Arbitration and Conciliation Act, 1996 PDF

1 The Arbitration and Conciliation Act, 1996 (Prepared by Chandrashekhar U, Senior Faculty Member, Karnataka Judicial Academy) (Paper prepared by referring to various commentaries on Arbitration and Conciliation Act, 1996) (As on 30.06.2022...

1 The Arbitration and Conciliation Act, 1996 (Prepared by Chandrashekhar U, Senior Faculty Member, Karnataka Judicial Academy) (Paper prepared by referring to various commentaries on Arbitration and Conciliation Act, 1996) (As on 30.06.2022)  2 INDEX Sections Topic Page No. Object 5 2 Definition 7 3 Receipt of written communication 11 4 Waiver of right to object 12 5 Extent of Judicial Intervention 12 6 Administrative assistance 13 7 Arbitration agreement 13 8 Power to refer parties to arbitration where there is 16 an arbitration agreement 9 Interim measures, etc., by court 23 10 Number of arbitration 29 11 Appointment of arbitrators 29 11A- Power of Central Government to amend Fourth Schedule. 12 Grounds for challenge. 37 13 Challenge procedure 45 14 Failure or impossibility to act. 50 15 Termination of mandate and substitution of 55 arbitrator. 16 Competence of arbitral tribunal to rule on its 60 jurisdiction 17 Interim measures ordered by arbitral tribunal 69 18 Equal treatment of parties 76 19 Determination of rules of procedure 82 20 Place of arbitration 87 21 Commencement of arbitral proceedings. 93 22 Language 97 23 Statements of claim and defence 98 24 Hearings and written proceedings 101 25 Default of a party 106 26 Expert appointed by arbitral tribunal 110 27 Court assistance in taking evidence 112 28 Rules applicable to substance of dispute 114 29 Decision making by panel of arbitrators 116 29-A Time limit for arbitral award 29-B Fast track procedure 30 Settlement 121  3 31 Form and contents of arbitral award 122 31-A Regime for costs 32 Termination of proceedings 143 33 Correction and interpretation of award; additional 147 award 34 Application for setting aside arbitral awards 151 35 Finality of arbitral awards 181 36 Enforcement 181 37 Appealable orders 183 38 Deposits 191 39 Lien on arbitral award and deposits as to costs 192 40 Arbitration agreement not to be discharged by 193 death of party thereto 41 Provisions in case of insolvency 193 42 Jurisdiction 194 A-Confidentiality of information B-Protection of action taken in good faith 43 Limitations 196 44 Definition 197 45 Power of judicial authority to refer parties to 198 arbitration 46 When foreign award binding 198 47 Evidence 199 48 Conditions for enforcement of foreign awards 199 49 Enforcement of foreign awards 202 50 Appealable orders 202 51 Saving 202 52 Chapter II not to apply 202 53 Interpretation 202 54 Power of judicial authority to refer parties to 203 arbitration 55 Foreign awards when binding 204 56 Evidence 204 57 Conditions for enforcement of foreign awards 205 58 Enforcement of foreign awards 207 59 Appealable orders 207 60 Savings 208 61 Application and scope 208 62 Commencement of conciliation proceedings 208 63 Number of conciliators 208 64 Appointment of conciliators 208 65 Submission of statements to conciliator 210  4 66 Conciliator not bound by certain enactments 210 67 Role of conciliator 210 68 Administrative assistance 211 69 Communication between conciliator and parties 211 70 Disclosure of information 212 71 Co-operation of parties with conciliator 212 72 Suggestions by parties for settlement of dispute 212 73 Settlement agreement 212 74 Status and effect of settlement agreement 213 75 Confidentiality 213 76 Termination of conciliation proceedings 213 77 Resort to arbitral or judicial proceedings 214 78 Costs 214 79 Deposits 215 80 Role of conciliator in other proceedings 215 81 Admissibility of evidence in other proceedings 215 82 Power of High Court to make rules 216 83 Removal of difficulties 216 84 Power to make rules 216 85 Repeal and savings 217 86 Repeal of Ordinance 27 of 1996 and savings 218 87 Effect of arbitral and related court proceedings 218 commenced prior to 23rd October, 2015  5 THE ARBITRATION AND CONCILIATION ACT, 1996 Statement of Objects and Reasons The law on arbitration in India is at present substantially contained in three enactments, namely, the Arbitration Act, 1940, the Arbitration (Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961. It is widely felt that the 1940 Act, which contains the general law of arbitration, has become outdated. The Law Commission of India, several representative bodies of trade and industry and experts in the field of arbitration have proposed amendments to this Act to make it more responsive to contemporary requirements. It is also recognised that our economic reforms may not become fully effective if the law dealing with settlement of both domestic and international commercial disputes remains out of tune with such reforms. Like arbitration, conciliation is also getting increasing worldwide recognition as an instrument for settlement of disputes. There is, however, no general law on the subject in India. 2. The United Nations Commission on International Trade Law (UNCITRAL) adopted in 1985 the Model Law on International Commercial Arbitration. The General Assembly of the United Nations has recommended that all countries give due consideration to the said Model Law, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice. The UNCITRAL also adopted in 1980 a set of Conciliation Rules. The General Assembly of the United Nations has recommended the use of these Rules in cases where the disputes arise in the context of international commercial relations and the parties seek amicable settlement of their disputes by recourse to conciliation. An important feature of the said  6 UNCITRAL Model Law and Rules is that they have harmonized concepts on arbitration and conciliation of different legal systems of the world and thus contain provisions which are designed for universal application. 3. Though the said UNCITRAL Model Law and Rules are intended to deal with international commercial arbitration and conciliation, they could, with appropriate modifications, serve as a model for legislation on domestic arbitration and conciliation. The present Bill seeks to consolidate and amend the law relating to domestic arbitration, international commercial arbitration, enforcement of foreign arbitral awards and to define the law relating to conciliation, taking into account the said UNCITRAL Model Law and Rules. Preamble WHEREAS the United Nations Commission on International Trade Law (UNCITRAL) has adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985; AND WHEREAS the General Assembly of the United Nations has recommended that all countries give due consideration to the said Model Law, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice; AND WHEREAS the UNCITRAL has adopted the UNCITRAL Conciliation Rules in 1980; AND WHEREAS the General Assembly of the United Nations has recommended the use of the said Rules in cases where a dispute arises in the context of international commercial relations  7 and the parties seek an amicable settlement of that dispute by recourse to conciliation; AND WHEREAS the said Model Law and Rules make significant contribution to the establishment of a unified legal framework for the fair and efficient settlement of disputes arising in international commercial relations; AND WHEREAS it is expedient to make law respecting arbitration and conciliation, taking into account the aforesaid Model Law and Rules; BE it enacted by Parliament in the Forty-seventh Year of the Republic of India as follows:— PART – I ARBITRATION Chapter I General Provisions 2. Definitions.—(1) In this Part, unless the context otherwise requires,— (a) “arbitration” means any arbitration whether or not administered by permanent arbitral institution; Comments Arbitration is one the oldest modes of dispute resolution and has long being favoured as an alternative litigation before traditional Courts. The role of arbitration as an alternative to litigation in State-controlled Court system is now well recognized and well established. The Core of arbitration is that the parties voluntarily agree to submit their disputes to be resolved by an independent and neutral third party of their choice whose decision on the dispute is binding on them.  8 (b) “arbitration agreement” means an agreement referred to in section 7; (c) “arbitral award” includes an interim award; (d) “arbitral tribunal” means a sole arbitrator or a panel of arbitrators; (e) “Court” means— (i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject- matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes; (ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject- matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of Courts subordinate to that High Court; (f) “international commercial arbitration” means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is—  9 (i) an individual who is a national of, or habitually resident in, any country other than India; or (ii) a body corporate which is incorporated in any country other than India; or (iii) 2*** an association or a body of individuals whose central management and control is exercised in any country other than India; or (iv) the Government of a foreign country; (g) “legal representative” means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased, and, where a party acts in a representative character, the person on whom the estate devolves on the death of the party so acting; (h) “party” means a party to an arbitration agreement. Scope (2) This Part shall apply where the place of arbitration is in India: Provided that subject to an agreement to the contrary, the provisions of sections 9, 27 and clause (a) of sub-section (1) and sub-section (3) of section 37 shall also apply to international commercial arbitration, even if the place of arbitration is outside India, and an arbitral award made or to be made in such place is enforceable and recognised under the provisions of Part II of this Act. (3) This Part shall not affect any other law for the time being in force by virtue of which certain disputes may not be submitted to arbitration.  