SYMBIOSIS LAW SCHOOL, PUNE

INTERNAL ASSESSMENT – ADRS

IRAC ON - Worlds Window Infrastructure & Logistics Pvt. Ltd. Vs. Central
Warehousing Corporation

1.      Parties to the case: Worlds Window Infrastructure & Logistics Pvt. Ltd.
(PETITIONER) vs. Central Warehousing Corporation (RESPONDENT)

2.      Citation of the case: [ARB.P. 437/2018] O.M.P. (T) (COMM.) 45/2018

3.      Coram of the Case: Justice Navin Chawla

4.      Details of the student:

NAME: ADITYA KHANNA

PRN: 17010125135
DIVISION: B (BA.LLB(HONS.))
CONTACT NUMBER: 6306764227
EMAIL ID: 17010125135@SYMLAW.AC.IN

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CONTENT

S
FACTS OF THE CASE...........................................................................................................3
ISSUES......................................................................................................................................3
PROCEDURAL HISTORY....................................................................................................4
RULE.........................................................................................................................................4
ANALYSIS................................................................................................................................5
CONCLUSION.........................................................................................................................7

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 FACTS OF THE CASE

Petitioner has filed two petitions seeking appointment of sole arbitrator, stay of arbitration
proceedings fixed by the purported arbitrator and termination of mandate fixed by the
purported arbitrator. The disputes between the parties are in relation to the Agreement dated
16.02.2005 executed between them where the Petitioner was appointed by the Respondent as
a Strategic Alliance Management Operator (SAMO) for equipping, marketing, operation and
maintenance of its Inland Container Depot at Loni, Ghaziabad. The said Agreement contains
an Arbitration Agreement in form of Clauses 20 and 21. The above clauses have clearly
stated that if the dispute is not resolved by the Joint Committee and the Advisory Committee,
then an arbitrator shall be appointed by the MD, Respondent company. After the dispute
arose, Respondent appointed Mrs. Sheila Sangwan as an Arbitrator to adjudicate the said
disputes. Subsequently petitioner filed a civil suit claiming that the disputes have already
been adjudicated by the chairman of Respondent and another arbitration proceedings was not
maintainable. After numerous legal proceedings, the High Court of Allahabad lifted all
restraint on continuation of arbitration proceedings and dismissed the claims of the Petitioner.

ISSUES
1) Whether appointment of the Arbitrator by the Respondent is against the principles of
natural justice ?
2) Whether the relationship between the Respondent and Arbitrator fall within the ambit
of Entry 1 or Entry 12 of the Seventh Schedule of the Arbitration and Conciliation
Act, 1996 ?
3) Can the mandate of the Arbitrator be terminated if the disclosure is not in the form as
described by the Sixth Schedule ?
4) Whether the Arbitrator was proceeding with a bias against the Petitioner ?
5) Is the contempt Petitioner filed by the Petitioner maintainable ?

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 PROCEDURAL HISTORY
Petitioner claimed that the disputed have been adjudicated by the Chairman of the
Respondent and an award dated 20.11.2014 has already bene passed. Petitioner filed a civil
suit claiming that another arbitration proceeding is not maintainable. The respondent filed
two applications but both were dismissed by the Civil Judge through orders dated 15.03.2016.
the respondent being aggrieved by the orders filed two appeals which were allowed by
District Judge through order dated 24.02.2018. Allahabad High court dismissed the petitions
filed by the Petitioner through order dated 31.05.2018. Against the Allahabad High Court the
present petitioners were filed by the Petitioner.

RULE

Arbitration and Conciliation Act, 1996

 Section 11(6) - Where, under an appointment procedure agreed upon by the parties,
— (a) a party fails to act as required under that procedure
(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected
of them under that procedure
(c) a person, including an institution, fails to perform any function entrusted to him or
it under that procedure, a party may request to take the necessary measure, unless the
agreement on the appointment procedure provides other means for securing the
appointment1.
 Section 12- Grounds for challenge: When a person is approached in connection with
his possible appointment as an arbitrator, he shall disclose in writing any
circumstances,—
(a) such as the existence either direct or indirect, of any past or present relationship
with or interest in any of the parties or in relation to the subject-matter in dispute,
whether financial, business, professional or other kind, which is likely to give rise to
justifiable doubts as to his independence or impartiality; and
(b) which are likely to affect his ability to devote sufficient time to the arbitration and
in particular his ability to complete the entire arbitration within a period of twelve
months2.

1
Section 11, Arbitration and Conciliation Act, 1996
2
Section 12, Arbitration and Conciliation Act, 1996

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  Sixth Schedule of the Act: It basically prescribes the format in which the Arbitrator
is required to disclose details regarding his name, contact information, past
experiences, ongoing arbitration proceedings and circumstances like relationship
between the parties3.
 Seventh Schedule of the Act (only the concerned extract i.e. entry 1 and 12) : The
concerned entries state the relationship of the arbitrator with one of the parties in
detail for example, employee-employer, etc4.

