{"id":336112,"date":"2024-11-28T09:00:24","date_gmt":"2024-11-28T03:30:24","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=336112"},"modified":"2024-11-28T09:31:36","modified_gmt":"2024-11-28T04:01:36","slug":"unilateral-appointment-of-an-arbitrator-the-lack-of-clarity-in-the-judicial-approach-and-the-way-forward","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/28\/unilateral-appointment-of-an-arbitrator-the-lack-of-clarity-in-the-judicial-approach-and-the-way-forward\/","title":{"rendered":"Unilateral Appointment of an Arbitrator: The Lack of Clarity in the Judicial Approach and the Way Forward"},"content":{"rendered":"
\n

T<\/span>he issue of the validity of the appointment of a unilaterally appointed arbitrator has continued to remain a vexed question of law and has been the subject of numerous decisions of the Supreme Court and various High Courts in recent times.<\/p>\n

Considering the complexity of the judicial terrain on the unilateral appointment of an arbitrator, an analysis of judicial precedent does not reveal straightforward answers on what would constitute a “unilateral” appointment, as there are many variations and nuances that arise and that depend on the nature of the appointment process and what in fact qualifies as “unilateral”.<\/p>\n

This article traces the evolution of the judicial approach on unilateral appointment of arbitrators as well as the prevailing position of the Supreme Court on this issue. The aim is to highlight the inconsistencies in the jurisprudence, especially the recent cases, and emphasise on the need for clarity and consistency in the law, as well as discuss the approach that can be adopted by courts to determine if an appointment process is indeed an unfair one.<\/p>\n

In the landmark case of Perkins Eastman Architects DPC<\/span> v. HSCC (India) Ltd.<\/span>1<\/sup><\/a> (Perkins<\/span>), the Supreme Court held that a clause that enables an official (like the Managing Director) of a company to appoint an arbitrator would be invalid if the official himself was disqualified from being an arbitrator as per the criteria of ineligibility provided in Section 12(5) of the Act2<\/sup><\/a> read with the Seventh Schedule. As per the dispute resolution clause in Perkins<\/span>3<\/sup><\/a>, it was only the Managing Director of the respondent who had the power to appoint a sole arbitrator.<\/p>\n

The decision in Perkins<\/span>4<\/sup><\/a>, followed the decision in TRF Ltd.<\/span> v. Energo Engg. Projects Ltd.<\/span>5<\/sup><\/a> (TRF<\/span>), in which case the dispute resolution clause mandated that the sole arbitrator could either be the Managing Director of the respondent or his nominee. The three-Judge Bench of the Supreme Court in TRF<\/span>6<\/sup><\/a> decided that it would not be permissible to allow the Managing Director who was statutorily ineligible to be an arbitrator himself, to nominate an arbitrator. The statutory ineligibility in question was on account of Section 12(5) of the Act which when read together with Entry 1 of the Seventh Schedule7<\/sup><\/a>, disqualified a person from being appointed if they were to be an employee, consultant, advisor or if he had any other past or present business relationship with a party.8<\/sup><\/a><\/p>\n

The decision in Perkins<\/span>9<\/sup><\/a> extended the rationale of TRF<\/span>10<\/sup><\/a> to cases where the Managing Director of one of the parties is not to act as an arbitrator himself but only to appoint another arbitrator.<\/p>\n

Perkins<\/span> held at para 2011<\/sup><\/a>:<\/p>\n

20.<\/span> If, in the first category of cases, the Managing Director was found incompetent, it was because of the interest<\/span> that he would be said to be having in the outcome or result of the dispute. The element of invalidity would thus be directly relatable to and arise from the interest that he would be having in such outcome or decision. If that be the test, similar invalidity would always arise and spring even in the second category of cases. If the interest that he has in the outcome of the dispute, is taken to be the basis for the possibility of bias, it will always be present irrespective of whether the matter stands under the first or the second category of cases.<\/span> (emphasis added)<\/p>\n