10 (4) This Part except sub-section (1) of section 40, sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as the provisions of this Part are inconsistent with that other enactment or with any rules made thereunder. (5) Subject to the provisions of sub-section (4), and save in so far as is otherwise provided by any law for the time being in force or in any agreement in force between India and any other country or countries, this Part shall apply to all arbitrations and to all proceedings relating thereto. Construction of references (6) Where this Part, except section 28, leaves the parties free to determine a certain issue, that freedom shall include the right of the parties to authorise any person including an institution, to determine that issue. (7) An arbitral award made under this Part shall be considered as a domestic award. (8) Where this Part— (a) refers to the fact that the parties have agreed or that they may agree, or (b) in any other way refers to an agreement of the parties, that agreement shall include any arbitration rules referred to in that agreement. (9) Where this Part, other than clause (a) of section 25 or clause (a) of sub-section (2) of section 32, refers to a claim, it shall  11 also apply to a counterclaim, and where it refers to a defence, it shall also apply to a defence to that counterclaim. Article 2(1)(a) of the 1996 Act replicates Article 2(a) of UNCITRAL model law which defines Arbitration to mean any arbitration whether or not administered by a permanent arbitral institution. 1940 Act did not contain any definition of Arbitration. Choice of seat and venue The parties have option of choosing a place of arbitration by agreement. In the absence of such an agreement, the Arbitral Tribunal has the default power to determine the place of arbitration having regard to the circumstances of the case including convenience of the parties. It requires confidentiality of proceedings conducted by the arbitrators. Ad hoc arbitration refers to arbitration by an Arbitral Tribunal constituted by an agreement between the parties, which is not administered by an institution. 3. Receipt of written communications.—(1) Unless otherwise agreed by the parties,— (a) any written communication is deemed to have been received if it is delivered to the addressee personally or at his place of business, habitual residence or mailing address, and (b) if none of the places referred to in clause (a) can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last known place of business,  12 habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it. (2) The communication is deemed to have been received on the day it is so delivered. (3) This section does not apply to written communications in respect of proceedings of any judicial authority. 4. Waiver of right to object.—A party who knows that— (a) any provision of this Part from which the parties may derogate, or (b) any requirement under the arbitration agreement, has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object. Refer the decisions in the case of BSNL vs. Motorola India (P) Ltd. – (2009) 2 SCC 337, Union of India vs. PAM Development Pvt. Ltd. – (2014) 11 SCC 366, Bharat Broadband Network Ltd. vs. United Telecoms Limited – (2019) 5 SCC 755. 5. Extent of judicial intervention.—Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. Where dual procedure exists, one under criminal law and the other under contractual law, invocation of the latter by the contracting party is proper. Hindustan Petroleum Corp. Ltd. vs. Pinkcity Midway Petroleums – (2003) 6 SCC 503, Greaves  13 Cotton Ltd. vs. IUnited Machinery & Appliances – (2017) 2 SCC 268, Bafna Motors Private Ltd. vs. Amanulla Khan – 2022 SCC Online Bom 994, Union of India vs. Dhirubhai D. Thumba & Co. and another – 2022 SCC Online Mad 750, Chintels India Ltd. vs. Bhayana Builders Pvt. Ltd. – (2021) 4 SCC 602. The latest decision is in the case of Delhi Airport Metro Express Pvt. Ltd. vs. Delhi Metro Rail Corporation Ltd. – (2022) 1 SCC 131 to the effect that there should be minimum judicial interference. 6. Administrative assistance.—In order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral tribunal with the consent of the parties, may arrange for administrative assistance by a suitable institution or person. CHAPTER II Arbitration agreement 7. Arbitration agreement.—(1) In this Part, “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in— (a) a document signed by the parties;  14 (b) an exchange of letters, telex, telegrams or other means of telecommunication 1[including communication through electronic means] which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract. An agreement for arbitration, in either form must be in writing, and must satisfy the requirements of a valid arbitration agreement, that is, a binding obligation to refer current or future disputes to arbitration, as the mode of dispute resolution. Refer Wellington Associates Ltd. vs. Kirit Mehta – (2000) 4 SCC 272 = AIR 2000 SC 1379, Jagadish Chander vs. Ramesh Chander – (2007) 5 SCC 719, BSNL vs. Telephone Cables Ltd., (2010) 5 SCC 213 = AIR 2010 SC 2671. Vidya Drolia vs. Durga Trading Corpn., – (2021) 2 SCC 1. Existence of separate, different and independent contracts or transactions which are mutually exclusive of one another is sine-qua-non for applicability of Sec. 7(5) and the said provision will not apply to one single composite substantive transaction/contract albeit contained in separate documents between the same parties and in relation to the same subject matter- B.M. Mohan Rao vs. Mohitshasm Complexes (P) Ltd. – 2019 SCC Online Kar 3491. The latest decision is in the case of UHL Power Co. Ltd. vs. State of H.P. – (2022) 4 SCC 116.  15 In State of U.P. vs. Tipper Chand – AIR 1980 SC 1522, it is held that the contract contains a clause that the decision of the superintending engineer would be final, conclusive, and binding all parties with the respect to quality of workmanship, materials used on the work, or any other question with respect to the claim or right, arising out of the contract, etc. The Court held that the clause did neither contain an express arbitration agreement nor could such an agreement be spelt out by implication. The clause only vested the superintending engineer with the supervision over the execution of the work and administrative control over it. Refer the decision in the case of B.P.Dasratharama Reddy complex vs. Government of Karnataka reported in (2014) 2 SCC 201. Two-Tier arbitration A Two-tier arbitration process provides the availability of an internal appeal within the arbitral process. This reflects a commercial desire to maintain control over the arbitral process by ensuring that errors are corrected by a second stage review, so as to reduce the supervisory jurisdiction of domestic Courts. The review of the final award by the national Courts would be restricted to grounds usually relating to jurisdictional errors or procedural irregularities, or in some cases for violation of public policy. The State Courts would exercise a minimal level of control to ensure the procedural and jurisdictional integrity of the institutional arbitration which take place under their jurisdiction. The concept of two-tier or appellate arbitration has gained ground in international arbitration institutions. Some of the institutions have incorporated an internal appeal in their rules, to correct errors of fact and law, which may have occurred in the award rendered in the first instance. The rules of the institution  16 would determine whether the provision of an internal appeal is optional or mandatory. The scope of appeal, whether it would be a full-blown review of the award on merits, or a limited review on a question of law will be as per the rules of the institution conducting the arbitration. The appellate tribunal conducts the hearing in accordance with the same procedural rules followed by the first tribunal, and then renders a final and binding award. In a two-tier arbitration, it is the second tier which would produce the final and binding award. The objective of providing an internal appeal or review of the award is to promote finality and restrict the parties to the arbitral process, and thereby limit the intervention by the state Courts. Multi-tiered dispute resolution clauses provide for a step vise mechanism of resolving disputes or differences between the parties. 8. Power to refer parties to arbitration where there is an arbitration agreement.