ANALYSIS

 The Delhi High Court rejected the Petitioners submissions and reliance upon the
judgements, TRF Limited v. Energo Engineering Projects Limited5 and Voestalpine
Schienen GMBH v. Delhi Metro Rail Corporation Limited6.

In the case of Bhayana Builders Pvt. Ltd. v. Oriental Structural Engineers Pvt. Ltd. : It
was held that the amendment to the Arbitration and Conciliation Act, 1996 made by the
Amendment act does not take away the power vested in one of the parties in the
Arbitration Agreement to appoint an arbitrator provided that the said appointment
shouldn’t violate the provisions Fifth or the Seventh Schedule of the Act. The petitioner
has further admitted that the proceedings in the judgement have not been stayed.
Therefore the submissions made by the Petitioner do not have any merit7.

 The Ministry of Consumer Affairs, Food and Public Distribution had suggested four
names for the appointment of arbitrator. The suggestion was made after the Petitioner
filed complaint against appointment of Managing Director of Respondent as the
arbitrator. The court held that the Petitioner had no objections if any of the other three
persons other than Mrs. Sheila Sangwan had been appointed as Arbitrator. The court
concluded that the complaint was made only because Mrs. Sheila Sangwan was appointed
at first instance and similar complaint would have been made if one of the other three
names had been appointed.
3
Sixth Schedule, Arbitration and Conciliation Act, 1996
4
Seventh Schedule, Arbitration and Conciliation Act, 1996
5
(2017) 8 SCC 377
6
(2017) 4 SCC 665
7
(2018) 249 DLT 619

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 Petitioner has submitted that the Arbitrator had a close relationship with the Respondent
in the form of licensor and licensee making her ineligible for the appointment as
arbitrator. The submissions were rejected on the basis that the Arbitrator is not an
employee, consultant or advisor of the respondent. The past relationship described by the
Petitioner cannot be taken into consideration considering the time period of 32 years of no
activity between the Arbitrator and the Respondent. The relationship between the
Arbitrator and the Respondent also don’t fall in the ambit of the Entry 1 or Entry 12 of the
Seventh Schedule of the Act and in the Petitioner also there is no mention of the above
Schedule.

Petitioner submitted that the Arbitrator has not given her disclosure regarding the
relationship between her and the respondent in the form prescribed under Sixth Schedule
of the Act. Putting reliance on past judicial precedents8, the Petitioner states that the
Courts, in exercise of their power under Section 14 and even under Section 11 of the Act
have terminated the mandate of such Arbitrators and appointed substitute Arbitrators in
their place. In respect to the contentions raised by the Petitioner, the court observed that
although the Arbitrator did not give disclosure in terms of the Sixth Schedule, she has
given her disclosure in order dated 04.02.2016 and subsequently through emails justified
her position. The court further directed the Arbitrator to submit the disclosure in
compliance with the Sixth Schedule.

In the case of Manish Anand v. Fiitjee Ltd.: It was held that although the disclosure is
not according to the Sixth Schedule, but if it discloses the most vital aspect of the details
then the mandate given by the Arbitrator cannot be terminated9.

 Petitioner submitted that the Arbitrator refused to adjourn the arbitration proceedings
even after the respondent agreed to not take any coercive steps against the Petitioner.
Petitioner also contends that the Arbitrator is found guilty for contempt of court which in
itself is justifiable reason for Arbitrators impartiality and independence. The court held
that the legality of the order passed by the Arbitrator is not a question before the court but
the order in no way suggests that the Arbitrator is proceeding with a bias against the
Petitioner.

8
Dream Valley Farms Private Limited v. Religare Finvest Limited and Alcove Industries Ltd. v. Oriental
Structural Engineers Ltd., ILR (2008)
9
2018 SCC OnLine Del 7587

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 In the case of Bhupender Lal Ghai v. Crown Buildtech Private Limted D+ : It was held
that a bona fide judgemental error committed by the Arbitrator cannot give rise to
justifiable doubts about the independence and impartiality of the Arbitrator. There has to
be something more specific to establish the case of doubt.

 Petitioners contempt petition is dismissed since even the Civil Judge has held that there is
no sufficient ground to hold Arbitrator guilty of wilful disobedience and breach of order
dated 18.02.2016. In the case of R.K. Anand vs Delhi High Court10 it was held that the
request for recusal cannot be allowed where the same is made with the intent to cause
obstruction and delay the proceedings by intimidation.

 Petitioners contention that the Arbitrator is taking instructions from the respondent is
rejected as the same was not contended when the Court was considering a petition filed
by the respondent under Section 29A of the Act seeking extension of time for making of
the Arbitral Award.

CONCLUSION

The court found no merit in the Petitions filed by the Petitioner and the same were dismissed.
It was held that the Arbitrator was appointed by the Respondent in compliance to all the rules
and provisions prescribed in the Act. Furthermore, the Arbitrator was not guilty of any
contempt.

10
(2009) 8 SCC 106

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