TaxTMI 
TaxTMI 
2019 (1) TMI 187
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....e Appellant - State issued a Letter of Acceptance to Respondent No. 1 - M/s. G. F. Toll Road Pvt. Ltd. for execution of a works contract for construction, operation and maintenance of Gurgaon-Faridabad Road and Ballabhgarh-Sohna Road on BOT (Build, Operate and Transfer) basis. 2.2. A Concession Agreement was entered into between the parties on 31.01.2009. The period of construction was 24 months from 31.05.2009. The said agreement contained a dispute resolution clause which is set out hereinbelow: "39.2 Arbitration 39.2.1. Any dispute, which is not resolved amicably as provided in Clause 39.1 shall be finally decided by reference to arbitration by a Board of Arbitrators, appointed pursuant to Clause 39.2.2. sub-clause (....
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....ndent No. 2 - ICA on the ground that there was no rule which prohibited a former employee from being an arbitrator, and there could not be any justifiable doubt with respect to his impartiality since the nominee arbitrator had retired over 10 years ago. On 24.09.2015, Respondent No. 1 - M/s. G. F. Toll Road Pvt. Ltd. raised an objection regarding the independence and impartiality of the Appellant's nominee arbitrator - Mr. M.K. Aggarwal. Respondent No. 2 - ICA forwarded the said objection to the Appellant - State. 2.5. The Respondent No. 2 - ICA vide its Letter dated 30.10.2015 reiterated that it has been firmly established that Mr. M.K. Aggarwal had a direct relationship with the Appellant - State as its former employee, which may ra....
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....nstituted, and an objection under Section 16 should be raised before the Tribunal to rule on its own jurisdiction. 2.10. Aggrieved by the Order dated 27.01.2017, the Appellant - State filed a Civil Revision Petition before the Punjab and Haryana High Court, Chandigarh being C. R. No. 3279 of 2017. 2.11. The learned Single Judge of the Punjab and Haryana High Court vide the impugned Order dated 01.03.2018 dismissed the Civil Revision Petition on the ground that the Appellant - State could raise the issue of jurisdiction under Section 16 before the arbitral tribunal. It was further held that in a situation where an objection is raised regarding the nomination of an arbitrator by one of the parties, and the agreement is silent with re....
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....e provisions of Section 15(2) require that when the mandate of an arbitrator terminates either by his withdrawal from office, or pursuant to an agreement by the parties, or for any reason, a substitute arbitrator shall be appointed according to the rules applicable to the appointment of the arbitrator being replaced. This Court in ACC Ltd. v. Global Cements Ltd. (2012) 7 SCC 71 held that the procedure agreed upon by the parties for the appointment of the original arbitrator is equally applicable to the appointment of a substitute arbitrator, even if the agreement does not specifically provide so. 3.3. In the present case, Clause 39.2.2. of the agreement expressly provided that each party shall nominate one arbitrator, and the third ar....
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....rvices of the State. The apprehension of the Respondents was hence unjustified since the test to be applied for bias is whether the circumstances are such as would lead to a fair-minded and informed person to conclude that the arbitrator was infact biased. In Locabail Ltd. v. Bayfield Properties 2000 (1) All ER 65, the House of Lords held that : "The greater the passage of time between the event relied on as showing a danger of bias and the case in which the objection is raised, the weaker (other things being equal) the objection will be." The Court of Appeal in Re Medicaments and related Classes of Goods (No.2) 2002 (1) All ER 465 while propounding the 'real danger' test for bias held that : "The question is whether....
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....esent "business relationship" with the party is also disqualified. The word "other" used in Entry 1, would indicate a relationship other than an employee, consultant or an advisor. The word "other" cannot be used to widen the scope of the entry to include past/former employees. 3.11. The ICA made only a bald assertion that the nominee arbitrator - Mr. M. K. Aggarwal would not be independent and impartial. The objection of reasonable apprehension of bias raised was wholly unjustified and unsubstantiated, particularly since the nominee arbitrator was a former employee of the State over 10 years ago. This would not disqualify him from act as an arbitrator. Mere allegations of bias are not a ground for removal of an arbitrator. It is a....