‘Bias fear no ground to quash ruling in arbitration dispute’

Kolkata: Mere apprehension of bias against arbitrators cannot be a ground to quash the award granted to a company in an arbitration dispute, the Calcutta HC held on Jan 21 while turning down the Single Judge's order, which set aside the arbitral award on grounds of bias by the arbitrator.Replying to the claim that the standard of fairness of the arbitrator has to be such that it eliminates any reasonable apprehension of bias, the division bench of Justices Sabyasachi Bhattacharyya and Supratim Bhattacharya said there is a distinction in the standard applicable to an arbitrator and Courts of Law.
The bench stated that, under an arbitration agreement, parties are free to choose any person as their arbitrator, who comes from a specific field pertaining to the disputes involved and may have current or past professional engagements in the very domain of expertise involved in such dispute. The bench clarified that a judge is expected to abstain not only from public life but also to refrain from expressing opinions in public about subject matters which are or might come before them for adjudication, and to avoid involvements which may give rise to conflicting interests in the adjudicatory process."After all, judges are supposed to be exemplary in conduct, both in and out of the court, rising above any shadow of doubt regarding their integrity. However, if such strict restrictions are imposed on arbitrators, who are otherwise largely chosen from a pool of professionals having prior or current engagements in the specific domain of expertise involved in the dispute, the very core of party autonomy would be frustrated… This would be counter-productive to the very purpose of the 1996 Act, which is to give a fillip to Alternative Dispute Resolution in order to make India a hub of international arbitration and mediation."Prior to 2020, the court appointed an Arbitrator for a dispute between Feather Touch Limited and C&E Limited. The arbitrator was a senior advocate known for being a "respectable member of Bar". The same, as the division bench of Justices Sabyasachi Bhattacharyya and Supratim Bhattacharya noted in the present litigation, was agreed upon by both the parties. The award was passed on Feb 29, 2020, by which C&E Limited won, while Gopal Das Bagri and Feather Touch Limited were awarded debtors, which means they were ordered to pay damages or costs to C&E Limited. A case was filed against this order by Bagri and Feather Touch Limited, stating that the "arbitrator", in the capacity of a lawyer, represented SSSMIL, which they said is affiliated to C&E Limited. The Single Judge quashed the award based on the fact the arbitrator did represent SSSMIL. This was challenged by C&E Limited.