—(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof:  17 Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. Section 8 of the 1996 Act has made some significant departures from the Model Law: First, Section 8 uses the term ‘Judicial authority’, in contradistinction with the term ‘Court’ used in Article 8 of the Model Law; second, and more significantly, the words ‘unless it finds that the agreement is null and void, inoperative and incapable of being performed’ in Article 8(1) of the Model Law, has been omitted from sub-section (1) of Section 8 of the 1996 Act. The omission of these words is significant, since the legislative intent is to vest jurisdiction in the arbitral tribunal to decide all issues and objections to jurisdiction. Section 16 empowers the tribunal to rule on its own jurisdiction, including any objection with respect to the existence or validity of the arbitration agreement. Section 8 is couched in the form of a legislative command to a judicial authority to refer parties to arbitration if the dispute is  18 covered by a valid arbitration agreement. This provision is not subject to party autonomy. Hindustan Petroleum corporation Ltd. vs. Pinkcity Midway Petroleum, (2003) 6 SCC 503: 2003 (2) Arb LR 666 (SC) : AIR 2003 SC 2881. Rashtriya Ispat Nigam Ltd. vs. Verma Transport Co. (2006) 7 SCC 275 : 2006 (3) Arb LR 210 (SC) : AIR 2006 SC 2800. See also Sundaram Finance Ltd. vs. T. Thankam (2015) 14 SCC 444, 449, para 13 : 2015 (2) Arb LR 1 (SC) : AIR 2015 SC 1303; Magma Leasing & Finance Limited vs. Potluri Madhavilata (2009) 10 SCC 103 : 2009 (4) Arb LR 1 (SC) : AIR 2010 SC 488. See also Charanjit Kaur vs. S.R. Cable, 2009 (1) Arb LR 369 (MP) : AIR 2009 MP 66 : (2008) 4 MP LJ 221 held: “14. This Court in P. Anand Gajapathi Raju vs. P.V.G. Raju has held that the language of Section 8 is peremptory in nature. Therefore, in cases where there is an arbitration clause in the agreement, it is obligatory for the Court to refer the parties to arbitration in terms of their arbitration agreement and nothing remains to be decided in the original action after such an application is made except to refer the dispute to an arbitrator. Therefore, it is clear that if, as contended by a party in an agreement between the parties before the civil Court, there is a clause for arbitration, it is mandatory for the civil Court to refer the dispute to an arbitrator.” The application for reference is required to be made not later than the submission of the first statement on the substance of the dispute, which would be like filing the written statement in a suit.  19 In BPL Communications Ltd. vs. Punj Lloyd Ltd., 2004 (1) Arb LR 46 (Delhi), para 14 : (2003) 108 DLT 198 : 2004 (1) RAJ 256, the Delhi High Court sets out the requirements for the exercise of jurisdiction under Section 8 as follows: “(1) The provision of Section 8 is peremptory in nature, and is mandatory; (2) The mandate of Section 8 can be invoked by a party to an action before a judicial authority by filing an application; (3) The application invoking Section 8 may be filed in any action, not necessarily civil suits brought before ‘a judicial authority’, which does not necessarily imply a Civil Court established under the Civil Procedure Code, and a “Court” as defined by clause (e) of Section 2 of the Act; (4) The application for referring the disputes to an arbitrator may be made by a party ‘not later than when submitting his first statement on the substance of the dispute’. Before invoking the powers of the judicial authority under Section 8, the party applying, must not have submitted the statement on the substance of the dispute, in the proceeding in which application is filed, or in a proceeding between the parties to the arbitration agreement before a Court or judicial authority prior to the present action; (5) Reference to an arbitrator under this provision can be made if the action before the judicial authority is a mater, which is ‘the subject-matter of an arbitration agreement’. The subject- matter before a judicial authority must completely identify with the subject of the arbitration agreement. Reference of part of the  20 subject-matter of an action before the judicial authority to arbitration to which arbitration agreement applies, is not contemplated. If requirements of the ingredients of sub-section (1) of Section 8 are satisfied, the Court has no option or discretion, but it is mandatory for it to make reference of the subject-matter of the action before it to arbitration in accordance with the arbitration agreement; (6) Parties to the action before judicial authority and the arbitration agreement should be the same; (7) The application shall be accompanied by the original arbitration agreement or a duly certified copy thereof; (8) The judicial authority will not refuse making a reference under Section 8, merely on the ground that a dispute about existence and validity of the arbitration agreement or jurisdiction of the Arbitrator has been raised since the Arbitrator would have jurisdiction to decide these objections under Section 16 of the Act. The judicial authority before making reference would have to be satisfied that the subject-matter of the action before it and the subject of the arbitration agreement are identical, and may examine the arbitration agreement and the subject-matter of the action before it for giving a finding in this regard; (9) Unless the judicial authority before whom the application under Section 8 has been filed is a “Court”, as defined within the meaning of Section 42 read with clause (e) of Section 2 of the Act, the judicial authority shall not entertain subsequent proceedings arising under the arbitration agreement by virtue of Section 42 of the Act;  21 (10) After a reference of the subject of arbitration made by the judicial authority to an arbitration under Section 8, nothing remains to be decided in the action.” Refer Hindustan Petroleum Corpn. Ltd., vs. Pinckcity Midway Petroleums, (2003) 6 SCC 503 : 2003 (2) Arb LR 666 (SC) : AIR 2003 SC 2881. The Apex Court in the case of Rastriya Ispat Nigam Ltd. vs. Verma Transport Co., (2006) 7 SCC 275 : AIR 2006 SC 2800, has held that mere opposing for interim prayer cannot be termed as waiver. By opposing the prayer for interim injunction, the restriction contained in sub-section (1) of Section 8 was not attracted. Disclosure of a defence for the purpose of opposing a prayer for injunction would not necessarily mean that substance of the dispute has already been disclosed in the main proceeding. Supplemental and incidental proceedings are not part of the main proceeding. Photocopies of the lease agreements could be taken on record under Sec. 8 of Arbitration and Conciliation Act for ascertaining the existence of arbitration clause. Bharat Sewa Sansthan vs. U.P Electronics Corpn. Ltd. – (2007) 7 SCC 737. In Magma Leasing & Finance Ltd. vs. Potluri Madhavilata – (2009) 10 SCC 103, it was held that Section 8 is in the form of legislative command to the Court and once the prerequisite conditions as aforesaid are fulfilled, the Court must refer the parties to arbitration. Also refer Sundaram Finance Ltd. and another vs. T. Thankam – (2015) 14 SCC 444. In case of dispute before the consumer forums, the Section 8 does not bar the jurisdiction of consumer forums. Consumer forums not bound to  22 refer the matter to arbitral tribunal. Rosedale Developers Pvt. Ltd. vs. Aghore Bhattacharya and others, (2018) 11 SCC 337. Application for arbitration was moved after submission of first statement on the substance of dispute, but party which instituted civil suit did not object, held there was no bar preventing referral of dispute for arbitration. P. Ananda Gajapathi Raju vs. P.V.G. Raju (2000) 4 SCC 539 = AIR 2000 SC 1886. Also refer Hema Khattar and another vs. Shiv Khera (2017) 7 SCC 716. The arbitration agreement cannot be invoked against persons who were not parties to the agreement. Sandeep Kumar and others vs. Master Ritesh and others, (2006) 13 SCC 567. Complicated matters involving various questions and issues, if beyond purview of arbitration. Relegation to civil suit when warranted has been held in the case of N.Radhakrishnan vs. Maestro Engineers, (2010) 1 SCC 72. The above decision has been distinguished in Ranjit Kumar Bose and another vs. Anannaya Chowdhoury and another – (2014) 11 SCC 446 by stating that even if there is an arbitration agreement which is against to the provisions of special enactment which provides for bar of arbitration, then, Section 8 cannot be resorted to. When there is conflict between 1996 Act and Section 8 of 2008 Act, the latter shall prevail to the extent of conflict. There is no arbitration clause between the parties. Provisions of 1996 Act, thus, held, will have no application. Therefore, reference to arbitral tribunal will be governed by 2008 Act that is Bihar Public Works Contracts Disputes Arbitration Tribunal Act 2008. Bihar  23 Industrial Area Development Authority vs. Ramkant Singh- (2022) 4 SCC 489. If the first defence is not filed within the time stipulated by the statute, then, whether Section 8 petition is maintainable, has been held in the case of SSIPL Lifestyle Pvt. Ltd. vs. Verma Apparels (India) Pvt. Ltd. and another – 2020 SCC Online Del 1667, and it is further held that if written statement is not filed within the time stipulated then Section 8 application cannot be maintained. Arbitration clause/agreement between corporate debtor and its creditor does not oust the jurisdiction of NCLT. Tata Consultancy Services Ltd. vs. S.K. Wheels (P) Ltd. (Resolution Professional) -(2022) 2 SCC 583. In Cox & Kings Ltd. vs. SAP India Pvt. Ltd. & another – 2022 SCC Online SC 570, wherein, it is held that when there is a clause for amicable settlement, it has to be exhausted and then only they can have recourse under Section 11 of the Act. 9. Interim measures, etc., by Court.—(1) A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a Court.— (i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or (ii) for an interim measure of protection in respect of any of the following matters, namely:—  24 (a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement; (b) securing the amount in dispute in the arbitration; (c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence; (d) interim injunction or the appointment of a receiver; (e) such other interim measure of protection as may appear to the Court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it. (2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub-section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine. (3) Once the arbitral tribunal has been constituted, the Court shall not entertain an application under sub-section (1), unless the  25 Court finds that circumstances exist which may not render the remedy provided under section 17 efficacious. Section 9 confers vide ranging powers on the Court to order interim measures of protection which may be necessitated for preserving the assets from being frittered away or siphoned off during the pendency of arbitral proceedings, secure the evidence, issue directions qua third parties, order pre-award attachment, etc. It is in aid of and in furtherance of the arbitral process to make it effective. The object of Section 9 is to empower the Court under the 1996 Act, to grant interim measures for the preservation, interim custody or sale of goods which are the subject matter of the arbitration agreement; secure the amount in dispute, order detention, preservation or inspection of a property which is the subject matter of the dispute in arbitration; authorize any person to enter upon a land or building; take samples, or pass such orders as may be necessary or expedient for the purposes of obtaining full information or evidence. The Court may appoint a receiver in respect of the property which is the subject-matter of the arbitration or pass such interim measures of protection as may be just and convenient. Section 9 provides that the Court shall have the same power for making orders as it has for the purpose of, and in relation to any proceedings before it. Refer Modi Rubber Ltd. vs. Guardian International Corporation, 2007 (2) Arb LR 133 (Del) : (2007) 141 DLT 822. The substantive power conferred on the Court is given effect to by the procedural provisions contained in the CPC and the Evidence Act, 1872. The principles under Order XXXVIII Rule 39 of the CPC serve as a guidance for the exercise of power  26 under Section 9 of the 1996 Act. The source of power of the Court to grant interim relief is traceable to Section 94 read with Order XXXIX of the CPC, and in exceptional cases under Section 151 CPC. Refer Bharat Aluminium Co. vs. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552 at para 192 : 2012 (3) Arb LR 515 (SC) : 2012 (8) SCALE 333. The Limitation Act is applicable to arbitration proceedings as provided by Section 43 of the 1996 Act. In Adhunik Steels Ltd., vs. Orissa Manganese and Minerals Pvt. Ltd., N.N. Ojha vs. Prem Mehra, 2015 (1) Arb LR 252 (Delhi), the Supreme Court held that the general rules which govern the grant of interim injunction are attracted while dealing with an application under Section 9 of the 1996 Act. It is a well- recognized principle that when power is conferred under a special statute on an ordinary Court of the land, without laying down any special condition for exercise of that power, the general rules of procedure of that Court would apply. The words “and the Court shall have the same power for making orders as it has for the purpose and in relation to any proceedings before it” in Section 9 would indicate that the normal rules governing the Court for grant of interim orders would be applicable. The concept of prima facie case, balance of convenience, irreparable injury, and the concept of just and convenient must be taken into consideration while granting interim measures under Section 9 of the 1996 Act. Refer Adai Mehra Production Pvt. Ltd. vs. Mr. Sumeet P. Mehra and Mr. Puneet P. Mehra, 2014 (1) Arb LR 46 (Bombay) : 2013 (3) ABR 1273.  27 The silent features of interim measures of protection are: 1. An interim measure of protection pre-supposes the existence of a dispute, which is to be litigated or arbitrated. 2. Interim relief should normally be granted where it is necessary for the preservation of the assets of the party. The protection should be temporary in nature, till the final relief is granted by the tribunal. The interim relief should preserve the status quo till the final relief is granted. 3. The interim relief should not exceed the final relief claimed; it must be ancillary to, or in aid of the final relief. 4. In certain situations, it may be necessary for the Court to grant an interim measure ex-parte, prior to the issuance of notice. However, it must be followed by an inter partes order in compliance with the requirement of due process. 5. The Court may pass interim measures which may affect or compel third parties in control of the assets of a party to the arbitration proceedings, to comply with the provisional or interim measures. 2015 Amendment to Section 9 The 2015 Amendment has inserted two new sub-sections in Section 9 based on the recommendations of the 246 th Law Commission Report. The newly inserted sub-section (2) of Section 9 provides that the arbitral proceedings shall be commenced within a period of 90 days from the date when a Court passes an interim order prior to the commencement of arbitral proceedings. The  28 legislative intent is to ensure that a party who obtains a favorable order under Section 9 does not unnecessarily delay in initiating the arbitral proceedings. Refer Manbhupinder Singh Atwal vs. Neeraj Kumarpal Shah, (2019) 4 GLR 3229 : 2019 GLH (3) 234. Sub-section (3) provides that the Court will not entertain an application for interim relief under sub-section (1) after the arbitral tribunal has been constituted, unless the circumstances render the remedy under Section 17 as ineffective or inefficacious. This amendment is aimed at minimizing intervention by the Court after the arbitral tribunal is constituted. The 2015 Amendment Act has contemporaneously effected substantive amendments to Section 17 of the 1996 Act so as to empower the arbitral tribunal to exercise powers analogous to Section 9 by the Court. Seat of arbitration – change of venue – if changes the seat of arbitration, held change of venue does not result in change of seat of arbitration. BBR (India) Pvt. Ltd. vs. S.P.Singla Constructions Pvt. Ltd. 2022 SCC Online SC 642. Power of Court to pass interim orders and principles applicable, have been dealt with by the Apex Court by stating that the principles governing grant of interim injunction under Order 39 of CPC and Specific Relief Act would be applicable to exercise of power under Section 9 of the Act. Aravind Constructions Co. (P) Ltd. vs. Kalinga Mining Corpn. (2007) 6 SCC 798. Also refer Adhunik Steels Ltd. vs. Orissa Manganese and Minerals (P) Ltd. (2007) 7 SCC 125. Factors to be taken into consideration for grant of interim injunction. Refer Transmission Corpn. of A.P. Ltd. vs. Lanco Kondapalli Power (P) Ltd., (2006) 1 SCC 540. Also refer  29 Hindustan Construction Co. Ltd. vs. Union of India, (2020) 17 SCC 324 = AIR 2020 SC 122. Challenge to order of interim measures during the pendency of arbitration proceedings and the arbitration award came to be set aside by the Court, there is nothing to adjudicate legality of order granting interim measures. National Hydro Power Corporation Ltd. vs. Patel Engineering Ltd. (2019) 13 SCC 629. CHAPTER III Composition of arbitral tribunal 10. Number of arbitrators.—(1) The parties are free to determine the number of arbitrators, provided that such number shall not be an even number. (2) Failing the determination referred to in sub-section (1), the arbitral tribunal shall consist of a sole arbitrator. 11. Appointment of arbitrators.—(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties. (2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators. (3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator. (4) If the appointment procedure in sub-section (3) applies and—  30 (a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or 11 (b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by 1[the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court]; (5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court. (6) Where, under an appointment procedure agreed upon by the parties,— (a) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or (c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may request the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.  31 (6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement. (6B) The designation of any person or institution by the Supreme Court or, as the case may be, the High Court, for the purposes of this section shall not be regarded as a delegation of judicial power by the Supreme Court or the High Court. (7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to 3[the Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court is final and no appeal including Letters Patent Appeal shall lie against such decision. (8) The Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court, before appointing an arbitrator, shall seek a disclosure in writing from the prospective arbitrator in terms of sub-section (1) of section 12, and have due regard to— (a) any qualifications required for the arbitrator by the agreement of the parties; and (b) the contents of the disclosure and other considerations as are likely to secure the appointment of an independent and impartial arbitrator. (9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, 5[the Supreme Court or the person or institution designated by that Court] may appoint an  32 arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities. (10) The Supreme Court or, as the case may be, the High Court, may make such scheme as the said Court may deem appropriate for dealing with matters entrusted by sub-section (4) or sub-section (5) or sub-section (6), to it. (11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to different High Courts or their designates, The High Court or its designate to whom the request has been first made under the relevant sub- section shall alone be competent to decide on the request. (12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10) arise in an international commercial arbitration, the reference to the “Supreme Court or, as the case may be, the High Court” in those sub-sections shall be construed as a reference to the “Supreme Court”; and (b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10) arise in any other arbitration, the reference to “the Supreme Court or, as the case may be, the High Court” in those sub-sections shall be construed as a reference to the “High Court” within whose local limits the principal Civil Court referred to in clause (e) of sub-section (1) of section 2 is situate, and where the High Court itself is the Court referred to in that clause, to that High Court. (13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the Supreme Court or the High Court or the person or institution  33 designated by such Court, as the case maybe, as expeditiously as possible and an endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party. (14) For the purpose of determination of the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal, the High Court may frame such rules as may be necessary, after taking into consideration the rates specified in the Fourth Schedule. Explanation.