Approach “Court” As Defined U/S 2(1)(e) A&C Act: Telangana HC Holds That Application For Termination Of Mandate Of Arbitrator Is Not Maintainable Before It

The Court was hearing an application filed under Section 14(2) read with Section 11 and 15 of the Arbitration and Conciliation Act, 1996 seeking to terminate the mandate of the arbitrator and to appoint another arbitrator in his place.

The bench of Chief Justice Alok Aradhe mentioned the decision of the Supreme Court in Swadesh Kumar Agarwal v. Dinesh Kumar Agarwal and observed, “it is held that the application under Section 14 of the A&C Act is not maintainable before this Court. However, liberty is reserved to the applicant to approach the competent Court as defined under Section 2(1)(e) of the A&C Act and thereafter to file an application under Section 11(6) of the A&C Act depending on the outcome of the proceedings under Section 14 of the A&C Act.”

Advocate P. Pratap appeared for the Appellant and Advocate T. Bala Mohan Reddy appeared for the Respondent.

Brief Facts-

In the present case, the parties agreed to the construction of a commercial complex, which included an arbitration clause appointing Mr. Thoom Srinivas, Advocate, as the arbitrator. A dispute arose, and the applicant sent a notice. The arbitrator then scheduled a hearing to decide the arbitration proceedings schedule. However, the arbitrator failed to conduct any proceedings. The applicant filed a petition under Section 14 of the A&C Act, alleging a conflict of interest, as Mr. Srinivas was the respondent's in-house counsel and arbitrator in six other cases. The arbitrator did not address the application, leading the applicant to file an application before this Court.

The Court perused Section 2(1)(e) ‘Court’ as well as Section 14 ‘Failure or impossibility to act’ of the A&C Act and said, “it is evident that ‘Court’ means a Court of original jurisdiction in a District and includes a High Court in the exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration.”

The Court mentioned the decision in Swadesh Kumar Agarwal vs. Dinesh Kumar Agarwal and others quoted, “In a case where there is a dispute/controversy on the mandate of the arbitrator being terminated on the ground mentioned in Section 14(1)(a), such a dispute has to be raised before the “court”, defined under Section 2(1)(e) of the 1996 Act and such a dispute cannot be decided on an application filed under Section 11(6) of the 1996 Act.”

The Court noted that no material suggested that the arbitrator has withdrawn from his office as argued by the applicant. Therefore, according to the Court, the dispute has arisen within the meaning of Section 14(1)(a) of the A&C Act, which has to be dealt with by the Court within the meaning of Section 2(1)(e) of the A&C Act on termination of the mandate.

The Court did not Court express any opinion on the eligibility of the arbitrator to continue with the arbitration proceedings, as the question has to be dealt with by the appropriate forum in a proceeding, which may be instituted by the applicant under Section 14 of the A&C Act.

Finally, the Court disposed of the Arbitration Application.