The focus in Perkins<\/span>12<\/sup><\/a> rightly was on bias of an arbitrator, and such bias permeating any decision of appointment by the appointing authority of a nominee arbitrator. It did not matter if such authority was not itself an arbitrator, but merely had the right to appoint. This is the logical extension in Perkins<\/span>13<\/sup><\/a> of the holding in TRF<\/span>14<\/sup><\/a>, since in TRF<\/span>15<\/sup><\/a> the basis for the ineligibility was not the possibility of bias in appointing a nominee but the fact that the party who itself is ineligible under the Seventh Schedule loses the power to nominate someone else, upon incurring this ineligibility.16<\/sup><\/a> As the Court in TRF<\/span>17<\/sup><\/a> framed it: “once the infrastructure collapses, the superstructure is bound to collapse”.18<\/sup><\/a><\/p>\n

To further emphasise the necessity of having the dual qualities of independence and impartiality in an arbitrator, Perkins<\/span>19<\/sup><\/a> also cited the Single Judge Bench decision of the Supreme Court in Voestalpine Schienen GmbH<\/span> v. DMRC Ltd.<\/span>20<\/sup><\/a> (Voestalpine<\/span>). In Voestalpine<\/span>21<\/sup><\/a>, the contract between the parties i.e. the contractor (the petitioner) and the governmental entity (the respondent) contained an arbitration clause which gave the contractor the right to select its nominee arbitrator from a panel of five arbitrators that the respondent would select from a larger panel. The respondent itself would also choose an arbitrator from the same five-member panel, and the two nominee arbitrators would choose the third arbitrator from the same list who would act as the presiding arbitrator.<\/p>\n

Voestalpine contested this because it argued that the five-member panel consisted of serving or retired engineers of government departments or public sector undertakings which would be contrary to Section 12(5) of the Act, read with Entry 1 of Seventh Schedule to the Act.22<\/sup><\/a><\/p>\n

However, the Court held as follows:<\/p>\n

    \n
  1. \n

    Simply because the nominee arbitrator concerned is a retired officer who retired from the Government or other statutory corporation or public sector undertaking (PSU) and had no connection with Delhi Metro Rail Corpn. (DMRC) (the respondent), he should not be treated as ineligible to act as an arbitrator merely on the ground of bias or possibility of bias. Had this been the intention of the legislature, the Seventh Schedule would have covered such persons as well. The very reason for empanelling these persons was to ensure that technical aspects of the dispute are suitably resolved by utilising their expertise.23<\/sup><\/a><\/p>\n<\/li>\n

  2. \n

    The respondent was entitled to pick 5 arbitrators from a list of 31 options and forward their names to the petitioner to select one out of the 5 as its nominee arbitrator. The respondent would also nominate its arbitrator from the same list, and the two arbitrators appointed would also select the third arbitrator from the same 5-member list. This would have the result of giving the petitioner no real choice in choosing its nominee, as it is quite possible that the respondent would have picked its own favourites to the 5-member list. Therefore, the Court deemed it fit to change the appointment procedure to let parties nominate any person from the entire panel of 31 arbitrators, and similarly permit the nominee arbitrators as well to nominate the third arbitrator from this broader panel.24<\/sup><\/a><\/p>\n<\/li>\n

  3. \n

    The Court also noted that in any event, there was an additional safeguard of the arbitrators ultimately chosen having to disclose their interests as per Section 12 of the Act.25<\/sup><\/a><\/p>\n<\/li>\n<\/ol>\n

    Voestalpine<\/span>26<\/sup><\/a> therefore, is in a sense on a different footing from TRF<\/span>27<\/sup><\/a> and Perkins<\/span>28<\/sup><\/a> since in Voestalpine<\/span>29<\/sup><\/a> the broader list of 31 arbitrators (that was eventually provided to the petitioner) had retired employees of the Government including retired employees of the Indian Railways but no current employees or ex-employees of either of the parties.<\/p>\n

