The removal of an arbitrator on the grounds of bias has always been debated. Recent trends reflect increasing judicial intervention rendering the basic objective of least judicial intervention1 redundant. The grounds for challenging an arbitrator’s mandate are provided under section 12 of the Arbitration and Conciliation Act, 1996 (the Act) which include the requirement of impartiality. According to the Act the procedure for challenge can be decided by the parties otherwise any aggrieved party may make an application challenging the arbitral mandate within fifteen days of the knowledge of such alleged bias. The arbitrator decides on the challenge. Nowhere the Act permits the parties to challenge on Arbitration on the grounds of lack of independence or impartiality and resort to the courts for termination of mandate. Under the Indian Laws the aggrieved party has no option but to continue with the arbitral proceedings until the award is delivered. The application for setting aside an award would then be made in accordance with the Section 34 of the Act.

The point of controversy arises hereinafter; under the Model law if the arbitrator rejects the challenge it can be appealed against in a Court whose decision is considered final. But under the scheme of the Act once the challenge under section 13 is rejected the parties must wait till the final award is made and made an application under section 34 thereafter. Taking advantage of the ambiguous language of various provisions of the Act the judiciary has made a series of extravagant decisions against the spirit of the Act. The act of the Parliament deviating from the procedure contained in the Model Law and instead opting for a procedure as is matted out in the provisions of the Act has to be taken into consideration before making such adverse interpretations.

In the process, various High Courts have entertained applications under section 14 to decide on the issue of bias. Section 14 provides for challenge of arbitral mandate before a court on the grounds of de jure and de facto inability where the tribunal isfunctioning with undue delay. In its essence section 14 warrants that the arbitral proceedings are conducted efficiently2 but the Gauhati High Court observed that section 14 comprehends all legal shortcomings existing or acquired by the arbitrator which lead to disqualification including bias.3 In order to arrive at such a conclusion the Court made a distinction between a challenge made within the prescribed time and challenge not made within the prescribed time under section 13. This interpretation transgresses the very object of making a timely challenge under section 13 according to which a party failing to make a timely challenge is barred from raising any such objections in subsequent proceedings.4Allowing a challenge to the arbitral mandate on the grounds of bias under section 14 after the expiry of the time limited provided under section 13 would frustrate the basic objective of speedy resolution of dispute.

On other occasions the courts seem to be completely ignorant of the scope of their authority vis-à-vis section 14. In O.P.B.K Construction (P) Ltd., v. Punjab Small Industries and Export Corporation Ltd.5, the court terminated the mandate of an arbitrator without any consideration as to its powers under the Act. The court observed:

“the court will not be a powerless and silent spectator for travesty of justice and the parties cannot be left at the mercy of such an arbitrator whose mind is preset and also would be unnecessary to continue with the proceedings.”

In National Highway Authority of India v. K.K. Sarin6, it was observed that de jure inability of the arbitrator and bias vitiates the entire arbitral proceedings and renders them nugatory. But this kind of inability would fall within the purview of Section 14 if such a conclusion can be made without a detailed enquiry i.e. if the bias on the part of the Arbitrator is made out clearly and prima facie the mandate is liable to be terminated.

All the views taken by the respective High Courts seem flawed on the frontier of legislative intent. It has to be understood that the challenge to the arbitral mandate for alleged bias is dealt under section 13 whereas; section 14 is limited to the arbitrator’s failure or impossibility to act. The scope of Article 14 and the inclusion of de jure and de facto inability is to ensure efficiency in the arbitration proceedings and prevent undue delay. It would be erroneous to assume that section 14 includes in itself the issue of bias. These decisions lead to a direct conflict between sections which are supposed to form part of a single scheme.

The most appropriate interpretation was made in Progressive Career Academy (P) Ltd. v. FIIT JEE Ltd.7, wherein the court held that section 13 is an autonomous provision which reckons the challenge procedure to an arbitrator on the grounds set in section 12. The challenge must be made before the tribunal itself and if rejected the party must wait until the final award is passed and later approach the court under section 34. The court also made a reference to section 5 of the Act and held that unless there is an express provision to deal with a particular situation the courts must refrain from assuming jurisdiction for interference.

Therefore, the challenge of the arbitrator under Section 13 on the grounds of partiality and lack of independence should be devoid of judicial intervention during the arbitral proceedings and before the award is delivered. Section 14 provides for immediate court intervention of three grounds as provided under Section 14 (1) (a) which doesn’t include bias. The approach adopted by the Delhi High Court in the Progressive Career Academy Case is in consonance with the scheme and the object of the Act.