Case title: The Government of Haryana PWD Haryana (B and R) Branch vs. G.F. Toll Road Pvt. Ltd. and Ors. (03.01.2019 – SC) MANU/SC/0003/2019
👉 Appellant-State issued a Letter of Acceptance to Respondent No. 1 – G.F. Toll Road Pvt. Ltd. for execution of a works contract for construction, operation and maintenance of Gurgaon-Faridabad Road. After certain disputes arose,
👉 Respondent No. 1 G.F. Toll Road Pvt. Ltd. vide Letter dated 30th March, 2015 to Respondent No. 2 – Indian Council of Arbitration (“ICA”) invoked Arbitration Clause,and requested ICA to commence arbitration proceedings.
👉 Appellant-State nominated a retired Engineer-in-Chief, Mr. M.K. Aggarwal as their nominee arbitrator. Respondent No. 2 – ICA reiterated that, it had been firmly established that Mr. M.K. Aggarwal had a direct relationship with Appellant-State as its former employee, which might raise justifiable doubts as to his independence and impartiality in adjudicating dispute.
👉 Appellant – State had requested for 30 days’ time to appoint another nominee arbitrator, after objections were raised by ICA to first nomination. ICA declined to grant period of 30 days, and instead appointed arbitrator on behalf of Appellant – State.
👉 ICA could have filled up vacancy only if Appellant – State had no intention of filling up vacancy. ICA could not have usurped jurisdiction over appointment of nominee arbitrator on behalf of State prior to expiry of 30 days’ period requested by Petitioner. [3.4]
👉 Appointment of nominee arbitrator on behalf of Appellant – State by ICA was unjustified and contrary to Rules of ICA itself. [3.5]
👉 Objection raised by ICA with respect to appointment of Mr. M.K. Aggarwal as nominee of State was unjustified and contrary to provisions of 1996 Act. [3.6]
👉 1996 Act did not disqualify a former employee from acting as an arbitrator, provided that, there were no justifiable doubts as to his independence and impartiality. Fact that arbitrator was in employment of State of haryana over 10 years ago, would make allegation of bias clearly untenable. [3.9]
👉 Present case was governed by pre-amended 1996 Act. Even as per 2015 Amendment Act which had inserted Fifth Schedule to 1996 Act which contained grounds to determine whether circumstances exist which give rise to justifiable doubts as to independence or impartiality of an arbitrator. Entry 1 of Fifth Schedule and Seventh Schedule were identical.
👉 Entry indicated that, a person, who was related to a party as an employee, consultant, or an advisor, was disqualified to act as an arbitrator. Word “or” used in Entry 1, would indicate a relationship or than an employee, consultant or an advisor. Word “or” cannot be used to widen scope of entry to include past/former employees. [3.10]
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