    Subsequently, in 2020, a three-Judge Bench of the Supreme Court in Central Organisation for Railway Electrification<\/span> v. ECI-SPIC-SMO-MCML (JV)<\/span>30<\/sup><\/a> (CORE<\/span>), varied from the approach taken in TRF<\/span>31<\/sup><\/a> and Perkins<\/span>32<\/sup><\/a>.<\/p>\n

    In this case, the arbitration clause stipulated that the appellant (CORE) would provide a list of 4 arbitrators to the respondent. Out of this list, the contractor (respondent) would suggest to the General Manager, Railways at least two names for its nominee. The General Manager would appoint at least one out of them as the contractor’s nominee and would simultaneously appoint the remaining two arbitrators from the panel or from outside the panel and then indicate the “Presiding Officer” from amongst the three arbitrators. On the aspect of whether the General Manager, Railways would be eligible to nominate an arbitrator, considering his own (potential) ineligibility, the Court held that this principle would not be applicable since there was an adequate counterbalancing in this case by letting the respondent select two arbitrators (out of 4 selected by the appellant) from which the appellant would pick one arbitrator.33<\/sup><\/a><\/p>\n

    However, this reasoning does not appear to be adequate because it is not clear what the role of an adequately counterbalanced appointment clause is in a situation where the General Manager himself is ineligible. The Court fails to analyse this issue from the perspective of a (potential) loss of authority of the nominating arbitrator and instead relies on TRF<\/span>34<\/sup><\/a> to state that if there is adequate counterbalancing the authority of the nominating entity of one party cannot be questioned.35<\/sup><\/a> Therefore, CORE<\/span>36<\/sup><\/a> conflates the two issues, one being on ineligibility to appoint an arbitrator when the appointing authority is itself ineligible to be an arbitrator, and two, whether the appointment is unilateral in nature i.e. if there is adequate counterbalancing.<\/p>\n

    While CORE<\/span>37<\/sup><\/a> cites Voestalpine<\/span>38<\/sup><\/a> for the holding that retired railway officers would not be ineligible from being appointed as arbitrators due to their technical expertise, it does not follow the direction in Voestalpine<\/span>39<\/sup><\/a> that the panel of arbitrators ought to be broad-based in order to give the other side adequate choice of selecting its nominee arbitrator. In fact, CORE<\/span>40<\/sup><\/a> is contrary to Voestalpine<\/span>41<\/sup><\/a> because in the latter the Court clearly expressed its opinion that it would amount to a lack of any real choice to the petitioner to select its arbitrator when such selection was to happen from a narrow panel of 5 arbitrators chosen by the respondent.<\/p>\n

    The judgment in CORE<\/span>42<\/sup><\/a> has received a lot of criticism for upending the established position of law, muddying the waters, and resulting in a situation where two three-Judge Bench decisions of the Supreme Court (the other one being TRF<\/span>43<\/sup><\/a>) have ruled differently on the same issue.<\/p>\n

    A 2021 judgment of the Supreme Court in a matter being heard by a three-Judge Bench i.e. in Union of India<\/span> v. Tantia Constructions Ltd.<\/span> (Tantia<\/span>)44<\/sup><\/a> expressed a prima facie disagreement with the judgment in CORE<\/span>45<\/sup><\/a>. The Supreme Court was of the opinion that once the appointing authority is disqualified from referring the matter to arbitration, it would not then follow that appointments made by the authority may still be valid depending upon the facts of the case. Accordingly, the three-Judge Bench of the Supreme Court in Tantia<\/span>46<\/sup><\/a> referred the matter to a larger Bench to look into the correctness of CORE<\/span>47<\/sup><\/a>.<\/p>\n

    In JSW Steel Ltd.<\/span> v. South Western Railway<\/span> (JSW<\/span>)48<\/sup><\/a> as well, a three-Judge Bench of the Supreme Court also expressed its disagreement with the view taken in CORE<\/span>49<\/sup><\/a>. In JSW<\/span>50<\/sup><\/a>, not only was the arbitrator appointed in accordance with CORE<\/span>51<\/sup><\/a>, but an award had also been passed. Accordingly, the Court directed the matter to be referred to a larger Bench and this matter is now tagged with CORE<\/span>52<\/sup><\/a>.<\/p>\n

