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Thereby the arbitration and Conciliation Act1996 made a
significant contribution to the Alternative Dispute Resolution
means and it has remained so.
However, there remain a few loopholes in the legislation; that on
occasions form a distinct part of conflict in the course of
Alternative Dispute Resolution. It is pertinent to notice Section
13 of the Act, which states the challenge procedure to remove an
arbitrator from the tribunal.
Section 13 (3) states as follows;
(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.
It is to be noted; that the arbitrator who is being challenged;
remains
in the arbitral tribunal and hence decides about his own
competence as
an arbitrator; which is completely against the principle of
natural
justice.
Equity has often been regarded as a synonym for Natural
Justice by jurists from the dawn of civilization and fairness is
an integral part of it. The principle of
Nemo Judex in Causa Sua
that is
no man shall be the judge of his own cause
remains as one of the
bedrocks of natural Justice. Under Section 13(3) of the Act the
Arbitrator himself would adjudicate his own competence by being
part of
the tribunal, thereby creating doubts of biasness and unfair
justice to
be meted.
The competence of the arbitrator on the ground of biasness
has been laid down by the Hon'ble Supreme Court in the case of
Jiwan
Kumar Lohia vs Durgadutt Lohia
The test of likelihood of bias is whether a
reasonable person, in possession of relevant information would
have
thought that bias was likely and whether the person concerned was
likely
to be disposed to decide the matter only in a particular way.
In the present scenario, that the fact that a judge is
adjudicating his
own competence, certainly forms a reasonable ground for
apprehension of
bias. The Hon'ble Apex Court in
Bihar State Mineral Development,
Corp.
v. Encon Builders (I) Pvt. Ltd, while referring to Russell on
Arbitration, stated:
A distinction is made between actual bias and apparent bias.
Actual
bias is rarely established but clearly provides grounds for
removal.
Moreover, there is a suspicion of bias, which has been variously
described as apparent or unconscious or imputed bias. In such
majority
of cases it is often emphasized that the challenger does not go so
far
as to suggest the arbitrator is actually biased, rather some form
of
some objective apprehension of bias exists.
In relevance to the present picture, there is certainly a clear
unambiguous apprehension of bias that is to be created out of the
peculiar situation as the arbitrator becomes the judge of his own
cause.
The proper approach for the judge is not to look at his own mind
and ask himself, however, honestly,
am I biased
but to look at the
mind
of the party before him. Therefore it is to be carefully perceived
that
the challenge to the arbitrator adjudicating his own competence is
in no
manner a doubt or imputation to the character of the arbitrator,
instead
it is the apprehension of biasness that forms the ground of appeal
that
has arisen from a situation. Hence it has to be acknowledged that
Section 13(2) is speculative and needs clarity.
As Salmond said
Natural justice is justice in deed and in truth,
while legal justice is justice declared and recognised by law and
enforced in law courts. He maintains that natural justice is the
ideal
and the truth, of which legal justice is the more or less
imperfect
realisation and expression.
Therefore, we can always correct the
legal
justice so as to be in consonance with justice in deed and truth.
In
regards to Section 13 of the Arbitration and Conciliation Act,
1996 the
need arises for an express provision, stating the challenged
arbitrator
not to be a part of the tribunal deciding his competence.
To, conclude the lines of Lord Hewart C.J would be aptly suited;
It is
of fundamental importance that justice should not only be done but
should manifestly and undoubtedly been seen to be done.
 The
author can be reached at :sambit@legalserviceindia.com
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