The court has the power to appoint a new arbitrator once the award is overturned – Calcutta HC
The Kolkata Supreme Court recently dealt with a legal issue relating to the appointment of a new arbitrator when the award made by the previous award was challenged and the wishes of both parties had given their assent.
The Bank believed that if the disputed award was set aside, the parties could exercise their autonomy and appoint another arbitrator, and that arbitrator is protected by the Arbitration and Conciliation Act 1996.
In the present case, the petitioner (debtor) alleged that he had not been given the opportunity to address the arbitrator. The award winner, however, denied the petitioner’s allegation and stated that he had participated in all the proceedings.
The bank noted that although the petitioner participated in all of the proceedings, the “perception of bias” needs to be addressed.
The bank overturned the award, citing Section 12 (1) (A) of the Act and stated that the arbitrator had not disclosed his relationship with either party in writing and was therefore not impartial and independent.
The bank noted that Section 43 (4) of the Act provides that all options should be kept open in order to resolve the complaints of the parties involved. The bank also referred to Section 89 of the Code of Civil Procedure, which encourages the court to participate in the formulation of the settlement conditions.
The bank highlighted the power of the court, stating that its power could not be curtailed and that the relief could be designed in such a way as to provide an appropriate remedy for the parties. However, the relief formed in this way should not violate the law.
The bank therefore overturned the award and, with the consent of the parties, appointed a new arbitrator.