    These matters were eventually heard in proceedings before a five-Judge Constitution Bench of the Supreme Court and arguments have concluded. The Court has reserved orders as on have been reserved on 30-8-2024.<\/p>\n

    Analysis of decisions post-CORE<\/span>: An incorrect differentiation of CORE<\/span><\/h4>\n

    Post the decision in CORE<\/span>53<\/sup><\/a>, a number of decisions of various High Courts have either differed from the approach in CORE<\/span>54<\/sup><\/a> and have distinguished it or have expressly not relied upon CORE<\/span>55<\/sup><\/a> because the same is being considered by a Constitution Bench of the Supreme Court and is pending adjudication.<\/p>\n

    In the Delhi High Court, the position on unilateral appointment of an arbitrator has been considered in several recent decisions i.e. in Margo Networks (P) Ltd.<\/span> v. Railtel Corpn. of India Ltd.<\/span>56<\/sup><\/a> (Margo Networks<\/span>), Taleda Square (P) Ltd.<\/span> v. Rail Land Development Authority<\/span>57<\/sup><\/a> (Taleda Square<\/span>) and the most recent decision being the judgment in Sri Ganesh Engg. Works<\/span> v. Northern Railway<\/span>58<\/sup><\/a> (Sri Ganesh<\/span>).<\/p>\n

    In all three judgments the facts are similar, and the arbitration clauses in question consist of a clause which (i<\/span>) firstly, entitles one party (the non-governmental entity) to select two arbitrators from the panel of five (or more) offered by the respondent (the governmental entity); (ii<\/span>) secondly, empowers the respondent to select one out of the two as one of the arbitrators; and (iii<\/span>) thirdly, allows the respondent to nominate the other two arbitrators.<\/p>\n

    In Margo Networks<\/span>59<\/sup><\/a>, when a dispute arose between the parties, the respondent directed the petitioner to act in strict conformity with the arbitration clause which provided for appointment of a 3-member Arbitral Tribunal in the following manner:<\/p>\n

    (i<\/span>) The Railway (respondent) would send a panel of more than 3 (three) names to the petitioner who would be asked to suggest at least two names out of the panel for appointment of its nominee.<\/p>\n

    (ii<\/span>) The Railway would appoint at least one out of them as the petitioner’s nominee.<\/p>\n

    (iii<\/span>) The Railway would also simultaneously appoint the balance number of arbitrators either from the panel or from outside the panel, duly indicating the presiding arbitrator from amongst the three arbitrators so appointed.<\/p>\n

    The respondent offered a panel of 10 persons to the petitioner, each of them being former employees of either the Railways or RailTel out of which the petitioner was to select at least two members for the selection of its nominee.<\/p>\n

    Following the principles laid down in Voestalpine<\/span>60<\/sup><\/a> on the requirement of having broad-based panels, the Court found that since all the members of the panel were ex-employees of the Railways\/RailTel, such a panel would be restrictive and manifestly not “broad-based” and therefore, the arbitration clause would not be valid.<\/p>\n

    However, on the aspect of the ruling in CORE<\/span>61<\/sup><\/a>, the Court in Margo Networks<\/span>62<\/sup><\/a> decided that CORE<\/span>63<\/sup><\/a> did not consider the following two fundamental issues:<\/p>\n

    (i<\/span>) When appointment of arbitrator(s) is to be made out of a panel prepared by one of the parties, whether the panel is required to be “broad-based” as per Voestalpine<\/span>64<\/sup><\/a>; and<\/p>\n

    (ii<\/span>) whether counterbalancing is achieved in a situation here where one of the parties has a right to choose an arbitrator from a panel whereas the remaining (2 out of 3) members of the Arbitral Tribunal are appointed by the other party?<\/p>\n

    While the first issue was indeed not considered by the ruling in CORE<\/span>65<\/sup><\/a>, it is not comprehensible how the Court in Margo Networks<\/span>66<\/sup><\/a> (and later in Taleda Square<\/span>67<\/sup><\/a> as well) decides that CORE<\/span>68<\/sup><\/a> did not consider counterbalancing.<\/p>\n

