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TMI Blog2019 (7) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... in the above background, what is to be seen is that there has been a reasonable basis for the appellants to make a claim that in the present circumstance the learned Arbitrator would not be fair to them even if not biased. It could no doubt be only a perception of the appellants herein. The learned Judge of the High Court of Judicature at Bombay was not justified in allowing the appeal filed under Section 37(1)(b) of the Act, 1996. Appeal allowed. - CIVIL APPEAL NO. 6960 OF 2011 - - - Dated:- 24-7-2019 - R. BANUMATHI And A.S. BOPANNA, JJ. JUDGMENT A.S. BOPANNA, J. 1. The appellants herein are before this Court assailing the order dated August 30 and 31, 2007 passed by the High Court of Judicatu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontained in the very receipt issued in respect of the storage of goods. The respondent No. 1, therefore through their claim dated 03.06.2006 submitted the same before the learned Arbitrator 2nd respondent Sri. S.T. Madnani. 3. The father of the appellants herein in that background got issued a notice dated 08.06.2006 disputing the very existence of the arbitration clause and more particularly the appointment of Sri S.T. Madnani, Advocate as an Arbitrator was disputed and it was contended that the said Advocate being the counsel for the respondent No. 1 and its partners in other cases cannot act as an Arbitrator in respect of the disputes to which the respondent No. 1 is a party. A copy of the same was also dispatched to the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting as the Arbitrator was raised by Sri Bhaiyalalji Jain who is the father of the appellants herein and not by the appellants themselves and as such the same cannot be construed as an objection by a party to the proceedings as contemplated under Sec. 13 of the Act. Further it was held that merely because the learned Arbitrator had appeared as a lawyer in one mesne profits case for the respondent No. 1, it would not make a reasonable man believe that the Arbitrator was biased and there was a possibility that the Arbitrator would rule in favour of the respondent No. 1. It was further observed that a fairminded person would never have thought that the learned Arbitrator was biased merely because he had appeared as a lawyer for the party to ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is for the reason that as rightly pointed out by the learned counsel for the respondent No.1, it is the very case of the appellants herein that the appellants not being satisfied with the Arbitrator named in the Arbitration Clause had filed the Petition under Section 11 of the Act, 1996 in M.C.A.No.61/2006 before the Designated Court seeking the appointment of an independent Arbitrator. Since that is the undisputed position, the appellants are estopped from raising the contrary contention at this stage. Hence, the contention in that regard is rejected. 7. With regard to the contention that Sri S.T. Madnani, Advocate ought not to have acted as the Arbitrator since he was also the counsel for the respondent No.1 in another case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddressed a communication dated 07.08.2006 requesting the learned Arbitrator to stop the proceedings since they had filed a petition in the High Court for appointing an independent Arbitrator which was also for the reason that present Arbitrator could not have acted. 8. The learned Arbitrator had taken note of the letters at Exhibits 68 and 70 as narrated in the very award passed by the learned Arbitrator. Despite the same, the learned Arbitrator has proceeded with the matter instead of staying his hands. In that background, the observations as made by the High Court to hold that the objection raised was not sustainable as it did not comply with the requirement of Section 13 of the Act, 1996 is not justified. In fact, the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the merits of the claim and in that regard since, we have not adverted to the finding recorded by the learned Arbitrator on the merits of claim we would not venture to examine with regard to the ultimate conclusion on the claim as to whether it is justified or not. However, in the above background, what is to be seen is that there has been a reasonable basis for the appellants to make a claim that in the present circumstance the learned Arbitrator would not be fair to them even if not biased. It could no doubt be only a perception of the appellants herein. Be it so, no room should be given for even such a feeling more particularly when in the matter of arbitration the very basis is that the parties get the opportunity of nominating a judge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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