Absence Of Lack Of Independence & Impartiality: Rajasthan HC Upholds Arbitral Award Even After Non Disclosure Of Affiliation Of Arbitrator With Claimant’s Sister Concern
The Rajasthan High Court set aside the decision of the commercial Court that set aside the Arbitral award while noting that even though there was non disclosure of information about affiliation of arbitrator there was clear absence of lack of independence & impartiality.
The Court was hearing a Civil Miscellaneous Appeal directed against the order where the award passed by the Arbitral Tribunal was set aside.
The bench of Justice Pushpendra Singh Bhati and Justice Munnuri Laxman observed, “…appointment of one of the arbitrator as a legal counsel to one of the case of the sister-concern of the claimant-Company is not worse than allowing an employee to engage to act as an arbitrator.”
Advocate Deelip Kawadia appeared for the Appellant and Senior Advocate Sanjeev Johari appeared for the Respondent.
Brief Facts-
The claimant supplied coal to the Respondent’s plant under multiple purchase orders. A dispute arose over the quality and the Respondent alleged damages. The Tribunal awarded the claimant Rs. 40.39L with interest, dismissing the Respondent’s counter-claim. The Respondent challenged the award on the ground of bias due to an arbitrator's undisclosed affiliation with the claimant's sister company. The Commercial Court set aside the award. Hence, the present Appeal.
The Court observed, “The non-disclosed information is relevant to assess relevancy and magnitude of non-disclosed information. In case, non-disclosed facts and circumstance is a material, it may result disqualification or annulment.”
The Court further observed, “There can be a situation where an arbitrator may be independent but lack impartiality or vise versa. The impartiality is a more subjective concept when compare to independence. The independence is more objective concept, which may be straightforwardly ascertained by the parties at the outset of the arbitration proceedings in the light of the disclosures made by the arbitrator, whereas partiality would likely to arise during the arbitral proceedings.”
The Court noted, “clearly show the absence of lack of independence and impartiality”
The Court set aside the decision of the Commercial Court.
Finally, the Court allowed the Civil miscellaneous Appeal.
Cause Title: M/s Anik Industries Ltd v. M/s Shree Rajasthan Sintex Ltd (Neutral Citation: 2024:RJ-JD:41566-DB)
Appearance:
Appellant: Advocates Deelip Kawadia and Sidharth Mandawat
Respondent: Senior Advocate Sanjeev Johari, Advocates Shubhankar Johari and Lalit Parihar