    In CORE<\/span>69<\/sup><\/a>, the factual situation and appointment procedure (as also described above), was quite similar to that of Margo Networks<\/span>70<\/sup><\/a> and in fact the judgment in CORE<\/span>71<\/sup><\/a> states:<\/p>\n

    37<\/span>. … the right of the General Manager in formation of the Arbitral Tribunal is counterbalanced by the respondent’s power to choose any two from out of the four names and the General Manager shall appoint at least one out of them as the contractor’s nominee.<\/span><\/span><\/span><\/span><\/p>\n

    Therefore, CORE<\/span>72<\/sup><\/a> clearly decides that the General Manager’s right in appointing two out of three members to the Arbitral Tribunal is adequately counterbalanced.<\/p>\n

    Similarly, in Taleda Square<\/span>73<\/sup><\/a> as well, on appointment procedure that is near identical to the procedure in Margo Networks<\/span>74<\/sup><\/a>, the Court held that such a clause did not meet the test of “counterbalancing” as:<\/p>\n

    (i<\/span>) the power to appoint 2 out of 3 arbitrators was with the respondent; and<\/p>\n

    (ii<\/span>) even the petitioner’s option to choose its nominee from a list of only five persons shows that the panel being offered by the respondent was not sufficiently broad-based.<\/p>\n

    The Court in Taleda Square<\/span>75<\/sup><\/a> also employed the same erroneous reasoning as in Margo Networks<\/span>76<\/sup><\/a> to differentiate from CORE<\/span>77<\/sup><\/a>, despite the fact that CORE<\/span>78<\/sup><\/a> did indeed decide on the counter-balancing issue with similar facts.<\/p>\n

    Similarly, in Sri Ganesh<\/span>79<\/sup><\/a> as well wherein the appointment procedure was near identical to both Margo Networks<\/span>80<\/sup><\/a> and Taleda Square<\/span>81<\/sup><\/a>, the Court placed reliance on these judgments as well as Voestalpine<\/span>82<\/sup><\/a> to hold that such clauses would compromise the independence and impartiality of the appointed Arbitral Tribunal.<\/p>\n

    While all the three judgments of Margo Networks<\/span>83<\/sup><\/a>, Taleda Square<\/span>84<\/sup><\/a> and Sri Ganesh<\/span>85<\/sup><\/a>, differentiate from CORE<\/span>86<\/sup><\/a>, it is evident that such differentiation is on flawed and erroneous grounds.<\/p>\n

    In all of these cases, the Delhi High Court has proceeded to appoint an independent Arbitral Tribunal, de hors the terms of the contract to adjudicate the dispute between the parties. Therefore, largely and generally, the Delhi High Court has not followed CORE<\/span>87<\/sup><\/a> despite its operation not having been stayed by the Supreme Court, and has instead preferred the approach of Perkins<\/span>88<\/sup><\/a> and Voestalpine<\/span>89<\/sup><\/a>. This is clearly an attempt by the Court to better balance the competing interests of party autonomy (in appointing an arbitrator of choice) and maintaining impartiality of the Arbitral Tribunal in the face of the judgment in CORE<\/span>90<\/sup><\/a>.<\/p>\n

    A similar approach has also been adopted by the Calcutta High Court. For instance, in the latest (2024) case of RKD Niraj JV<\/span> v. Union of India<\/span>91<\/sup><\/a>, in a Section 1192<\/sup><\/a> petition for appointment of an arbitrator, the High Court had the opportunity to consider whether the Arbitral Tribunal should be appointed as per Clause 64(3)(a<\/span>)(ii<\/span>) of the General Conditions of Contract (which provides for three names of Gazetted Railway Officers for constituting the Arbitral Tribunal).<\/p>\n

