Winsome International Limited vs New India Assurance Company Limited

The Court :- In this application under Section 14 of the Arbitration and Conciliation Act, 1996 (in short “the Actâ€) the claimant in the arbitral

proceeding has prayed for removal of the sole arbitrator and appointment of a fresh arbitrator in his place.

It appears that the petitioner has invoked the arbitration agreement between the parties after an order was passed by a learned Single Judge, Patna

High Court, in Civil Writ Jurisdiction Case No. 8575 of 2015, for realisation of its claim which had been admitted by the respondent, an insurance

company.

At the very outset, it may be noted that when a query was made with regard to the jurisdiction of this Court to entertain the present application, Mr.

Samit Talukdar, learned Senior Advocate appearing in support of the application submitted that as agreed between the parties, the arbitral sittings are

being held by the arbitrator in Kolkata and in view of the decision of the

Supreme Court in the case of Indus Mobile Distribution Private Limited vs. Datawind Innovations Pvt. Ltd. reported in (2017) 7 SCC 678, this Court

alone has the jurisdiction to entertain this application under the Act of 1996.However, no submission was made on behalf of the respondent to dispute

the above contention raised by the petitioner.

In the application, it is the case of the petitioner that although the arbitrator had made a disclosure as required under sub-Section (1) of Section 12 of

the Act but subsequently, during the arbitral proceeding it has discovered certain facts giving rise to a justifiable doubt as to the independence or

impartiality of the arbitrator.

Therefore, on January 12, 2018 the petitioner filed an application, under Sections 12 and 13 of the Act, before the arbitrator alleging the facts giving

rise to a doubt about his justifiability or impartiality. However, by a letter dated March 7, 2018 addressed to the petitioner, the arbitrator refused to

decide the said application. Urging these facts the petitioner has filed this application claiming the relief as mentioned above.

The fact that the arbitrator has refused to decide the application filed by the petitioner, underSections 12 and 13 of the Act,could not be disputed by the

respondent.From a reading of the provisions contained in Sections 12 and 13 of the Act of 1996, it is clear that when an application is filed by a party

challenging the arbitrator, the latter is duty bound to decide such application before further proceeding with the arbitral proceeding.

However, in the present case the arbitrator has not discharged such mandatory duty. Thus, this application is disposed of by directing the arbitrator to

decide the application filed by the petitioner underSections 12 and 13 of the Act, before further proceeding with the arbitration.

Needless to mention that any decision of the arbitrator rejecting the application of the petitioner under Sections 12 and 13 of the Act shall follow the

consequences provided in subSections (4) and (5) of Section 13 of the Act.

As prayed for by the parties, the arbitrator shall take up the application of the petitioner under Section 12 of the Act after giving two weeks’

notice to both the parties.There shall, however, be no order as to costs. Urgent certified website copies of this order, if applied for, be made available

to the parties subject to compliance with all requisite formalities.