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Maj Pankaj Rai vs Niit Ltd on 16 May, 2023, Delhi High Court.

Facts: The petitioner filed the current petition according to Section 14(1)(a) of the Arbitration and Conciliation Act, 1996 (the “Act”) in order to terminate the appointment of the arbitrator charged with resolving disputes between the petitioner and the respondent. The petitioner is asking for the subsequent reliefs: “(a) Resign the position of Arbitrator Mr. Vijay Shali, Senior Advocate and Retired Judge, located at 8 Pamposh Enclave in Greater Kailash, New Delhi. (b) Rule Mr. Vijay Shali, the current arbitrator, ineligible to serve as an arbitrator in the conflict between the Petitioner and the Respondent. In a Licence Agreement dated December 30, 2015, the petitioner served as the indemnifier, while the respondent was the licensee. When signing the Letter of Intent, the respondent acknowledged paying the sum of Rs. 1.95 lakhs. upon the petitioner announced his desire to terminate the Licence Agreement, the respondent returned the Rs. 1.95 lakhs that had been collected as earnest money upon signing the Letter of Intent as full and final settlement of the exit convenience. The respondent unilaterally appointed an arbitrator to resolve the aforementioned conflicts and other disagreements between the parties relating to the Licence Agreement, but on January 7, 2018, after objections were raised, the arbitrator withdrew from the case.  The petitioner, who was in person, claimed that the learned Arbitrator held a preliminary conference on May 7, 2022, and informed the respondent through email. This occurred after the former Arbitrator was appointed by the Coordinate Bench of this Court. The respondent asked the knowledgeable Arbitrator in an email dated May 30, 2022 to postpone the hearing until after June 18, 2022. The learned Arbitrator then instructed the petitioner to submit a statement of claim before July 5, 2022, and added that any right to submit a claim beyond that date would be lost. As a result, on June 28, 2022, the petitioner submitted his Statement of Claim and a request under Section 17(1)(d) of the Act.  According to the submission, on July 5, 2022, the learned Arbitrator ordered the respondent to file the Statement of Defence within four weeks. On August 9, 2022, he extended the deadline by another three weeks. The learned Arbitrator did not object when extending the deadline for submitting the Statement of Defence and did not include a provision for Signature Not Verified. Digitally Author: GAURAV SHARMA Date of Signature: 05.16.2023, 18:01:42 If the NEUTRAL CITATION NO. 2023:DHC:3394 is not filed, there is a penalty. According to the argument, the respondent failed to file the Statement of Defence in the first instance within the allotted time frame and further failed to file any application to demonstrate or provide an explanation for the delay in filing the Statement of Defence. According to the submission, on July 5, 2022, the learned Arbitrator ordered the respondent to file the Statement of Defence within four weeks. On August 9, 2022, he extended the deadline by another three weeks. The learned Arbitrator did not object when extending the deadline for submitting the Statement of Defence and did not include a provision for Signature Not Verified. Digitally Author: GAURAV SHARMA Date of Signature: 05.16.2023, 18:01:42 If the NEUTRAL CITATION NO. 2023:DHC:3394 is not filed, there is a penalty. According to the argument, the respondent failed to file the Statement of Defence in the first instance within the allotted time frame and further failed to file any application to demonstrate or provide an explanation for the delay in filing the Statement of Defence. Without providing adequate justification, the learned Arbitrator dismissed the petitioner’s applications on September 23, 2022, demonstrating his inability to carry out his duties without causing excessive delay. On the record’s surface, the order contains inaccuracies. It is claimed that the learned Arbitrator simply stated that the averments in the applications were “baseless and extraneous submissions” without providing any justification for dismissing the petitioner’s application made pursuant to Section 16(3) of the Act on October 27, 2022. The knowledgeable Arbitrator neglected to pass a verbal order while deciding the case and did not clearly deny any of the aforementioned instances where he exceeded his power.  The knowledgeable Arbitrator acted arbitrarily and biasedly. The amount of fees paid by the respondent has not been disclosed by the learned Arbitrator. Despite knowing that the petitioner lived in Hyderabad, he asked him to pick up a certified copy of the proceedings’ orders from his office. The erudite Arbitrator behaved outside of his or her authority and against the rules of natural justice. Therefore, it is requested that the arbitrator’s appointment be revoked and that this Court appoint an alternative, unbiased arbitrator to resolve the parties’ differences.

Held: Arguments regarding the application to recall or modify the order dated 17.09.2022 were heard on October 22, but because the Claimant was citing specific passages from the judgements, he was advised that, in order to be fair, he should have provided the Arbitral Tribunal and the opposing counsel with hard copies of the judgements he was relying upon via email or other electronic means. Hearing might be held on NEUTRAL CITATION NO. 2023:DHC:3394 as of the signing date of May 16, 2023, at 18:01:42. All of the records of the orders made by the learned Arbitrator in the proceedings before him show that the petitioner has not been subjected to any improper or unfair treatment during the course of the proceedings. The appropriate procedure is being followed, and the petitioner has had adequate time to present his case to the experienced Arbitrator. This Court further believes that the petitioner misunderstood the requirements of Section 14(1)(a) of the Act and was unable to provide any compelling evidence to support the termination of the learned Arbitrator’s appointment. This Court is of the considered opinion that the present petition is nothing more than a clear misuse of the legal system after hearing the arguments and carefully reading the pleadings, including the orders and communications to and from the learned Arbitrator. The petitioner has not been able to establish that the claims he has made that go beyond the grounds of the dispute arising out of the Licence Agreement have any merit before the learned Arbitrator or before this Court. The petitioner has been citing and pressing the reasons on the purported conduct and demeanour of the learned Arbitrator rather than pressing the claims to the actual dispute, without being able to establish the same.

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 Judgment Reviewed by Kushala Simha