SPEECH FOR THE RESPONDENT

Members of the tribunal, esteemed colleagues good day. My name is Kimi and along with my
co-counsels, we represent the Respondent, i.e., The Sunrise Egg Solutions in today’s
arbitration proceedings.

For the first 10 minutes, I will be dealing with issue 1 and 2 with respect to the validity of the
arbitration clause and appointment of Mr. Aman Mathur as sole arbitrator.

Issue 1 pertains to whether the arbitration clause has been validly invoked, I would like to
make three submissions with respect to that- first is the non adherence to procedural
requirements for invoking arbitration, this argument can further be divided into three parts-
first as per the supply agreement and CISG, second as per SIAC rules and last the wrongful
appointment of the arbitrator

As per the CISG, the party that has committed a breach cannot rely on the breach of contract
by the other contracting party if the breach was itself caused by the alleging party. Article 80
prohibits the use of “ first cause breach, then seek a remedy for breach. Now the contract says
that a party may terminate a contract on the basis of another party committing a breach but in
the present case the claimant themselves terminated the contract prematurely and thereby
impeding the respondents from delivering goods. The termination notice was sent on 2nd
January 2023 and arbitration was invoked on 6th January which did not allow for the
designated period of 30 days to elapse and hence the termination was therefore premature.

Now as per the SIAC rules, in case it was held that where the preconditions are not met, the
arbitration was held to be invalid. Furthermore in Union of India v. Bharat Engineering
Corporation supported the view that any premature invocation of the clause without
observing the agreed notice period is invalid. Even as per section 11(2) of the conciliation act,
the parties are free to agree to the procedure of appointing arbitrator subject to the conditions
which are not met since there was an agreed procedure, the parties failed to act under that.
Furthermore with regards to the challenge of the arbitrator, in a case the Supreme court held
that the opposing party may schedule a meeting even after 30 days but before an application
under section 11 has been filed. In a case, the appointment was deemed legitimate even after
it was made after 30 days after the arbitration notification as it took place before the section
11(6) application was filed.

According to section 12(5) of the Indian A&C act, despite any prior agreement to the
contrary, if any arbitrator so appointed falls under the category of seventh schedule shall be
ineligible to be appointed. The arbitrator has had a relationship of a consultant in past with a
party, the arbitrator currently advises one of the parties and has a standing relationship with
the appointing party in this case. In a case, the arbitrator was removed after the confirmation
by the president due to being ineligible because of vested interest. In the present case, ,
according to Indian Arbitration act, it makes Mr Aman Mathur ineligible to be appointed as
sole arbitrator thereby drawing the inference that the arbitration clause was invalidly invoked.

Next, I would like to submit to the members of the Tribunal that one of the significant matters
in dispute does not fall under an arbitrability clause. The claimants have charged us with the
charges of fraudulent conduct, and in a case the court has held that the arbitrator cannot have
jurisdiction over the cases involving the allegations of fraud and it is to be settled only in
court of law corroborated by the detailed pieces of evidence. These matters require thorough
examination and support of evidence. The reason behind resolving these conflicts in civil
court is because the arbitrator's examination of summary, evidence and procedures are not
legally enforceable. And since we have been charged for the fraudulent conduct we believe
we deserve the opportunity to present our full fledged case as per the required procedure in
the court of law.

Lastly, under this issue I would like to submit that the arbitrator should not decide its own
jurisdiction. As per the competence- competence doctrine, the arbitral tribunal concludes that
they possess the authority to determine their own extent of jurisdiction. However, this does
not mean an arbitral tribunal can settle the extent of their jurisdiction disputes once for all
without being subject to judicial review or reconsideration. Even though the doctrine is
widely approved, it does not find its way into many legal institutions and legislations due to
its undermining effect on jurisdiction of court. The Indonesian arbitration legislation does not
specifically recognize the doctrine of competence-competence. China’s arbitration laws also
provides the authority to resolve the jurisdictional disputes being reserved to Chinese courts.
A few U.S. state courts have also suggested that arbitral tribunals must suspend the arbitral
proceedings pending interlocutory judicial resolution of jurisdictional dispute since they do
not have competence to consider challenges to the validity of the arbitration agreements.
Article 7 of the Swiss Law on Private International law, grants parties access to interlocutory
judicial determinations of jurisdictional objections before the final decision of the arbitrator.
The jurisdictional disputes to be resolved by the arbitration as provided in the dispute
resolution clause is not a unanimous view, the German legislature has now made a mandatory
prohibition from parties agreeing to arbitrate jurisdictional disputes in a binding manner.
French law also rejects the enforceability of agreements to finally resolve jurisdictional
disputes by arbitration.

