In the Matter Man Industries Limited v. Indian Oil Corporation Man Industries Limited, the petitioner, filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the Arbitral Award dated 03-02-2018 issued by the Sole Arbitrator resolving the disputes between the parties in connection with the Purchase Order dated 08-08-2013 placed by Indian Oil Corporation Limited, the respondent, on the petitioner for line pipes for debottling the Salya-Mathura Pipeline. The petitioner filed an interim application while the current petition was still pending in order to add a new ground of challenge to the impugned award: the Sole Arbitrator was de facto ineligible to decide the disputes between the parties in accordance with Section 12(5) of the Act.
Analysis of Court order
Justice Naveen Chawla of the Delhi High Court’s single-judge bench struck aside the verdict, ruling that the arbitrator was de facto unable to serve in that capacity and that the award made by the knowledgeable arbitrator is invalid and unenforceable.
The Arbitrator chosen by the respondent was categorically unfit to serve in that capacity, the Court stated. The petitioner cannot be said to have waived the learned Arbitrator’s ineligibility under Section 12(5) of the Act by participating in the arbitration proceedings or by filing applications under Section 29A of the Arbitration Act seeking an extension of the arbitrator’s mandate. As a result, the arbitral award rendered by the learned Arbitrator is invalid. The Court went on to say that the argument that the Arbitrator is de jure ineligible to serve in that capacity is an argument that the court lacks jurisdiction. This argument can be made both with and without an amendment. As a result, the Court determined that the Arbitrator was de facto ineligible to serve in that capacity and that the Award made by the experienced Arbitrator is invalid and unenforceable.