This case is a part of our Annual Arbitration Review 2018.

Judgment Name: Goel Construction Co. Pvt. Ltd. v. The Institute of Chartered Accountants of India

Citation: O.M.P. (T) (COMM.) 120/2018 & I.A. No. 15421/2018

Court: High Court of Delhi

Coram: Navin Chawla, J.

Date: 13th November 2018

Keywords: Disability, Mandatory Disclosure, Disqualification.

Overview

A petition had been filed under Section 14 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as (“the Act”), challenging the mandate of the Arbitrator as he had not made the requisite disclosure under Schedule VI of the Act. The Court disposed of the petition with a direction to the Arbitrator to give the disclosure within one week of communication of the order.

Facts

An arbitration agreement was entered between the parties. Accordingly, the President of the Respondent appointed a sole Arbitrator. It was the contention of the learned Counsel for the Petitioner that the Arbitrator had wrongly recorded that the Petitioner had no objection to the constitution of the arbitral Tribunal. When the Petitioner sought a disclosure, the Arbitrator, in his response, stated that the requirement of disclosure under Schedule VI of the Act is not necessary as the requirement only arises when the Tribunal has any relationship with either of the parties. However, such a situation did not arise as the Arbitrator was under no disability mentioned in Schedules V and VII of the Act. Hence, the Petitioner challenged the mandate of the Arbitrator before the Court.

Issue

Whether the disclosure by an Arbitral Tribunal under Schedule VI is necessary if the arbitral Tribunal has no disability under Schedules V and VII of the Act?

Analysis

With regard to the non-disclosure, the Court observed that the Arbitrator had disclosed the major requirement under the Schedule. Hence, the Arbitrator must be under the misconception that he was not required to make any other disclosure under Schedule VI. The Court disposed of the Petition with a direction to the Arbitrator to make the Schedule VI disclosure within one week of communication of the Order.

As far as the challenge to the power of the President of the Respondent to appoint the Arbitrator was concerned, the Court did not find any merit in the argument. The Court relied on the decision of Bhayana Builders Pvt. Ltd. v. Oriental Structural Engineering Pvt. Ltd to reach this conclusion.

Conclusion

The Order clarifies that the requirement of disclosure is mandatory even if the Arbitrator is not disqualified under Schedules V and VII of the Act. Through this Order, the Court has reiterated the importance of procedural compliance.