The doctrine gives power to determine issues which may or may not be in the arbitral
tribunal’s jurisdiction in the first place and the Courts are deprived of authority to decide
jurisdictional issues before arbitration. Essentially, the judiciary must wait until the arbitral
tribunal renders an award before intervening causing significant delays, loss of time and
resources. Therefore, the doctrine which gives unprecedented power to the arbitral tribunal
determining its own extent of power and jurisdiction should not be followed and in the
present case scenario, the arbitrator should not have the jurisdiction to adjudicate upon the
disputes referred to arbitration.
If the Tribunal is satisfied with the submission on issue 1, the counsel would now move
to issue 2 pertaining to the legality and validity of appointment of mr. Aman Mathur as
sole arbitrator.

The submission on this issue is structured on two fold grounds- first is unilateral appointment
of the arbitrator is not valid and second the appointment is illegal due to the conflict of
interest.

Proceeding with the first submission on the issue on procedural inequality, Respected
Tribunal it is important to note that The principle of equality and the right to present one’s
case ‘should be observed not only by the arbitral tribunal but also by the parties when laying
down any rules of procedure. In Francen in a judgement the court in the case of Sociétés
BKMI et Siemens v. Société Dutco, Judgment, (1992), ASA Bulletin 10(2), 295, set aside an
arbitral award where in a three party dispute the appointment of the own arbitrator was made
by the two of the respondents rather than joint one.

Now coming to the ineligibility to appoint a arbitrator, section 12 of the A&C act expressly
mentions that it supersedes any prior contract to the contrary where an arbitrator being
appointed is ineligible if he falls under the category of seventh schedule, The point 5 of this
schedule the who itself has any controlling influence is ineligible to be appointed as or
appoint an arbitrator. The court in the case of Trf Ltd v. Energo Engineering Projects Ltd.
(2019) SCC Online SC 547 held that when someone is ineligible to be appointed as an
arbitrator via means of operation of regulation, he can't similarly hire some other man or
woman as an arbitrator. Therefore, the unilateral appointment of arbitrator should be declared
not valid as it gives one handed power to one party and makes the dispute resolution clause
invalid.

Proceeding to the next submission on this issue, Members of the Tribunal even if in
arguendo the clause is valid , the appointment is still illegal due to the conflict of
interest.

Members of the Tribunal the rule 14 of the SIAC says that arbitrators may be challenged if
circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or
independence. The fundamental purpose of the “independence” requirement is to ensure that
there are no connections, relations, or dealings between an arbitrator and the parties that
would compromise the arbitrator’s ability to be impartial. Section 12 of the Indian Arbitration
and Conciliation Act expressly mentions that “it supersedes any prior contract to the contrary
where an arbitrator being appointed is ineligible if he falls under the categories mentioned in
the seventh schedule.” Point 1 of the Seventh Schedule mentions that an arbitrator is
ineligible “if The arbitrator is an employee, consultant, advisor or has any other past or
present business relationship with a party.” Since Mr. Aman Mathur had previously been an
advisor for Gourmet Foods on their product launch, he is ineligible to be the sole arbitrator.
The court in the case of Era International v. Aditya Birla Global Trading India Pvt. Ltd,
(2024) SCC OnLine Bom 835 held that even if parties agree to institutional arbitration, it
does not exclude the Court's power to decide on the termination of an arbitrator's mandate if a
controversy arises.” And therefore, even if the appointment of Mr. Aman Mathur was
validated and approved by the registrar61 under the SIAC Rules62, it is still open to
challenge on the grounds of ineligibility. Summing it up, even if the clause is valid the
appointment of the arbitrator is still illegal and invalid due to conflict of interest and doubts
regarding impartiality and independence.