P M Somani (proprietor) 01 September 2017

Objection to arbitration proceedings termination order

There was continuing arbitration proceedings, at beginning stage, before an arbitrator. I am defedant out of 3 defendants. The arbitrator demanded deposit against his fees in equal portion from both parties, i.e., claimants and defendants. The claimants agreed to deposit the amount of their part, but the defendants denied to deposit the amount. Consequently, the arbitrator demanded full amount of deposit from the claimants, u/s 38(2). The claimants accepted to deposit , only the amount of their part and denied to deposit full amount of deposit.. On denying by the claimants, to deposit full amount , the arbitrator terminated the arbitration proceedings,by an order u/s 38(2), on ground of non-deposit of the amount against fees.

Now, the claimants have approached, u/s 34, 38 and 39, before the District and Session Judge, challenging the order of the arbitrator and the claimants want to seek relief, by setting aside the order of the arbitrator and to get order of the court, to direct the arbitrator for initiating again, arbitration proceedings, on depositing the amount of their part i.e. 1/2 of total deposit and to create lien on award , for the balance 1/2 amount of deposit.

Please, advise me that

(i) have the claimants approached before the appropriate court, to submit their objection to the order .

(ii) Are the claimants have right to get initiated, again, arbitration proceedings, which once have been terminated, by the arbitrator?

Please , advise.

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3 Replies

Siddharth Srivastava (Advocate) 01 September 2017

You may initiate proceeding U/s. 11 arbitration act for either change of Arbitrator or for appointment of new arbitrator. The order of Arbitratir is not proper as if any party does not pay the directed fee then he has power to either withhold the copy of award and not to supply the copy of award to defaulting part or to withhold the final order or to write complaining to appointing authority. Since you have already invoked arbitration proceeding hence you cannot initiate fresh arbitration. Sidharth 9811776422

Anil Upadhyay (Lawyer) 02 September 2017

In your query you have mentioned that the arbitration proceedings were in initial stage and when Arbitrator pronounced order, in respect to arbitrator fees, then parties were not complying the order.

In other words parties refused to pay Arbitrator's Fees and because of non prosecution Arbitrator terminated/suspended arbitration proceedings. Now you want to challenge it ?

There is schedule in Arbitration Act which defines Arbitrator fees and it is to be paid accordingly. Parties had refused to pay the fees and he has suspended the proceedings, thereafter. You will not get the remedy untill / unless parties agrees to pay him the fees.

P M Somani (proprietor) 04 September 2017

Shri Anilji Upadhyay,

I want to clarify as follows:-

I am defendant in this case. The arbitrator has terminated the arbitration proceedings. Thereafter, the claimants has approached to the District and Session Judge,,challenging the order of the arbitrator , u/s 34, 38 and 39,. I am not seeking any remedy from the District and Session Judge. I am asking that what relief the claimants can get from the District and Session Judge.