—For the removal of doubts, it is hereby clarified that this sub-section shall not apply to international commercial arbitration and in arbitrations (other than international commercial arbitration) in case where parties have agreed for determination of fees as per the rules of an arbitral institution. In the case of SBP and Company vs. Patel Engineering, reported in (2005) 8 SCC 618, wherein, it is stated that the controversy with respect to nature of the power of the Chief Justice under Sec. 11 was referred to a 7 Judge Constitution bench in the above case, which overruled earlier decision in Konkan Railways vs. Rani Construction and redefined the nature of power under Sec. 11. The scope of power under Sec. 11 was now held to be a Judicial power which could only be delegated to another Judge and not to any other institution. There should be valid arbitration agreement, and party to the arbitration agreement must make an application under Sec. 11 and that he has approached appropriate High Court.  34 Excepted matters The Arbitrator / Tribunal has the jurisdiction to decide only those disputes which are covered by the arbitration clause in a contract. If any issue is specifically excluded from the purview of the arbitration clause, it will not be arbitrble, and is referred to as an “Excepted Matter”. If there is a dispute between the parties on the issue of arbitrability, it will be decided by the Arbitrator under Sec. 16 which enshrines the kompetenz kompetenz principle. Refer the decision in the case of Arasmehta Captive Power Company Ltd. and Another vs. Lafarge India Pvt. Ltd. reported in (2013) 15 SCC 414 = AIR 2014 SC 525. Also refer Mohammed Masroor Shaikh vs. Bharath Bhusan Gupta and others – (2022) 4 SCC 156. Sec. 11 not applicable to statutory arbitrations under special enactments such as Electricity Act, 2003. Refer the decision in the case of Gujarat Urja Vikas Nigam Ltd. vs. Essar Power Ltd. – (2008) 4 SCC 755 = AIR 2008 SC 1921. When there is serious allegation of fraud, same is not arbitrable. Refer the decision in the case of N.Radhakrishnan vs. Maestro Engineers and Others reported in (2010) 1 SCC 72, Bharath Rasiklal Ashra vs. Gautham Rasiklal Ashra reported in (2012) 2 SCC 144 = AIR 2011 SC 3562. The view taken in Radhakrishnan case supra has been diluted considerably after post amendment in the case of Ayyasami vs. A.Paramashivam and Others – (2016) 10 SCC 386 = AIR 2016 SC 4675 by holding that mere allegation of fraud simpliciter is not a ground to nullify the effect of the arbitration agreement between the parties. This view has been affirmed by Apex Court in Rashi Raza vs. Sadaf Aktar reported in (2019) 8 SCC 710.  35 Sec. 11 cannot be invoked where the arbitration clause provides for institutional arbitration refer (2014) 11 SCC 560 in the case of Antrix Corporation Ltd. vs. Deva’s Multimedia Pvt. Ltd. Sec. 11 cannot be invoked where an application for reference under Sec. 8 has been rejected by the Judicial Authority. Refer Anil vs. Rajendra, reported in (2015) 2 SCC 583. Death of a party will not discharge the arbitration agreement. Ravi Prakash Goel vs. Chandra Prakash Goel and Another (2008) 13 SCC 667. In case of International Arbitration, it is emphasized that the concern of the Court is to ensure neutrality, impartiality and independence of the third arbitrator is important. Choice of the parties has little, if anything to do the choice of the Chief Justice of India or his nominee. Refer Reliance Industries Ltd. vs. Union of India – (2014) 11 SCC 576 = AIR 2014 SC 2342. When one of the parties agrees for seat of Arbitration at Delhi and therefore the proceedings for appointment of arbitral tribunal would lie with the Courts at Delhi. Priya Malay Sheth vs. VLcc Health Care Ltd – 2022 SCC Online Bom 1137. Also refer decision in the case of Swadesh Kumar Agarwal vs. Dinesh Kumar Agarwal and Others reported in 2022 SCC Online SC 556. Impact of Section 60(6) of the Insolvency and Bankruptcy Code on Section 11 of the Act, has been discussed in the case of  36 New Delhi Municipal Council vs. Vinosha India Ltd. – 2022 SCC Online SC 546. Forfeiture of Right to Nominate Parties are free to agree on a procedure for appointment of an Arbitrator or Tribunal for the adjudication of their disputes. However, if under an agreed procedure, a party fails to make the appointment within 30 days from the receipt of the request, or the two Arbitrators nominated by the respective parties, fail to agree on the name of a preceding arbitrator within 30 days from the date of their appointment, the default procedure under Sec. 11 can be invoked. Refer Datar Switch Gears Ltd. vs. Tata Finance Company Ltd. (2000) 8 SCC 151, Bharat Sanchar Nigam Ltd. and Another vs. Motorola India Pvt. Ltd. (2009) 2 SCC 337 = AIR 2009 SC 357. The above case has been affirmed in the case of Punjaloyd Ltd. vs. Patronet MHB Ltd. reported in (2006) 2 SCC 638, (2013) 4 SCC 35, (2016) 230 DLT 235. In Union of India vs. BESCO Limited – AIR 2017 SC 1628, the Arbitration Clause provided that the sole arbitrator shall be a gazetted Railway Officer. The general conditions and special conditions of the contract specifically provided that in the event of any dispute or difference arising under the contract, the same shall be referred to a sole arbitrator or a person appointment by the general manager. When the authority fails to appoint arbitrator, it forfeits the right to make an appointment. In such circumstances, under Section 11(6) of the Act, the Chief Justice has power to appoint arbitrator. Also refer (2014) 9 SCC 288, SLP (civil) No.12076/2019.  37 The 2019 Amendment The object of the amendment is to eliminate judicial intervention at the threshold, and confirm the power of appointment on the institution created by the Arbitration Council of India under Section 43-I of part 1-A of the Act, which will conduct the arbitration proceedings. 11-A. Power of Central Government to amend Fourth Schedule.—(1) If the Central Government is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, amend the Fourth Schedule and thereupon the Fourth Schedule shall be deemed to have been amended accordingly. (2) A copy of every notification proposed to be issued under sub-section (1), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue of the notification or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed upon by the both Houses of Parliament. 12. Grounds for challenge.—(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances,— (a) such as the existence either direct or indirect, of any past or present relationship with or interest in any of  38 the parties or in relation to the subject-matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality; and (b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of twelve months. Explanation 1.— The grounds stated in the Fifth Schedule shall guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an arbitrator. Explanation 2.— The disclosure shall be made by such person in the form specified in the Sixth Schedule. (2) An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall, without delay, disclose to the parties in writing any circumstances referred to in sub- section (1) unless they have already been informed of them by him. (3) An arbitrator may be challenged only if— (a) circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or (b) he does not possess the qualifications agreed to by the parties. (4) A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.  39 (5) Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator: Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing. The Section 12 of the 1996 Act is modeled on Article 12 of the UNCITRAL Model Law, and Articles 11 and 12 of the UNCITRAL arbitration rules as revised in 2010. Bias Section 12 of the Act obligates an arbitrator to disclose in writing prior to his appointment, such facts which may give rise to justifiable doubts as to his independence or impartiality. The neutrality of an arbitrator is critical to the integrity of the dispute resolution process. Independence and impartiality are the hallmarks of an arbitration proceeding. It is a fundamental rule of a fair adjudicatory process that the arbitrator decides the dispute without bias. Sub-sections (1) and (2) of Section 12 casts a statutory duty on the arbitrator to make a mandatory disclosure in writing of any circumstances which may give rise to justifiable doubts as to his independence or impartiality. This obligation is an ongoing obligation which continues throughout the arbitral proceedings. V.K. Dewan & Co. vs. Delhi Jal board (2010) 15 SCC 717. What the law stipulates as a disqualification is the existence of such facts and circumstances as are likely to give rise to justifiable doubts of  40 the independence and impartiality of the arbitrator. Alcove Industries Ltd. vs. Oriental Structural Engineers Ltd., 2008 (1) Arb.LR 393 (Del) : ILR (2008) 1 Del 1113. These obligations apply to all arbitrators, including party-nominated arbitrators. In Manak Lal vs. Prem Chand Singhvi, 1957 SCR 575 : AIR 1957 SC 425, Gajendargadkar, J. speaking for the Court states: “It is well settled that every member of a tribunal that is called upon to try issues in judicial or quasi-judicial proceedings must be able to act judicially; and it is of the essence of judicial decisions and judicial administration that judges should be able to act impartially, objectively and without any bias. In such cases the test is not whether in fact a bias has affected the judgment; the test always is and must be whether a litigant could reasonably apprehend that a bias attributable to a member of the tribunal might have operated against him in the final decision of the tribunal. It is in this sense that it is