    The Court held against the respondent due to the unilateral nature of Clause 64(3)(a<\/span>)(ii<\/span>), and due to CORE<\/span>93<\/sup><\/a> being referred to a larger Bench of the Supreme Court. Therefore, the High Court here as well, proceeded de hors the contract, and appointed two former Judges of the High Court as two of the arbitrators, and a senior advocate as the presiding arbitrator.<\/p>\n

    On waiver under Section 12(5) — Whether participation in the arbitration would amount to waiver, and the “persona designata” understanding of unilateral appointment<\/h4>\n

    On a slightly different aspect under the larger umbrella of the law on unilateral appointment of arbitrators, an interesting issue arose on waiver under Section 12(5) of the Act. The proviso to this sub-section permits parties to waive the applicability of the sub-section by an express agreement in writing after disputes have arisen between the parties. Therefore, parties can choose to waive the conditions specified in the Seventh Schedule that would make an arbitrator ineligible by mutual consent after the dispute has arisen between the parties.<\/p>\n

    In McLeod Russel (India) Ltd.<\/span> v. Aditya Birla Finance Ltd.<\/span>94<\/sup><\/a> (McLeod Russel<\/span>), the Calcutta High Court was faced with the question of whether the participation by a party in an arbitration would amount to a waiver under Section 12(5) of the Act when the arbitration clause provided for a unilateral appointment of the arbitrator by only one of the parties.<\/p>\n

    On the facts of the case, the Court held that because of the petitioner’s extensive participation in the arbitration, which was not a one-off or a mindless entry into the arbitrator’s jurisdiction, the petitioners made a conscious and deliberate decision to stay on and live with the arbitration agreement that provided for such a unilateral appointment. The pleadings filed by the petitioner at various stages of the arbitration proceeding would amount to an “express agreement in writing” as contemplated in the proviso to Section 12(5) of the Act, and Section 12(5) was not fact neutral or context indifferent. Where a party had continuously, repeatedly and unequivocally accepted the arbitrator’s appointment, the same could not be wiped out or nullified by a mere application for termination of the arbitrator’s mandate.<\/p>\n

    The second issue was whether a unilateral appointment clause itself would be valid, and the Court differentiated Perkins<\/span>95<\/sup><\/a> on inter alia two important aspects:<\/p>\n

      \n
    1. \n

      The ratio in Perkins<\/span>96<\/sup><\/a> and TRF<\/span>97<\/sup><\/a> is that a person disqualified from being an arbitrator cannot delegate his position to another. However, in McLeod Russel<\/span>98<\/sup><\/a>, the arbitration clause provided for a sole arbitrator to be appointed by one of the parties directly, and there was no named\/designated arbitrator or “persona designata”. Therefore, “unilateral appointments” being impermissible in law must be read to mean a unilateral appointment made by a person who himself is disqualified to act as an arbitrator under the Seventh Schedule and not each and every unilateral appointment made by one of the parties to the arbitration.<\/p>\n<\/li>\n

    2. \n

      In Perkins<\/span>99<\/sup><\/a>, there was no question of waiver i.e. on facts, in Perkins<\/span>100<\/sup><\/a>, the issue of waiving the ineligibility of an arbitrator by an agreement in writing never arose.<\/p>\n<\/li>\n<\/ol>\n

      Therefore, in McLeod Russel<\/span>101<\/sup><\/a>, the Court distinguished a “persona designata” appointment and an appointment by the party itself, holding that only the former would fall within impermissible appointments because they were unilateral in nature. However, the Court does not explain how the same issue of ineligibility would not arise even in a situation where simply the party was appointing an arbitrator (instead of a “persona designata” making the appointment). Usually, in a clause which allows a party to appoint an arbitrator, it is an official\/officer\/director of the party who makes the appointment. It is unclear why the two situations would be different when the same issue of ineligibility could arise in both cases.<\/p>\n

      Ultimately, the Calcutta High Court held that the ineligibility of the arbitrator due to the unilateral appointment was regularised on account of the waiver by the petitioner.<\/p>\n

