Delhi High Court - Orders
Rs Seven Lifestyle Pvt Ltd vs Seven Hills on 16 March, 2021
Author: Vibhu Bakhru
Bench: Vibhu Bakhru
$~18
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (T) (COMM.) 7/2021
RS SEVEN LIFESTYLE PVT LTD ..... Petitioner
Through: Ms Harneet Kaur and Mr Rishi
Vohra, Advocates.
versus
SEVEN HILLS ..... Respondent
Through: Mr Rajat Aneja with Mr Manu
Padalia, Advocates.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 16.03.2021
1. The petitioner has filed the present petition under Section 14(2) of the Arbitration and Conciliation Act, 1996 (hereafter the 'A&C Act'), inter alia, praying that the mandate of the Arbitrator survives in view of the express consent accorded by the respondent to be continued to the said proceedings.
2. The parties had entered into a Retailership Agreement on 14.11.2017. The Respondent terminated the Agreement on 22.10.2018. Concededly, disputes arose between the parties in respect of the said Agreement. The petitioner filed a petition under Section 9 of the A&C Act seeking interim measures of protection. In the said proceedings, while granting ad-interim orders, the learned court had directed the petitioner to take recourse to Arbitration.
3. The petitioner issued a notice dated 01.02.2019, invoking the Signature Not Verified Digitally Signed By:DUSHYANT RAWAL Arbitration Clause and appointed the learned arbitrator to adjudicate the disputes between the parties. Thereafter, on 04.02.2019, the petitioner sent a notice confirming the appointment of the learned Arbitrator
4. The learned Arbitrator accepted the appointment and issued a notice for holding a preliminary hearing on 23.02.2019. The respondent did not participate in the preliminary hearing on 23.02.2019 and contended that the invocation of arbitration was premature. The said contention was not accepted and the learned arbitrator fixed the next date of hearing on 09.03.2019.
5. On 09.03.2019, the learned counsel who appeared for the respondent entered appearance and also agreed to the timeline as fixed for conducting the arbitral proceedings. The petitioner filed its Statement of Claim on 18.03.2019 and the Respondent filed its Statement of Defence on 16.04.2019. The petitioner filed the Rejoinder on 09.05.2019 and with that, the filing the pleadings were completed.
6. The parties filed the affidavit of admission and denial of documents before the Arbitral Tribunal during the hearing held on 25.05.2019. The matter was adjourned on a few occasions as the Respondent changed its counsel.
7. The petitioner filed its list of witnesses along with the affidavit of evidence of its witness (CW-1) on 14.09.2019. The Respondent filed an affidavit of evidence of its witness (RW-1) on 16.11.2019. The examination- in-chief of CW-1 was recorded on 16.11.2019 and he was cross examined on 26.11.2019.
8. Since the time for making the award was expiring on 22.02.2020, the parties extended the mandate of the Arbitral Tribunal for a further period of Signature Not Verified Digitally Signed By:DUSHYANT RAWAL three months on 26.11.2019.
9. The examination in chief of RW-1 was recorded on 21.12.2019 and he was partly cross-examined on that date. Thereafter, the Arbitral Tribunal adjourned the matter to 11.01.2020 for further cross examination. On 11.01.2020, the parties jointly requested for an adjournment to verify the invoices and the arbitral proceedings were adjourned to 25.01.2020
10. Thereafter, on 25.01.2020, the respondent filed an application under Section 12 of the A&C Act seeking recusal of the learned Sole Arbitrator.
11. It is the petitioner's case that since the respondent had consented to the learned Arbitrator continuing with the arbitral proceedings, it was now precluded from now raising the said objection.
12. The learned Arbitrator considered the said application. The Ld. Arbitrator was of the view that the Respondent had impliedly consented to her appointment as an Arbitrator by filing the Statement of Defence and had also expressly consented to her mandate by agreeing to enlarge the time for making the award. However, the Learned Arbitrator felt that the controversy remains and it would be apposite to get a clarification from the court.
13. It is in the aforesaid context that the petitioner has filed the present petition.
14. The learned Arbitrator has recorded in her order dated 23.03.2020 that allegations of bias that were made in the initial application were withdrawn by the learned counsel at the hearing held on 21.02.2020. The learned counsel deleted Paragraph no. 2 of its application where such allegations were made.
15. Mr Aneja, learned counsel appearing for the respondent also states that as far as the impartiality and independence of the Arbitrator is Signature Not Verified Digitally Signed By:DUSHYANT RAWAL concerned, there is no challenge to the same. He, however, submits that since learned Arbitrator was appointed by the petitioner, the respondent had some apprehension on that ground.
16. In the facts and circumstances of this case, it is admitted that (a) the respondent had consented to continue the arbitral proceedings before the learned Arbitrator and the learned Arbitrator had acted with due despatch;
(b) the respondent had not objected to the appointment of the Arbitrator at any stage prior to 25.01.2020 and had fully participated in the proceedings; and (c) there is no allegation of any likelihood or bias on the part of the learned Arbitrator.
17. Undisputedly, there is merit in the respondent's contention that in view of the decision of the Supreme Court in Perkins Eastman Architects DPC and Anr. v. HSCC (India) Limited: 2019 SCC OnLine SC 1517 and as followed by this Court in Proddatur Cable TV Digi Services v. Citi Cable Network Limited : (2020) 267 DLT 51, the unilateral appointment of an Arbitrator by any party is not impermissible. Further, in the case of a challenge to the Arbitral Tribunal under Section 12(5) of the A&C Act, the parties are entitled to file an application under Section 14 of the A&C Act in this regard. (See: HRD Corporation (Marcus Oil and Chemical Division) v. GAIL: (2018) 12 SCC 471)
18. However, in the present case, there is no dispute that respondent had expressly agreed to extend the mandate of the Learned Arbitrator on 26.11.2019; that is, after the disputes had arisen.
19. However, to obviate any further objections in this regard and keeping the stage of the proceedings in this case, this Court considers it apposite to direct that the learned Arbitrator so appointed by the petitioner be construed Signature Not Verified Digitally Signed By:DUSHYANT RAWAL as appointed by this Court. It is so directed.
20. The petition is disposed of with the aforesaid terms.
VIBHU BAKHRU, J MARCH 16, 2021 MK Signature Not Verified Digitally Signed By:DUSHYANT RAWAL