Award by unilaterally appointed arbitrator not invalid if proceedings initiated before 2015 Amendment: Calcutta High Court

The Calcutta High Court has clarified that an arbitral award is not rendered invalid on the ground of unilateral appointment of arbitrator if the proceedings were initiated before the Arbitration and Conciliation (Amendment) Act 2015 came into force [West Bengal Housing Board v M/s Abhishek Construction].

Justice Shekhar B Saraf placed reliance on the case of Board of Control for Cricket in India v Kochi Cricket Pvt Ltd to find that the 2015 Act could only be applied prospectively and would only govern arbitral or court proceedings that have commenced after the Act's effective date.

"From the bare reading of Section 26 of the 2015 Amendment Act, it can be deduced that the said amendment will not apply to those arbitral proceedings which have commenced, in accordance with Section 21 of the Act, before the effective date", the court added.

In the case at hand, the petitioner had challenged an order in favour of the respondent on the ground that the award was passed by a unilaterally appointed arbitrator. The arbitral proceedings had commenced in 2012.

Another ground taken by the petitioner was that the arbitrator did not disclose in writing any circumstances which would give rise to doubts regarding his independence or impartiality.

On the other hand, the respondent stated that the 2015 Act came into force during the pendency of the arbitration and none of its provisions are applicable to pending arbitrations.

It was also submitted that it was too late in the day for the petitioner to question the independence or impartiality of the concerned arbitrator or regarding his non-compliance with disclosure requirements.

The court agreed with this contention stating that the lack of disclosure cannot cannot be the sole ground for setting aside the arbitral award.

"Merely because the petitioner/ award debtor decided to wake up from its deep slumber, and raise this ground for the very first time in the Section 34 application, without having taken any recourse to other remedies available in the Act, it will in no manner render the arbitral award void and invalid."

Justice Saraf also found himself in consonance with arguments put forth by the respondent that there was no bar placed on unilateral appointment of an arbitrator at the time appointment was made in this case.

"In view of the aforesaid findings, the present petition survives the challenge made on grounds of unilateral appointment of the arbitrator. The application shall be adjudicated on merits in accordance with the law", it was thus concluded.

Avocates Rohit Banerjee and Shreyanshee Das appeared for the petitioner while the respondent was represented by Aniruddh Mitra.

[Read Order]