S.14 Arbitration Act Does Not Confer Power On Court To Expunge Any Part Of Arbitral Tribunal's Order: Delhi High Court

The Delhi High Court has observed that a petition filed under sec. 14 of the Arbitration and Conciliation Act, 1996 does not confer any power on the Court to expunge any part of the order of the Arbitral Tribunal.

Justice Sanjeev Sachdeva was dealing with a plea filed under sec. 14(2) read with sec. 15 of the Arbitration and Conciliation Act seeking termination of the mandate of the Arbitral Tribunal and also for expunging the adverse and prejudicial remarks contained in order dated October 5, 2021 of the Arbitral Tribunal.

The Respondent party had filed the subject claim before the Arbitral Tribunal on March 23, 2021 of the value of approximately Rs. 248 cores besides interest.

In the year, another creditor of the petitioners CBRE, South Asia Private Limited had approached the National Company Law Tribunal seeking winding up of the Petitioner under the Insolvency and Bankruptcy Code. Vide order 23.08.2021, NCLT had issued a moratorium and appointed an Interim Resolution Professional (IRP).

The Petitioner had then settled with the creditor on August 28, 2021. Thereafter, on September 2, 2021, the petitioner approached the National Company Law Appellate Tribunal and informed the NCLAT that the disputes had been settled with the creditor CBRE, South Asia Private Limited and sought stay of the further proceedings by the Interim Resolution Professional. The NCLAT had then stayed the proceedings by the IRP.

On September 27, 2021, Arbitral Tribunal was informed about the moratorium being in place and the Arbitral Tribunal was requested for suspension of the proceedings. Thereafter, NCLAT was once again informed about the settlement and a statement was made before the NCLAT that proceedings initiated by the said creditor CBRE South Asia Private Limited would be withdrawn pursuant to the settlement.

The High Court noted that though the Arbitral Tribunal by its order dated October 5, 2021 directed the petitioner to approach the NCLT within four days to inform the NCLT about the settlement so that the proceedings could be withdrawn and the moratorium lifted, however, the petitioner did not comply with the said direction order till as late as November, 2021.

"Petitioner attempted to stall those proceedings by submitting before the said Court, where objections under Section 34 of the Arbitration Act are pending, that there was a moratorium in place. The Co-ordinate Bench of this court by order dated 21.10.2021, noticing the conduct of the petitioner, permitted respondent to participate in the NCLT and NCLAT proceedings for the purposes of having the moratorium lifted," the Court said.

The Court was of the view that no material was placed on record to even suggest that there was any bias or prejudice on the part of the Arbitral Tribunal and that the Petitioner was not able to substantiate any of the allegations made against the Arbitral Tribunal.

"The petition does not satisfy any of the requirements of the conditions contained in Section 14 of the Arbitration Act. Petitioner has not even laid the factual foundation for establishing any bias,preconceived notion on the part of the Arbitral Tribunal or that they have become de-facto or de-jure unable to perform their functions leave alone substantiate the same. Accordingly, no ground is made out for terminating the mandate of the Arbitral Tribunal," the Court said.

It added " This is a petition under section 14 of the Arbitration Act which does not confer any such power on the Court to expunge any part of the order of the Arbitral Tribunal."

Accordingly, the Court dismissed the petition with costs of Rs. 2 lakhs to be deposited by the petitioner in the Indigent & Disabled Lawyers Fund‟ of Bar Council of Delhi, within a period of two weeks.

Case Title: MR BHAVANISHANKAR H SHARMA THROUGH HIS POWER OF ATTORNEY HOLDER SH SATISH KUMAR TIWARI v. SRS PRIVATE INVESTMENT POWAI LIMITED THROUGH ITS AUTHORIZED SIGNATORY MR ROHIT DAVE & ORS.

Citation: 2022 LiveLaw (Del) 359

Click Here To Read Order