for the constitution of a tribunal was made by a party to the agreement without following the agreed procedure under the arbitration agreement that required the Indian Council for arbitration to be the appointing authority. The Supreme Court held that upon the agreed procedure for appointment of an arbitrator in terms of the arbitration agreement not having been resorted to or exhausted, the party to an arbitration agreement could not approach the Chief Justice's designate under section 11 (6) of the 1996 Act for a request to name an arbitrator or the reference to be made. The judgment it appears, is in support of what the respondents urge herein and completely against what the petitioner seeks to canvass to sustain this petition. The petitioner's apprehension of the likelihood of the named arbitrator being biased may be real or unreal. It is not for the Court to look at such apprehension at this stage in proceedings which are not maintainable. If indeed, the petitioner has reasonable grounds for apprehension, the provisions of the 1996 Act do not leave the petitioner without any remedy. ( 10 ) THE petition is dismissed as not maintainable. It is not for the Court to look at such apprehension at this stage in proceedings which are not maintainable. If indeed, the petitioner has reasonable grounds for apprehension, the provisions of the 1996 Act do not leave the petitioner without any remedy. ( 10 ) THE petition is dismissed as not maintainable. In view of the interesting question raised the petitioner is not saddled with costs that is otherwise deserved. The allegations made in the petition should not be deemed to have been admitted by any of the respondents.