Rajasthan HC | Arbitrator rendered unable to perform his functions effectively due to charge of excessive fee

Rajasthan High Court: A Bench of Arun Bhansali, J. terminated the mandate of an arbitrator by stating that if an arbitrator creates a doubt in the mind of a party regarding prejudice against it and qua the impartial conduct of proceedings before the arbitral tribunal it renders him de jure/de facto incapable to perform his functions effectively.

The petitioner through his counsel Ankit Sareen has alleged that the arbitrator appointed has charged a fee which was beyond the fee prescribed under the Schedule IV attached to Arbitration Act along with the 2017 notification of High Court. Also even during the pendency of the writ petition before the High court, the arbitrator continued with the proceedings in the Commercial Court. Thus he has prayed before this court the mandate of the arbitrator be terminated under Section 14(1)(a) of the Arbitration Act.

The point to be considered was as to when the services of the arbitrator stands terminated which was then answered by the court by stating that he can be terminated when he becomes de jure or de facto unable to perform his functions. In this case, apart from charging an illegal fee, the arbitrator conducted the proceedings ex-parte order and posted the matter for final arguments despite the pendency of the writ petition. Accordingly, it suffices to hold the arbitrator guilty for his alleged acts and thus his mandate stood terminated under Section 14(1)(a) of the Act and the petitioner was allowed to appoint a substitute arbitrator.[Doshion (P) Ltd. v. Hindustan Zinc Ltd., 2019 SCC OnLine Raj 6, Order dated 03-01-2019]

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