Madhya Pradesh High Court
Shaileshkumar Gupta vs Shailesh Mishra on 6 December, 2017
1 A.C. No.76/2017
A.C. No.76/2017
Indore, Dated : 6.12.2017
Shri M.L. Pathak, learned counsel for the applicant.
Shri Navneet Kishore Verma, learned counsel for the
respondent.
Heard with consent.
By this application under Section 11 of the Arbitration and Conciliation Act, the applicant has made a prayer for appointment of an independent arbitrator.
The case of the applicant is that the partnership deed dated 19.2.2005 was executed containing the Clause 15 as the Arbitration Clause and thereafter the partnership was reconstituted on 19.2.2005 vide deed Annexure P/2 containing the same arbitration clause. The dispute had arisen between the parties in respect of maintenance of account, therefore, the respondent had sent the legal notice dated 6.3.2017 for giving consent to appoint named arbitrator Shri Naveen Pandya for resolving the dispute. The applicant had sent the reply on 20.3.2017 opposing the proposal and thereafter had sent the communication dated 11.6.2017 to the proposed arbitrator doubting his impartiality and when he had received the notice dated 10.7.2017 from the office of the arbitrator, he had filed the present AC.
The respondents have filed their reply denying the plea taken in AC and taking the stand that the arbitration proceedings are in progress before the named arbitrator, and the named arbitrator has also given the declaration in terms of the Arbitration Act, therefore, at this stage the application cannot be entertained.
2 A.C. No.76/2017By way of rejoinder the applicant has reiterated his stand about appointment of arbitrator.
Having heard the learned counsel for the parties and on perusal of the record, it is noticed that execution of the arbitration agreement between the parties is not in dispute. Clause 15 of the agreement provides as under:-
^^15- ;g fd Hkkxhnkjksa ds e/; Hkkxhnkjh dh 'krksZa ds laca/k es dksbZ fookn mRiUu gksrk gS rks mls iap QSlys ls fuiVk;k tk;sxkA nksuks Hkkxhnkjksa dh lgefr ls Jh uohu th i.M;k iap jgsaxs rFkk buds }kjk fn;k x;k fu.kZ; lHkh Hkkxhnkjksa ij ca/kudkjd gksdj ikyuh; jgsxkA** In view of the aforesaid clause Shri Naveenji Pandya is the named arbitrator. Along with the reply of the respondent the declaration of the named arbitrator in terms of the requirement of the Act has been enclosed. The record reflects that the present AC has been filed on 26.7.2017 after the commencement of the proceedings before the arbitrator, which according to the respondent had commenced on 11.4.2017. The applicant had sent the communication dated 11.6.2017 to the arbitrator raising a doubt about his integrity and impartiality. Learned counsel for the respondent has made a statement at the Bar on instructions that the said objection of the applicant has been rejected by the arbitrator.
Section 13 of the Act provides for the procedure for challenging an arbitrator as under:-
"13. Challenge procedure.--(1) Subject to sub-section(4), the parties are free to agree on a procedure for challenging an arbitrator.
(2) Failing any agreement referred to in sub-
section (1), a party who intends to challenge an 3 A.C. No.76/2017 arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section(3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal.
(3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.
(4) If a challenge under any procedure agreed upon by the parties or under the procedure under sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.
(5) Where an arbitral award is made under sub-section(4), the party challenging the arbitrator may make an application for setting aside such an arbitral award in accordance with section 34.
(6) Where an arbitral award is set aside on an application made under sub-section (5), the Court may decide as to whether the arbitrator who is challenged is entitled to any fees."
In terms of sub-section(4) if the challenge to an arbitrator is not successful, the arbitral tribunal is to continue with the arbitral proceedings and make an award and thereafter under sub-section (5) the concerned party has an option to challenge the award under Section 34 and in such a challenge the Court even has the option to decide the entitlement of the arbitrator for the fees.
In view of the aforesaid scheme of the Act, on rejection of the challenge to an arbitrator, it is not open to a party to approach the court for appointment of a new arbitrator under Section 11 of the Act, but it has to participate in the arbitral 4 A.C. No.76/2017 proceeding and challenge the award under Section 34 if the need so arises.
In the present case also the arbitration proceedings before the named arbitrator are going on and the petitioner's challenge to the arbitrator has been rejected, therefore, at this stage the applicant's application for appointing another arbitrator under Section 11 is not maintainable and is hereby rejected.
C.C. as per rules.
(Prakash Shrivastava) Judge trilok/-
Trilok Digitally signed by Trilok Singh Savner DN: c=IN, o=High Court of Madhya Singh Pradesh, ou=Administration, postalCode=452001, st=Madhya Pradesh, 2.5.4.20=5e17c79b9e2cc6e5f119cb23d 5c02e921be96a009cd5a4db8c4390772 9e8e93c, cn=Trilok Singh Savner Savner Date: 2017.12.13 16:36:15 +05'30'