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Showing contexts for: section 81 of arbitration in Reliance Communications Limited vs The State Of Bihar & Ors on 19 June, 2018Matching Fragments
. Thereafter, the proceeding continued and finally culminated in the impugned order dated 06.02.2018 (Annexure-6).
7. Mr. Rajendra Narain, learned Senior counsel appearing on behalf of the petitioner, has challenged the impugned order dated 06.02.2018 as being wholly arbitrary as well as without jurisdiction. Apart from adverting to various circumstances to allege that the Council was proceeding with a prejudiced attitude against the petitioner, he has also submitted that the Council inherently lacked jurisdiction to conduct the arbitration proceeding, and as such the impugned arbitration award is non est in law. It is submitted that Section 18(2) of the MSMED Act deals with conciliation and specifically adopts the provisions of Sections 65 to 81 of the Arbitration Act. A perusal of Section 80 of the Arbitration Act discloses that there is a complete bar, in absence of an agreement to the contrary, for a conciliator to act as an arbitrator in any arbitral or judicial pr oceeding in respect of a dispute that has been the subject of conciliation proceedings. It is submitted that the Council having acted as conciliator was statutorily barred from sitting as arbitrator as was done in the instant case, and this has dealt a fatal blow to the arbitration award. It is submitted that no doubt the Council has been invested with the power to act as conciliator under Section 18(2) and as arbitrator under Section 18(3) of MSMED Act, but these provisions are easily reconciled with Section 80 to mean that the Council can sit as arbitrator only in a situation where it does not conduct conciliation itself but refers the conciliation to an institution or centre providing alternate dispute resolution as contemplated under Section 18(2) of the MSMED Act. Reliance is placed on Harshad Chiman Lal Modi vs. DLF Universal Ltd. and another, (2005) 7 SCC 791.
12. Reliance has been placed on behalf of the respondents on a judgment of Division Bench of the Madras High Court in the case of M/s Eden Exports Company Vs. Union of India [W.A. No. 2461 of 2011 and analogous cases decided on 20.11.2012] wherein it has been held as follows -
"21. A cursory reading of the aforesaid provision makes it clear that a conciliator could not act as an arbitrator. It is no doubt true that Sections 18(2), 18(3) and 18(4) have given dual role for the Facilitation Council to act both as Conciliators and Arbitrators. According to the learned counsel for the appellants, the Facilitation Council should not be allowed to act both as Conciliators and Arbitrators. This contention, though prima facie appears to be attractive, it is liable to be rejected on a closer scrutiny. Though the learned counsel would vehemently contend that the Conciliators could not act as Arbitrators, they could not place their hands on any of the decisions of upper forums of law in support of their contentions. As rightly pointed out by the learned single Judge, Section 18(2) of MSMED Act has borrowed the provisions of Sections 65 to 81 of the Arbitration and Conciliation Act for the purpose of conducting conciliation and, therefore, Section 80 could not be a bar for the Facilitation Council to conciliate and thereafter arbitrate on the matter. Further the decision of the Supreme Court in (1986) 4 SCC 537 (Institute of Chartered Accountants of India v. L.K. Ratna), on this line has to be borne in mind. One should not forget that the decision of the Facilitation Council is not final and it is always subject to review under Article 226 of the Constitution of India and, therefore, the appellants are not left helpless.
21. The Division Bench of the Madras High Court in M/s Eden Exports Company Vs. Union of India (supra) has affirmed the judgment of the learned Single Judge which contains detailed reasons for the view taken therein. It would therefore be apposite to refer to the judgment of the learned Single Judge from which the relevant paragraphs may be extracted hereinbelow -
"34. The other argument made by the learned Advocate General and by Mr. T. Mohan was that under the provisions of Sections 18(2), 18(3) and 18(4), the Facilitation Council was given dual role of conciliator in terms of Sections 65 to 81 of the Arbitration and Conciliation Act, 1996 and thereafter it was conferred with the jurisdiction to act as Arbitrators. This goes against the norms of fairness. Under Section 80 of the Arbitration and Conciliation Act, 1996, it has been made clear that conciliator cannot act as an arbitrator. Section 80(a) reads as follows:
These rules provide for alternate dispute resolution by outside agencies and not by the court itself. It thus depends on what is contemplated by the specific provisions enacted in the law and in the present case, Section 80 of the Arbitration Act prohibits dual function by the Council.
(b) If Section 18(2) of the MSMED Act borrows the provisions of Sections 65 to 81 of the Arbitration Act, I do not perceive any reason for inferring that Section 80 of Arbitration Act is intended to be excluded and that it would not constitute a bar for the Council to arbitrate on the matter.