often said that justice must not only be done but must also appear to be done.” The rule against bias is one of the fundamental principles of natural justice, which applies to all judicial and quasi-judicial proceedings. Even though the relationship between the arbitrator and the parties is contractual in nature, the partiality of an arbitrator, would render him ineligible to conduct the arbitration. The genesis behind this rationale is that even when an arbitrator is appointed in terms of the contract between the parties, the arbitrator must remain independent of the parties. Also refer  41 Voestalpine Schienen GmbH vs. Delhi Metro Rail Corp. Ltd. (2017) 4 SCC 665 : 2017 (2) Arb LR 1 (SC) : AIR 2017 SC 939. Test The test of likelihood of bias is whether a party could justifiably have a reasonable apprehension that there are circumstances likely to affect the decision of the arbitrator. Suspicion of bias must be based on cogent material and reasonable grounds, and not the mere apprehension of a whimsical person. While determining a challenge to the bias of an adjudicator, it becomes necessary to consider whether there is a reasonable ground for assuming the possibility of bias which is likely to produce a reasonable doubt in the minds of the litigant, or the public at large, about the fairness in the administration of justice. Also refer Manak Lal vs. Prem Chand Singvi & Ors. 1957 SCR 575 : AIR 1957 SC 425. After the 2015 Amendment, Section 12(5) prohibits the employee of one of the parties from being appointed as an arbitrator. In BCCI vs. Kochi Cricket (p) Ltd., this Court held that the provisions of the Amendment Act, 2015 (w.e.f. 23 October 2015) cannot have retrospective operation in the arbitral proceedings already commenced, unless the parties agree otherwise. Rajasthan Small Industries Corporation Ltd. vs. Ganesh Containers Movers Syndicate (2019) 3 SCC 282 : 2019 (1) Arb LR 296 (SC) : 2019 (1) SCALE 670. Also refer Aravali Power Co. Pvt. Ltd. vs. Era Infra Engineering Ltd. (2017) 15 SCC 32 : 2017 (5) Arb LR 226 (SC) : AIR 2017 SC 4450. Also refer S.P. Singla Constructions Pvt. Ltd. vs. State of Himachal Pradesh & Ors., (2019) 2 SCC 488 : 2018 (6) Arb LR 355 (SC) : 2018 (15) SCALE 421.  42 Independence and Impartiality Section 12 uses the terms ‘independence’ and ‘impartiality’ disjunctively. The distinction between the two expressions is not defined in the Act. Independence is a situation of fact or Law, capable of objective verification, while impartiality is more a mental state, which will necessarily be subjective. An arbitrator would be independent if he has no relationship, personal or pecuniary, with any of the parties to the arbitration before him, and yet may not be impartial. Independence relates to the relationship between the arbitrator and the parties, whether professional, financial, business or otherwise. It indicates prior or current personal, social or business contract between them. The test is a subjective on which is inferred from the facts and circumstances surrounding the arbitrators exercise of the arbitral functions. Impartiality Impartiality is understood to be the relation between the arbitrator the subject matter of the dispute. The test of impartiality is whether the parties have a legitimate apprehension, or a reasonable doubt that the arbitrator may have a biased or prejudiced mind with respect to the disputes before him. However, if an arbitrator develops an opinion about the case at an early stage in the proceedings, it would not constitute a case of partiality, even if he expresses such views.  43 Former Employee Section 12(1) as it stood before the Amendment Act did not disqualify a former employee from acting as an arbitrator, provided there were no justifiable doubts as to his independence and impartiality. A former employee may not be disqualified from being appointed as an arbitrator, and would not fall within the rigors of Section 12(5) read with Entry 1 of the Seventh Schedule. Entry 1 indicates that a person who is related to a party as an employee, consultant, or an advisor, is disqualified to act as an arbitrator. In State of Haryana vs. G.F. Toll Road Pvt. Ltd., (2019) 3 SCC 505 : 2019 (1) Arb LR 111 (SC) : 2019 (1) SCALE 134, the Supreme Court held that the 1996 Act, prior to 2015 Amendment Act, a former employee was not disqualified from acting as an arbitrator, provided there were no justifiable doubts as to his independence or impartiality. In this case, an arbitrator who was in the employment of the State over 10 years ago, would make the allegation of bias clearly untenable. An arbitrator who has “any other” past or present “business relationship” with the parties is disqualified. In Ladli Construction Co. Pvt. Ltd. vs. Punjab Police Housing Corporation Ltd., & Ors., (2012) 4 SCC 609 : 2012 (1) Arb LR 503 (SC) : AIR 2012 SC 1508, the arbitration clause provided that if disputes arose between the parties, it would be referred to arbitration by the chief engineer of the Punjab Police Housing Corporation. On the contract being terminated, the contractor made an application for appointment of an arbitrator in terms of the clause of the agreement. After the chief engineer  44 assumed office of the arbitrator, the contractor raised an objection stating that the appointment was not acceptable to him. In the application, no allegation of any bias or hostility was made against the named arbitrator. The award rendered by the arbitrator reveled that full opportunity was provided to the contractor to put forth his case. In these circumstances, the Court held that there is no justifiable circumstance which would enable the contractor to escape from the bargain made under the contract to have the disputes resolved through the agreed process. The parties were fully aware of the role, authority and position of the chief engineer. In this view of the matter, the parties stood bound by the contract, unless a good or valid ground was made for his exclusion. In the decision in the case of H.R.D. Corporation (Marcus Oil & Chemical Division) vs. GAIL (India) Ltd., (2018) 12 SCC 471, it is held that the rendering of an award by an arbitrator in previous arbitration proceedings between the parties would not by itself be a ground of reasonable likely hood of bias unless it is shown that the substance lead to a fair minded and informed observer to conclude that there is a real possibility that the tribunal will not bring an open mind to the proceedings. The arbitrator under the duties to disclose any potential conflict or interest, or circumstances which may raise doubts with respect to his impartiality and independence. If arbitrator failed to disclose about his engagement as an adviser/technical expert in some other arbitrations of one of the parties, it can be treated as a ground which gives raise to justifiable doubt as held in the case of Lacnco – Rani (JV) vs. NHAI reported in 2017 (1) Arb LR 265 (Delhi).  45 Where, under any agreement between the parties, a person falls within any of the categories set out in the Seventh Schedule, he is, as a matter of law, ineligible to be appointed as an arbitrator. The only way in which this ineligibility can be removed, again, in laws, is that the parties may after disputes have arisen between them, waive the applicability of Sec.12(5) by an express agreement in writing. Ellora paper Mills Ltd. vs. State of Madhya Pradesh – (2022) 3 SCC 1. The legal representatives of the deceased party to the agreement have got right to represent the deceased and their petition for appointment of arbitrator can be entertained. Refer the decision in the case of Priya Rishi Bhuta & Another vs. Vardhaman Engineers & Builders & others reported in 2022 SCC Online Bom 1136. Burden of Proof Burden of Proof is on the party who asserts that the arbitrator lacks requisite qualifications by adducing evidence. 13. Challenge procedure.—(1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator. (2) Failing any agreement referred to in sub-section (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section(3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal.  46 (3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge. (4) If a challenge under any procedure agreed upon by the parties or under the procedure under sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award. (5) Where an arbitral award is made under sub-section (4), the party challenging the arbitrator may make an application for setting aside such an arbitral award in accordance with section 34. (6) Where an arbitral award is set aside on an application made under sub-section (5), the Court may decide as to whether the arbitrator who is challenged is entitled to any fees. Party Autonomy Section 13(1) gives full effect to the principle of party autonomy on the procedure for challenging an arbitrator. The arbitral tribunal is the central institution in an arbitration proceeding for the impartial settlement of the disputes between the parties. The statute grants autonomy to the parties to agree on the procedure for challenging an arbitrator. The reasons for such challenge are laid down in sub-section (3) of Section 12 of the 1996 Act. Limits to Party Autonomy The autonomy of parties to choose a challenge procedure is subject to two restrictions viz:  47 (i) Section 13(1) states that the procedure chosen by the parties will be subject to the provisions of sub-section (4). Sub- section (4) of Section 13 states that if the challenge before the arbitral tribunal is unsuccessful, then the arbitral proceedings shall continue, and the arbitral tribunal shall make the arbitral award; (ii) the procedure opted by the parties must be in conformity with the provisions of Section 18 of the 1996 Act, which embody the basic notions of fairness in treating the parties with equality and providing a full opportunity to present their case. Any procedure which is violative of Section 18 would render the award vulnerable to a challenge under Section 34 of the Act. SECTION 13(3) and 13(4) Continuation of Arbitration Proceedings during Pendency of Challenge Unless the challenged arbitrator withdraws from his office, or the other party agrees to the challenge, the arbitral tribunal shall proceed to decide the challenge as per sub-section (3) of section 13. If the challenge is successful, the mandate of the arbitrator terminates. However, the termination of the mandate of the arbitrator would not result in termination of the arbitral proceedings. The arbitrator would be replaced by a substitute arbitrator under Section 15 of the Act. If the challenge to the arbitrator before the tribunal is unsuccessful, the tribunal shall continue the proceedings as mandated by sub-section (4) of Section 13 and make the arbitral award. A party aggrieved by the rejection of the challenge cannot take recourse to the Court at the intermediate stage of proceedings.  