Eden Exports Company vs. Union of India and Ors. (20.11.2012 – MADHC) : MANU/TN/2148/2012

👉 The contentious issue of whether Conciliator can act as Arbitrator was raised by the appellant in the present case. Hon’ble HC held that

19. Section 80 of the Arbitration and Conciliation Act, 1996, being relevant, is extracted hereunder:

80. Role of conciliator in other proceedings. – Unless otherwise agreed by the parties,-

(a) the conciliator shall not act as an arbitrator or as a representative or counsel of a party in any arbitral or judicial proceeding in respect of a dispute that is the subject of the conciliation proceedings.

20. A cursory reading of the aforesaid provision makes it clear that a conciliator could not act as an arbitrator. It is no doubt true that Sections 18(2), 18(3) and 18(4) have given dual role for the Facilitation Council to act both as Conciliators and Arbitrators. According to the learned counsel for the appellants, the Facilitation Council should not be allowed to act both as Conciliators and Arbitrators.

👉 This contention, though prima facie appears to be attractive, it is liable to be rejected on a closer scrutiny. Though the learned counsel would vehemently contend that the Conciliators could not act as Arbitrators, they could not place their hands on any of the decisions of upper forums of law in support of their contentions.

👉 As rightly pointed out by the learned single Judge, Section 18(2) of MSMED Act has borrowed the provisions of Sections 65 to 81 of the Arbitration and Conciliators Act for the purpose of conducting conciliation and, therefore, Section 80 could not be a bar for the Facilitation Council to conciliate and thereafter arbitrate on the matter.

👉 Further, the decision of the Supreme Court in Institute of Chartered Accountants of India v. L.K. Ratna MANU/SC/0083/1986 : (1986) 4 SCC 537, on this line has to be borne in mind. One should not forget that the decision of the Facilitation Council is not final and it is always subject to review under Article 226 of the Constitution of India and, therefore, the appellants are not left helpless.