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13 February 2022, Sunday

2 years ago

Appointment by a party of the same arbitrator in multiple arbitrations not absolutely barred by Entry 22 Fifth Schedule provided the arbitrator was independent and impartial in prior arbitrations: Delhi High Court

17 January 2022 | Panipat Jalandhar NH 1 Tollway (P) Ltd. v. National Highways Authority of India | Arb P No 820 of 2021 | Delhi High Court | Suresh Kumar Kait J | 2022 SCC OnLine Del 108

Could disputes be referred to a tribunal already in existence to decide questions relating to the same agreement? Was Justice (Retd.) GP Mathur’s (“GPM”) appointment by NHAI hit by Entry 22 Fifth Schedule because NHAI had nominated him as an arbitrator in three cases within the past three years?

A tribunal, of which GPM was a part, was constituted to decide questions relating to suspension and termination of the parties’ agreement. Just a month later, the petitioner raised more disputes. NHAI nominated GPM again and wanted to constitute the same tribunal. Objecting to the respondent’s nomination, the petitioner applied for the appointment of NHAI’s arbitrator. If accepted, it would be GPM’s fifth appointment for NHAI (including one made by the court on NHAI’s behalf).

Answering yes to the first question of consolidation, citing Gammon India 2020 SCC OnLine Del 659, the court found and ruled:

  1. There could be multiple arbitrations if the cause of action continues or arises after the constitution of a tribunal. The petitioner could not establish that cause of action arose before the suspension/termination of the agreement. constituting another tribunal “would lead to multiple observations and findings.”
  2. Proceedings in the prior arbitration might be delayed with the new reference. Still, the tribunal members are well conversant with the facts, and it would enable expedition of the (overall) dispute. Also, there would be no confusion or complexity in the outcome.

On the related argument based on Entry 22 Fifth Schedule, relying on Supreme Court’s HRD 2018 SCC OnLine, the court ruled that the entry does not create an absolute bar on the appointment of the same person in multiple cases provided that the person was independent and impartial on earlier occasions. The petitioner did not suggest that GPM was earlier not independent or impartial. Its argument was based only on the number of appointments.

An additional argument that GPM’s disclosures were not complete was also rejected.

Read the decision here.

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Categories: Appointment of Arbitrators | Bias | Composite Adjudication | Composite Reference | Consolidation of Claims | Disclosure by Arbitrator | Dispute | Fifth Schedule | HRD Corporation | IFFCO | Independence and Impartiality of Arbitrator | Joinder of Claims | Multi-Contract Dispute | Parallel Arbitral Hearings | Parallel Arbitral Proceedings | Parallel Arbitrations | Section 11 ACA | Seventh Schedule

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