Advocate Commissioner cannot be appointed by the Arbitrator under Section 26 or 27 of the Arbitration and Conciliation Act, 1996 unless the person is an subject expert.

In the matter of M/s Punarnava Ayurveda Hospital Pvt Ltd V The Arbitrator for NH 66 & District Collector

Facts:

The present case came before Kerala High Court. In the present case the Petitioner’s land was acquired by the Special Duty Collector (competent authority) under the National Highways Act, 1956 (hereinafter referred to as the N.H. Act). The competent authority determined the compensation payable to the petitioner and passed award as per the N.H. Act. However, the Petitioners being dissatisfied with the amount of compensation invoked Section 3G (5) of the N.H. Act which provides that in case of a dispute regarding the amount of compensation an arbitrator shall be appointed to resolve the dispute and the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as A & C Act) shall apply to such an arbitration.

The Petitioners preferred an application before the Ld. Arbitrator under Section 26 of A & C Act for appointment of an Advocate Commissioner with a Surveyor and Technical person to conduct inspection of the property which was dismissed by the Arbitrator. The Petitioner thereafter filed a Writ Petition against the dismissal of the application contending that under Section 26 of the A & C Act, the Arbitrator has jurisdiction to appoint an Advocate Commissioner with Surveyor and Technical person and to report to the Arbitrator for adjudication of the dispute and rejection of the application amounts to jurisdictional error.

Issues:

The first issue before the Hon’ble Court was that whether the Arbitrator had the authority to appoint an Advocate Commissioner under Section 26 or Section 27 of the A & C Act.

The second issue was that whether the Writ Petition filed against an Order of the Arbitrator was maintainable.

Observation:

The Court observed that Section 26 of A & C Act empowers the Arbitrator to appoint experts to report on specific issues to be determined by the arbitral tribunal. The said provision cannot be invoked for appointment of an Advocate Commissioner unless the concerned advocate is an expert in relation to any specific issue to be determined by the arbitral tribunal.

The provisions under Section 27 of the A & C Act can be invoked to request the Court for its assistance in taking evidence like issuance of Commission for recording evidence of witnesses beyond the competence of the arbitral tribunal but cannot be invoked for appointment of an Advocate Commissioner to conduct inspection of the property to ascertain the market value of the land.

Furthermore, the Hon’ble Court also stated that extent of Judicial intervention in arbitration proceedings is limited by the non obstante clause of Section 5 of the Arbitration Act, hence in this matter such an intervention would go against this principle. Thus, the Court held that an arbitrator cannot appoint an Advocate Commissioner under Section 26 and 27 of the Arbitration Act.

While dealing with the second issue the Hon’ble Court relied upon the case of SBP and Co v. Patel Engineering Ltd (AIR 2006 SC 450) to state that every Order passed by the Arbitral Tribunal cannot be corrected by writ courts under Article 226 or 227 of the Constitution.