48 The aggrieved party has a remedy only after the final award is passed, at the stage of filing objections under Section 34, as provided by sub-section (5) of Section 13 of the Act. G.S. Developers & Contractors Pvt. Ltd. vs. Alpha Corp. Development Pvt. Ltd. & Anr. (2019) 176 DRJ 473 : (2019) 261 DLT 533. The legislative intent is to obviate any delay in the conclusion of the arbitral proceedings and making of the final award. Section 13(5) Section 13(5) provides that the award made under Section 13(4) may be challenged in the application for setting aside the award under Section 34. Under the 1996 Act, no recourse is provided to the Court against the order rejecting the challenge on the grounds of lack of independence or impartiality, at the intermediate stage of the proceedings. This is in contrast with the Model Law which contemplates one appeal to the Court against the order of the arbitrator rejecting the challenge. The challenge on this ground can be maintained before the Court only at the stage of filing objections to the award under Section 34. Refer Prem Kumar Gupta vs. IREO Waterfront Pvt. Ltd. & Anr., 2015 (5) Arb LR 530 (P&H) : (2015) 179 PLR 331. The legislative intent is clear that Parliament did not contemplate that there should be any judicial interference with the order of the tribunal on the ground of bias at an intermediate stage of the arbitration proceedings. The Act requires that the plea must be raised at the earliest point of time before the tribunal itself; if the tribunal rejects the challenge, the mandate of the statute is that the arbitration will proceed under Section 13(4), and the challenge can be made only at the post-award stage under Section 34. Refer  49 Progressive Career Academy Pvt. Ltd. vs. FIIT JEE Ltd., 2011 (2) Arb LR 323 (Del) (DB) : (2011) 180 DLT 714 : 2011 VIAD (Delhi) 283. Followed in SAIL vs. British Marine PLC, 2016 (6) Arb LR 183 (Delhi) : (2016) 234 (DLT) 99. If a challenge is made to an arbitrator making allegations under Section 12 of the Act, which are rejected by the arbitrator under sub-section (4) of Section 13, the arbitrator will proceed in the matter, and make the award. The award may be challenged on the grounds contained in Section 34, including the ground that the award is contrary to the public policy of India. Since a remedy is provided under sub-section (5) of Section 13 to raise a challenge under Section 34 at the post award stage, a revision petition under Article 227 is not maintainable before the High Court. Refer SBP & Co. vs. Patel Engineering Ltd. (2005) 8 SCC 618 : 2005 (3) Arb LR 285 (SC) paras 44 and 45 : AIR 2006 SC 450. In case the challenge is successful, and the arbitrator is removed from his office or the award of the tribunal rejecting the challenge is set aside by the Court under Section 34, then Section 13(6) provides that the Court has discretion to decide as to whether an arbitrator is entitled to any fees on the principle of quantum meruit or otherwise. Refer Swadesh Kumar Agarwal vs. Dinesh Kumar Agarwal, 2022 SCC Online SC 556. The order of the Commercial Court refusing into refer the party into arbitration is an appealable order under Section 37(1)(a) (as amended) and in view of availability of the statutory remedy, writ petition is not maintainable. N.N.Global Mercantile (P) Ltd. vs. Indo Unique Flame Ltd. (2021) 4 SCC 379.  50 14. Failure or impossibility to act.—(1) The mandate of an arbitrator shall terminate and he shall be substituted by another arbitrator, if— (a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and (b) he withdraws from his office or the parties agree to the termination of his mandate. (2) If a controversy remains concerning any of the grounds referred to in clause (a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate. (3) If, under this section or sub-section (3) of section 13, an arbitrator withdraws from his office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply acceptance of the validity of any ground referred to in this section or sub-section(3) of section 12. The provisions from Sections 12 to 15 form a complete scheme with the underlying objective of securing the sanctity and probity of the arbitration proceedings. The grounds for challenge under Sections 12 and 13 are different from the provisions of Section 14 of the Act. Section 12 deals with the grounds for challenging an arbitrator if circumstances give rise to justifiable doubts as to his impartiality and independence. If the appointment is challenged on the grounds indicated in sub-section (3) of Section 12, the remedy is provided under sub-section (2) of Section 13, which provides the procedure for challenging an arbitrator. If the challenge before the arbitral tribunal is unsuccessful, the  51 proceedings will continue, and the tribunal will proceed to make the award. There is no recourse to the Court at an intermediate stage of the proceedings. The legislative intent is clear that a challenge to the award on the grounds of bias, lack of independence, or impartiality, can take place before the Court at the Section 34 stage, and not prior thereto. Refer Progressive Career Academy Pvt. Ltd. vs. FIIT JEE Ltd., 2011 (2) Arb LR 323 (Del) (DB). In contrast, a challenge under Section 14 for termination of the mandate of an arbitrator on the grounds mentioned in Section 14(1)(a) is made before the Court, to determine whether the arbitrator is de jure or de facto unable to perform his functions. The Act provides direct recourse to the Court under sub-section (2) of Section 14 at the intermediate stage of the proceedings. It is not necessary to go to the arbitral tribunal, if the grounds for failure or impossibility to act are made out. Refer HRD Corporation (Marcus Oil & Chemical Division) vs. GAIL (India) Ltd. (2018) 12 SCC 471 : 2017 (5) Arb LR 1 (SC) : 2017 (10) SCALE 371. If a party fails to raise the challenge under Section 13(2) within 15 days of becoming aware of the constitution of the arbitral tribunal, or circumstances referred to in Section 12(3), could invoke Section 14 by contending that the arbitrator had become de jure unable to perform his functions. The width and amplitude of Section 14 is more comprehensive. The provisions of Sections 13 and 14 are not mutually exclusive. The Court recognised that if a challenge is unsuccessful under Section 13, the remedy would lie to the Court under Section 34. However, where a party had not filed an application under Section 13, it would not be precluded from raising the challenge under Section 14.  52 Section 14 is independent of Section 13. Section 14 provides for termination of the mandate of an arbitrator if he becomes de jure or de facto unable to perform his functions. The de jure inability would necessarily comprehend all conceivable legal shortcomings of the arbitrator, which would disqualify him from discharging the role of an arbitrator. Section 28(3) mandates the arbitral tribunal to act in accordance with the terms of the contract. Section 28 is applicable to all stages of the proceedings before the arbitral tribunal, and not merely to the making of the award. The de jure or de facto inability of the arbitrator to perform his functions, or failure of the arbitrator to act without undue delay has to be viewed in the context of the agreement between the parties. In National Highways Authority of India vs. Sheladia Associates Inc., 2009 (3) Arb LR 378 (Del), para 32 & 37. and Cinevistaas Ltd. vs. Prasar Bharati, 2008 (4) Arb LR 112 (Del), the agreement stipulated that the proceedings would be conducted at Delhi. However, the arbitrator persisted on holding the proceedings at Bhuwaneshwar. The Court held that the action of the arbitrator would fall under failure to act in terms of the agreement without undue delay. The holding of proceedings at Bhuwaneshwar was contrary to the terms of the agreement, inspite of objections being raised by one of the parties. Section 14 was found to be attracted, and the mandate came to be terminated. The proceedings under Section 14 of the Act are summary in nature. If the Court finds that the ground of de jure or de facto inability, or for other reasons the arbitrator fails to act without undue delay, the mandate shall stand terminated. However, if the  53 challenge is found to be frivolous and vexatious, the petition will be dismissed. Refer National Highways Authority of India vs. K.K. Sarin, 2009 (3) Arb LR 241 (Del), para 34. SECTION 14(1) De Jure Inability The first ground refers to where an arbitrator becomes de jure unable to perform his functions. Gurcharan Singh Sahney & Ors. Vs. Harpreet Singh Chhabra & Ors., 2016 (5) Arb. LR 65 (Hyderabad) (DB). See also Shyam Telecom Ltd. vs. ARM Ltd. 2004 (3) Arb LR 146 (Del). The de jure inability referred to in clause (a) of Section 14(1) is the impossibility which occurs by operation of law, leading to his inability to function due to factors personal to the arbitrator. Priknit Retails Ltd. vs. Aneja Agencies 2013 (2) Arb LR 35 (Del). Conflicting Views There has been a divergence of views by various High Courts with