20 April 2024 Arbitration Law >> Business & Commercial Law  

A recent court order has shed light on proper procedure in arbitration cases. The case involved an applicant who attempted to remove the appointed arbitrator due to alleged bias.

The applicant claimed the arbitrator had a relationship with the opposing party, raising concerns about impartiality. However, the court found fault with the applicant's approach. The applicant failed to follow proper procedure by not directly raising these concerns with the arbitrator as mandated by the Arbitration and Conciliation Act.

While the arbitrator vehemently denied the allegations, they chose to voluntarily withdraw to avoid further controversy. The court, however, took a strong stance against the applicant's actions. They emphasized the importance of allowing arbitrators the chance to address concerns before seeking their removal.

The court's disapproval of the applicant's conduct did not prevent them from appointing a new arbitrator. Shri B.S. Walia, a former judge, was chosen to replace the previous arbitrator and resolve the dispute between the parties.

The order also included financial consequences for the applicant's actions. They were required to pay an additional Rs.4,65,000 to the new arbitrator on behalf of the opposing parties. Additionally, the court extended the time limit for completing the arbitration process by 12 months from the date the new arbitrator accepts the case.

This case serves as a reminder to parties involved in arbitration to follow proper procedures. Raising concerns directly with the arbitrator is crucial before seeking their removal through the court system. The court's strong stance on this matter highlights the importance of fairness and due process in resolving disputes through arbitration.

  Arbitration and Conciliation Act, 1996