John P. Vettichira & Thresiamma Vettichira v M/S DLF Southern Towns Private Limited (AR No.75 of 2017, High Court of Kerala, Ernakulam)
Case Details & Bench
- Court
- High Court of Kerala
- Hon'ble Judges
- Shaji P. Chaly
- Judgment Date
- 2017-10-13
- Court Decision / Holding
- The court directed that a disclosure statement under section 11(8) of the Act be called from the proposed arbitrator (Sri Anil Xavier) and placed before the court for immediate action. The court also indicated the appointment of the arbitrator in due course, following receipt of the disclosure, effectively enabling an independent arbitrator to be appointed in this dispute.
- Final Disposition
- Appointment of an independent arbitrator subject to disclosure under section 11(8) of the Act, 1996
Parties to the Case
Appellants / Petitioners
- John P Vettichira
- Thresiamma Vettichira
Respondents
- M/S DLF Southern Towns Private Limited
Legal Representation & Advocates
Counsels for Petitioners
- • Sri Philip T. Varghese
- • Sri Thomas T. Varghese
- • Sri Achu Subha Abraham
Counsels for Respondents
- • Sri M. Gopikrishnan Nambiar
- • Sri P. Gopinath
- • Sri K. John Mathai
- • Sri Joson Manaval
- • Sri Kuryan Thomas
- • Sri Paulose C. Abraham
Case Synopsis & Summary
This is an AR 11(6) petition under the Arbitration and Conciliation Act, 1996, relating to an Annexure A1 agreement for constructing an apartment building between the petitioners (John P. Vettichira and Thresiamma Vettichira) and the respondent (M/S DLF Southern Towns Private Limited). Clause 49 of Annexure A1 mandates arbitration under the Act, with a sole arbitrator appointed by the respondent’s Managing Director; the award to be final and binding, and the allottee waives objection to the appointed arbitrator. After a dispute arose and a notice under Annexure A5 was issued, the respondent did not reply and the petition was filed seeking appointment of an independent and impartial arbitrator. The respondent’s counter-affidavit disputed the claims. A central issue is whether the arbitrator can be an employee or connected with the respondent, given the Seventh and Fifth Schedule restrictions, and whether the court should appoint an independent arbitrator given the serious ongoing dispute. The court notes HRD Corporation (Marcus Oil and Chemical Division) v. Gail (India) Ltd (SC) to interpret the schedules and ultimately directs that a disclosure statement under section 11(8) be sought from the proposed arbitrator (Sri Anil Xavier) and the matter be placed before the court for further action, effectively paving the way for appointment of an arbitrator.
Provisions of Law Cited
Legal Doctrines & Maxims
- Independence and impartiality of arbitrator
- Prior involvement in the dispute does not automatically disqualify an arbitrator (interpretation of Fifth/Seventh Schedule)
- Disclosure under section 11(8) of the Act
Submissions & Arguments
Contentions of Appellants / Petitioners
The petitioners rely on Clause 49 of Annexure A1, which provides that any disputes under the agreement are to be referred to arbitration under the Act, with a sole arbitrator to be appointed by the Managing Director of the respondent and the award to be final and binding. They assert that, given the serious ongoing dispute, there is a need for an independent and impartial arbitrator, not tainted by links to the respondent, and they sought a panel of independent arbitrators under Annexure A5. They rely on the Supreme Court’s HRD Corporation v. Gail India Ltd decision to argue that prior involvement by an arbitrator with the same establishment does not automatically render them ineligible under the Fifth/Schedule provisions. The petitioners request the court to issue a disclosure under section 11(8) and to proceed with appointing an independent arbitrator to ensure fairness and impartiality in the resolution of the dispute.
Contentions of Respondents
The respondent contends that the arbitrator can be an employee of the respondent and that there is no automatic disqualification under the relevant schedules. They argued that there are numerous proceedings involving the same advocate and that the appointment by the Managing Director should not be disturbed, invoking the terms of the arbitration clause and the need for an efficient process. They further challenge the appointment on grounds of possible conflicts and prior engagements but concede that the Schedule VII parameters are not easily invoked to disqualify the proposed arbitrator. Ultimately, they failed to demonstrate a strict legal disqualification under Schedule VII, and the court is urged to consider the respondent’s position that independence could be preserved without precluding the current appointment.
Cited Precedents (1)
| Case Name | Citation | Treatment | Explanation |
|---|---|---|---|
| HRD Corporation (Marcus Oil and Chemical Division) v. Gail (India) Limited | 2017(5) Arb. LR 1 (SC) | Positive | The Supreme Court held that prior involvement of an arbitrator in related matters does not automatically trigger disqualification under the Fifth and Seventh Schedules; this guided the Kerala High Court to consider appointing an arbitrator despite the respondent’s background and to require disclosure under section 11(8). |
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Extracted Judgment Text
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