      The way forward in the law on unilateral appointments<\/h4>\n

      While the law on the correctness of the holding in CORE<\/span>102<\/sup><\/a> awaits clarity by the Supreme Court, it is important to consider the impracticality of having any sort of strict and defined test of what would amount to an adequate amount of “counterbalance” in any arbitration clause. On this issue, courts have considered whether both parties have an adequate amount of say in the appointment, and whether a selection from a pre-decided panel would amount to having enough choice in the selection of an arbitrator. Often it may also be the case that there is an imbalance in the bargaining power and ability to negotiate between both the parties, which often results in an imbalanced and unilateral appointment.<\/p>\n

      Even in a scenario where the respondent entity provides a large pool of arbitrators from which the petitioner may choose its nominees, it is possible that out of the large pool most may have expertise in a specific area or may be related in some manner to the respondent, which would once again leave the petitioner with no real choice and would not in fact counterbalance the situation. Therefore, it may be desirable for the Court to not lay down any overtly prescriptive standard or bright-line test to determine the appropriate amount of counterbalance in any arbitration clause and instead provide broad guidelines which would only supplement a fact-based inquiry that would be dependent upon the circumstances of the case and factual considerations of independence and impartiality.<\/p>\n

      Therefore, the principle of balancing of both parties’ ability to choose its arbitrator should be at the centre of any court’s decision.<\/p>\n

      Simultaneously, courts have carved an exception for retired ex-employees of the Government (which is often one of the parties) and held them as not being disqualified on the basis of their technical expertise and relevant domain-related experience that would not be possible for anyone from another field to possess. Therefore, while courts should take into account whether the arbitrator possesses such technical knowledge, the panel for selection should be adequately broad-based and varied so that parties have the choice to select from multiple arbitrators with different backgrounds, skill sets and experience.<\/p>\n

      Ultimately, courts should also consider the statutory safeguard encapsulated in the proviso to Section 12(5) of the Act allowing parties to waive the applicability of Section 12(5) and by extension the applicability of the Seventh Schedule by an express agreement in writing. The Act clearly favours party autonomy in this manner by giving primacy to the parties’ intentions, permitting waiver of ineligibility after disputes have arisen. Therefore, if an arbitrator were to be ineligible under Section 12(5), and parties were to waive such ineligibility, this would obviate the need for filing an application under Section 11 of the Act.<\/p>\n<\/div>\n\n

      \u2020Partner, Dispute Resolution at Trilegal.<\/span><\/strong><\/p>\n

      \u2020\u2020Associate, Trilegal.<\/span><\/strong><\/p>\n

      1.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      2.<\/a> Arbitration and Conciliation Act, 1996, S. 12(5).<\/a><\/p>\n

      3.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      4.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      5.<\/a> (2017) 8 SCC 377<\/a>.<\/p>\n

      6.<\/a> (2017) 8 SCC 377<\/a>.<\/p>\n

      7.<\/a> Arbitration and Conciliation Act, 1996, Sch. 7 Entry 1<\/a>.<\/p>\n

      8.<\/a> While the Seventh Schedule of the Act prescribes the various circumstances that would make an arbitrator ineligible, the Fifth Schedule<\/a> provides the grounds that give rise to justifiable doubts as to the independence or impartiality of the arbitrator.<\/p>\n

      9.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      10.<\/a> (2017) 8 SCC 377<\/a>.<\/p>\n

      11.<\/a> Perkins Eastman Architects DPC<\/span> v. HSCC (India) Ltd<\/span>., (2020) 20 SCC 760, 778-779<\/a>.<\/p>\n

      12.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      13.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      14.<\/a> (2017) 8 SCC 377<\/a>.<\/p>\n

      15.<\/a> (2017) 8 SCC 377<\/a>.<\/p>\n

      16.<\/a> TRF Ltd.<\/span> v. Energo Engg. Projects Ltd.<\/span>, (2017) 8 SCC 377<\/a>,<\/p>\n

      50.<\/span> … We are neither concerned with the disclosure nor the objectivity nor the impartiality nor any such other circumstance … but merely whether the Managing Director, after becoming ineligible by operation of law is he still eligible to nominate an arbitrator. (Mark as RI1)<\/p>\n

