The Delhi High Court has dismissed a petition filed by National Highways Infrastructure Development Corporation Ltd. (NHIDCL), seeking the termination of the mandate of the Presiding Arbitrator in a dispute arising under an Engineering Procurement and Construction (EPC) Agreement.
The dispute arose from an EPC contract between NHIDCL and NSPR VKJ JV for upgrading a 13-km stretch of NH-717A in West Bengal. Following differences over payments and performance obligations, the respondent invoked the arbitration clause under the Society for Affordable Redressal of Disputes (SAROD) rules. After the tribunal’s constitution in June 2024, NHIDCL sought the recusal of the Presiding Arbitrator, claiming he was named in a Lokayukta complaint from Madhya Pradesh. The petitioner also cited bias, alleging that the Arbitrator had threatened to close its right to file a statement of defence, unless it withdrew its objection to his continuation.
Opposing the plea, the respondents argued that no FIR had ever been registered against the Presiding Arbitrator, and that NHIDCL’s case relied solely on the newspaper reports. They pointed out that the petitioner had already approached the Delhi High Court, which had dismissed the earlier petition with liberty to approach SAROD, and a subsequent representation filed before SAROD was also rejected, as the forum found no evidence to justify the substitution of the presiding arbitrator.
After noting the arguments of both sides, Justice Jyoti Singh held that the allegations of bias and corruption did not meet the threshold for termination under Section 14(1)(a) of the Act. The Court observed that while maintaining the integrity of arbitration is paramount, it cannot be compromised by unsubstantiated claims.
On the issue of bias, the Court found no impropriety in the Arbitrator’s communication seeking confirmation from NHIDCL regarding its intent to proceed with the filing of its defence. The Court reasoned that such correspondence could not be construed as coercive or threatening. Referring to HRD Corporation v. GAIL (India) Ltd., Bharat Broadband Network Ltd. v. United Telecoms Ltd., 2017 SCC OnLine Del 8034, the Court clarified that de jure ineligibility is confined to situations expressly listed under the Seventh Schedule, while questions of bias or impartiality must be addressed under Sections 12 and 13 of the Act, before the tribunal itself.
Reiterating the delicate balance between fairness and unfounded allegations, the Court held that terminating an arbitrator’s mandate on the basis of mere media reports or unverified complaints would set a “dangerous precedent” and risk eroding public confidence in the arbitral process.
Accordingly, the Court found no grounds to declare the Presiding Arbitrator de jure ineligible or to terminate his mandate, and dismissed NHIDCL’s petition along with all pending applications.
Appearances
Mr. Raj Shekhar Rao, Senior Advocate with Mr. Avneesh Garg, Mr. Rohit Rishi, Mr. Anshul, Mr. Utkarsh Sharma, Mr. Zahid Ahmad, and Ms. Iptisha for the Petitioner.
Dr. Amit George with Mr. Shashwat Kabi, Mr. Adhishwar Suri, Mr. Ganesh Chandra Kabi, Ms. Vartika Singhania, Mr. Aadarsh Mittal, Ms. Shristi Gupta, and Ms. Subhashni Kumari for Respondents 1–3.
Mr. Sunny Choudhary for Respondent 4 and Ms. Asmita Narula for Respondent 5.
