Section 11 Orders not subject to review—Indian Supreme Court denounces dilatory tactics in arbitration (Hindustan Construction Company Ltd v Bihar Rajya Pul Nirman Nigam Ltd and Others)
Arbitration analysis: The Supreme Court of India confirmed its pro-arbitration bias by ruling that an order under section 11 of the Arbitration and Conciliation Act, 1996 (‘Act’), is not amenable to review by the same court, and emphasizing that judicial interference must be limited in order to prevent a party from resorting to procedural sabotage. The court was considering a challenge to an order of the Patna High Court appointing an arbitrator (under s 11 of the Act), more than three years after the respondent, a public sector undertaking, had participated in more than seventy hearings in the arbitration. The court upheld the arbitration agreement by severing the portion contravening a non-derogable provision of the Act (Seventh Schedule read with s 12(5)), while nevertheless holding the parties to their contractual bargain to arbitrate. The court also distinguished between cases in which a waiver may be implied owing to a party’s failure to object to alleged procedural impropriety (under s 4), and cases where the arbitrator is disqualified from acting under the Act (under s 12). The Supreme Court held that in the latter case, merely participating in the arbitration and seeking an extension of the arbitrator’s mandate, would not override the requirement of an express written waiver of such disqualification (under the proviso to s 12(5)). While the court noted that this was a fit case for imposing costs, it refrained from doing so, but instead issued a stern warning to the respondent, noting that public officers are custodians of public faith, not mere administrators, and that any repetition of such conduct may invite adverse remarks or personal accountability. Written by Shaneen Parikh, partner at Cyril Amarchand Mangaldas and Anjali Kumari, associate at Cyril Amarchand Mangaldas.