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Government of Haryana v. G.F. Toll Road Pvt. Ltd.

In this case, parties entered into a contract of Construction, Operation and Maintenance for Gurgaon Faridabad Road and Ballabgarh Sohna Road. The contract stated in its Arbitration clause that in case a dispute arises, three arbitrators will form the Arbitral Tribunal where each party will select one Arbitrator and the third Arbitrator shall be appointed as per the rules of the Indian Council of Arbitration (ICA).

The issues which caused the dispute between the parties were:

  • Whether the State's petition is maintainable?
  • Is the Arbitral Tribunal illegal?

When the dispute finally arose between the parties, they each nominated an Engineer in chief. The respondent nominated Mr. Surjeet Singh and the State nominated Mr. M. K. Aggrawal as their nominee, regarding this the ICA raised an objection against the nomination of Mr. M. K. Aggrawal as he was an ex-employee of the State and hence there are justifiable grounds with respect to impartiality. Thereafter, the ICA appointed an Arbitrator on behalf of the State.

The State then filed a case under Section 15 of the Arbitration and Conciliation Act, 1996 claiming that the Arbitral Tribunal is illegal.

Judgement (District Court)

The District Court of Chandigarh stated that the objection should be raised under Section 16 of the Arbitration and Conciliation Act, 1996 in front of the Tribunal therefore, the Petition is not maintainable since the Arbitral Tribunal has already been formed. Whereas, the State filed a Civil Revision Appeal with the Punjab and Haryana High Court as it was not satisfied with the order.

Judgement (Punjab and Haryana High Court)

The High Court also stated that the Appeal is not maintainable and that the objection must be raised under Section 16 of the Arbitration and Conciliation Act, 1996 in front of the Arbitral Tribunal. Again, unsatisfied with the order the state then filed an Appeal before the Supreme Court.

Judgement (Supreme Court)

The Supreme Court of India stated that the Act does not disqualify a former employee from being the Arbitrator until and unless there are justifiable grounds of partiality therefore, the mentioned situation for the bias against Mr. M. K. Aggrawal is untenable and hence, for the role of an Arbitrator Mr. M. K. Aggrawal will be considered qualified.

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- By Sushmita Biswas

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