respect to the remedies available to a party under Section 14, after raising an unsuccessful challenge to an arbitrator under Section 13 of the Act. A single judge of the Delhi High Court in Delhi State Industrial & Infrastructure Development Corporation Ltd. vs. Integrated Techno System Pvt. Ltd. and Anr., 2009 (2) Arb LR 493 (Delhi), held that the mandate of an arbitrator cannot be terminated on the ground that he was acting in a biased manner, or that he was conducting the proceedings in an improper manner, or that he was not following the judicial discipline, or that he was acting arbitrarily under Section 14 of the Act. The High Court held that such grounds may be good grounds for challenging the award  54 under Section 34 but cannot be grounds for interference with the arbitral proceedings under Section 14. However, another single judge of the Delhi High Court took a divergent view in Raj Kumar Dua vs. Naresh Adhalakha, 2010 (3) Arb LR 301 (Delhi). See also Vilas Laxmanrao Kaware vs. Ganesh builders & Ors., 2005 (supp.) Arb LR 364 (Bom), holding that there was no inconsistency in the remedies available to a party under Sections 12 and 13 on the one hand, and Section 14 on the other. The invocation of the remedy by a party does not restrict that party from invoking the other remedy as well. Fails to Act without Undue Delay for Other Reasons Section 14 would be attracted only if undue delay occurs. Sub-sections (1), (2) and (3) of Section 14 envisage a situation where the arbitrator may, on his own recuse himself on an objection being taken, or where both parties agree to terminate his mandate. Section 14(1) prescribes an automatic termination of the mandate of the arbitrator in the eventualities stated therein. The parties may, by consent, extend the time for making the award, or by their conduct of participating in the arbitration proceedings, Army Welfare Housing Organisation vs. Mathur & Kapare Associates Pvt. Ltd., 2017 (1) Arb LR 114 (Del), or waive the stipulation of the period prescribed at the time of entering upon reference. Post the 2015 amendment, Section 29-A of the Act has been incorporated which states that an award shall be made within a period of 12 months from the date of the tribunal entering upon reference. This provision was inserted with the intent of expediting the dispute resolution process, and avoidance of undue delay by  55 the arbitrator or tribunal. The parties may however, by consent, enlarge this period by a further 6 months. If the proceedings are even then not completed, a request would have to be made to the Court. SECTION 14(2) Appointment of Substitute Arbitrator The 2015 Amendment to Section 14 clarifies that on the termination of the mandate of an arbitrator, a substitute arbitrator will be appointed. Bharat Broadband Network Ltd. vs. United Telecoms Ltd., 2019 (3) Arb LR 1 (SC) : 2019 (6) SCALE 491 : 2019 (2) WLN 85 (SC) : AIR 2019 SC 2434. SECTION 14(3) Withdrawal by Arbitrator, or by Agreement between Parties, would not Imply Admission of Guilt If an arbitrator withdraws from office, or the parties agree to terminate the mandate of the arbitrator, either under Section 14 or 13(3), this would not imply the acceptance of any ground that may be raised under Section 12(3). Regarding termination of mandate refer the latest decision of Delhi High Court in the case of National Highway Authority of India vs. MEP Chennai Bypass Toll Road Pvt. Ltd. and Another reported in 2022 SCC Online Del 1436. Also refer Ellora Paper Mills Ltd. case which is already been stated under Section 12 of the Act. 15. Termination of mandate and substitution of arbitrator.—(1) In addition to the circumstances referred to in  56 section 13 or section 14, the mandate of an arbitrator shall terminate,— (a) where he withdraws from office for any reason; or (b) by or pursuant to agreement of the parties. (2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. (3) Unless otherwise agreed by the parties, where an arbitrator is replaced under sub-section (2), any hearings previously held maybe repeated at the discretion of the arbitral tribunal. (4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal. SECTION 15(2) Substitute Arbitrator Sub-section (2) of Section 15 states that on the termination of the mandate of an arbitrator, a substitute arbitrator will be appointed in accordance with the rules applicable to the appointment of the arbitrator being replaced. S.P. Singla Construction vs. Union of India, 2009 (1) Arb LR 1 (Del) : (2009) 156 DLT 625. This would imply that the parties would follow the same procedure provided in the contract for appointment of the arbitrator, or the institutional rules of the body conducting the arbitration, or the statutory rules under which the arbitration is being conducted.  57 Sub-section (2) of Section 15 uses the word “shall” which indicates the legislative intent that the provision is mandatory in nature. The object of the 1996 Act is that in cases where the mandate of an arbitrator terminates for any reason, the substitute arbitrator must be appointed, so as to obviate any delay in the continuation of the arbitral proceedings. Shailesh Dhairyawan vs. Mohan Balkrishna Lulla, (2016) 3 SCC 619 : 2015 (6) Arb LR 79 (SC) : 2015 (11) SCALE 684. In ACC Limited vs. Global Cements Ltd., (2012) 7 SCC 71 : 2012 (3) Arb LR 329 (SC) : AIR 2013 SC 3824. See also N.B.C.C. Ltd. vs. J.G. Engineering Pvt. Ltd., (2010) 2 SCC 385 : AIR 2010 sc 640 : 2010 (1) SCALE 138, the arbitration clause provided that if any question or difference or dispute arises between the parties at any time, then such dispute shall be referred either to Mr. N.A. Palkhivala or Mr. D.S. Seth, whose decision shall be final and binding on both the parties. When disputes arose between the parties, both the named arbitrators had expired. It was sought to be contended that the arbitration clause would not survive as the two named arbitrators were the only persons in whom the parties had reposed faith to adjudicate the disputes. The Court held that the mandate of Section 15(2) is that the procedure agreed upon by the parties for the appointment of the original arbitrator is equally applicable to the appointment of a substitute arbitrator, even if the agreement does not specifically state the same. The legislative policy is to facilitate the parties to resolve their dispute by arbitration, and promote the efficacy of the arbitration clause, except if there is any prohibition or debarment contained therein.  58 Forfeiture of the Right to Nominate In SAP India Pvt. Ltd. vs. Cox & Kings Ltd., Commercial Arbitration Petition (Lodg.) No.351 of 2019, decided by the Bombay High Court on 30 April 2019, the arbitration clause provided for adjudication of disputes by a three-member tribunal, where each of the parties would nominate one arbitrator, and the two arbitrators would appoint a third arbitrator. Disputes and differences arose between the parties. The petitioner invoked the arbitration agreement and nominated a retired judge as its arbitrator. The respondent, however, refused to nominate an arbitrator since it took the plea that the petitioner had played a fraud on the respondent by inducing it to enter into the agreement. In these circumstances, the petitioner approached the Court by filing an application under Section 11(6) of the Act. The Court appointed an arbitrator on behalf of the respondent. The two arbitrators appointed the presiding arbitrator. The tribunal entered upon reference. Subsequently, the arbitrator appointed by the Court on behalf of the respondent requested for recusal as he was appointed to a public office. The issue arose as to whether the vacancy was to be filled up by the respondent in terms of the arbitration agreement, or the appointment was to be made by the Court under Section 11(6) of the Act. The High Court held that since the respondent had initially refused to nominate the arbitrator, which led to the Court exercising its default power under Section 11, the right of the respondent to appoint the substitute arbitrator stood forfeited. S.L.P. (Civil) No.12076 of 2019, which was dismissed by the Supreme Court vide Order dated 15 may 2019. The phrase “according to the rules” in sub-section (2) of Section 15 would take within its ambit, the procedure followed under Section 11 for appointment of the substitute arbitrator.  59 SECTION 15(3) Sub-section (3) of Section 15 of the 1996 Act provides that where the arbitral tribunal has been re-constituted, or a substitute arbitrator has been appointed, it is open to the re-constituted tribunal, or substitute arbitrator, to call upon the parties to explain in detail as to what had transpired during the previous hearings. It is left to the discretion of the re-constituted tribunal/substitute arbitrator to decide the extent to which the previous hearings are required to be re-heard Atul R. Shah vs. V. Vrijlal Lalloobhai and Co., AIR 1999 Bom 67 : 1999 (1) Mh LJ 629 : 1998 (4) Bom CR 867. The proceedings would continue from the stage where the mandate of the original arbitrator gets terminated and would not commence de novo. A de novo trial would give an unnecessary opportunity to a dishonest litigant to obliterate the evidence already recorded, which may have been adverse to them. The Karnataka High Court in the case of Royal Orchid Hotels Ltd. vs. Rock Reality Pvt. Ltd. reported in ILR 2021 Kar 2373 = 2020 SCC Online Kar 3414 has held about effect of amendment to Section 11 under amendment Act 2015 and it is further held by referring to judgment of the Apex Court in Mayavati Trading Pvt. Ltd., (2019) 8 SCC 714, wherein, it was held that omission of Section 11(6A) would not be resuscitate the law that was prevailing prior to amendment Act of 2015, rather the entire scheme of 2019 amendment is to strengthen and deepen what was sought to be achieved by insertion of Section 11(6A), that i.e., to confirm power of Court to examination of existence of arbitration agreement, nothing more, not