Whether non-disclosure by an Arbitrator having represented a party/affiliate in High Court during the pendency of the arbitration would amount to fraud – C and E Ltd (Components and Equipments Ltd.) and Anr. Vs. Gopal Das Bagri and Ors. – Calcutta High Court
August 8, 2023
High Court held that:
(i) An individual or a group of persons, including a family, in control and management of a company, upon lifting of its corporate veil, can definitely qualify as an “affiliate”, within the meaning of the Explanation 2 to the Fifth and Seventh Schedules, read with Section 12 of the Act of 1996.
(ii) It is observed from the language of Section 12(2) that it same castes a continuous obligation on the Arbitrator to remain neutral and continue to disclose to the parties any acts or omissions that are likely to fall foul of the mandate under Section 12, in the course of the Arbitration.
(iii) The object and purpose of the disclosure in terms of section 12(2) essentially mean that the Arbitrator shall not, during the subsistence of the proceedings, continue such association.
(iv) A disclosure by the Arbitrator of past association with one party to the Arbitration would essentially impose an undertaking on the Arbitrator not to do so, during the pendency of the Arbitration.
(v) It is well established that this Court or any Court or person cannot enter into the mind of the Arbitrator to determine whether there was actual or real bias. Even a threadbare reading of the Award in fact and law may not disclose or indicate any bias.
(vi) Any infraction of section 12(2) and (5) and the grounds under the Fifth and Seventh Schedules and the object and purpose thereof, would desecrate the foundation of the institution of Arbitration.