      17.<\/a> (2017) 8 SCC 377<\/a>.<\/p>\n

      18.<\/a> (2017) 8 SCC 377, para 54<\/a>.<\/p>\n

      19.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      20.<\/a> (2017) 4 SCC 665<\/a>.<\/p>\n

      21.<\/a> (2017) 4 SCC 665<\/a>.<\/p>\n

      22.<\/a> Arbitration and Conciliation Act, 1996, Sch. 7 <\/a>Entry 1: The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party.<\/p>\n

      23.<\/a> (2017) 4 SCC 665, para 25<\/a>.<\/p>\n

      24.<\/a> (2017) 4 SCC 665, para 27<\/a>.<\/p>\n

      25.<\/a> (2017) 4 SCC 665, para 26<\/a>.<\/p>\n

      26.<\/a> (2017) 4 SCC 665<\/a>.<\/p>\n

      27.<\/a> (2017) 8 SCC 377<\/a>.<\/p>\n

      28.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      29.<\/a> (2017) 4 SCC 665<\/a>.<\/p>\n

      30.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      31.<\/a> (2017) 8 SCC 377<\/a>.<\/p>\n

      32.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      33.<\/a> CORE<\/span>, (2020) 14 SCC 712, para 36<\/span><\/span><\/a>.<\/p>\n

      34.<\/a> (2017) 8 SCC 377<\/a>.<\/p>\n

      35.<\/a> TRF<\/span>, (2017) 8 SCC 377, para 50<\/span><\/a>.<\/p>\n

      36.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      37.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      38.<\/a> (2017) 4 SCC 665<\/a>.<\/p>\n

      39.<\/a> (2017) 4 SCC 665<\/a>.<\/p>\n

      40.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      41.<\/a> (2017) 4 SCC 665<\/a>.<\/p>\n

      42.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      43.<\/a> (2017) 8 SCC 377<\/a>.<\/p>\n

      44.<\/a> (2023) 12 SCC 330<\/a>.<\/p>\n

      45.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      46.<\/a> (2023) 12 SCC 330<\/a>.<\/p>\n

      47.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      48.<\/a> 2022 SCC OnLine SC 1973<\/a>.<\/p>\n

      49.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      50.<\/a> 2022 SCC OnLine SC 1973<\/a>.<\/p>\n

      51.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      52.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      53.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      54.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      55.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      56.<\/a> 2023 SCC OnLine Del 3906<\/a>.<\/p>\n

      57.<\/a> 2023 SCC OnLine Del 6321<\/a>.<\/p>\n

      58.<\/a> 2023 SCC OnLine Del 7574<\/a>.<\/p>\n

      59.<\/a> 2023 SCC OnLine Del 3906<\/a>.<\/p>\n

      60.<\/a> (2017) 4 SCC 665<\/a>.<\/p>\n

      61.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      62.<\/a> 2023 SCC OnLine Del 3906<\/a>.<\/p>\n

      63.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      64.<\/a> (2017) 4 SCC 665<\/a>.<\/p>\n

      65.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      66.<\/a> 2023 SCC OnLine Del 3906<\/a>.<\/p>\n

      67.<\/a> 2023 SCC OnLine Del 6321<\/a>.<\/p>\n

      68.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      69.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      70.<\/a> 2023 SCC OnLine Del 3906<\/a>.<\/p>\n

      71.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      72.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      73.<\/a> 2023 SCC OnLine Del 6321<\/a>.<\/p>\n

      74.<\/a> 2023 SCC OnLine Del 3906<\/a>.<\/p>\n

      75.<\/a> 2023 SCC OnLine Del 6321<\/a>.<\/p>\n

      76.<\/a> 2023 SCC OnLine Del 3906<\/a>.<\/p>\n

      77.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      78.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      79.<\/a> 2023 SCC OnLine Del 7574<\/a>.<\/p>\n

      80.<\/a> 2023 SCC OnLine Del 3906<\/a>.<\/p>\n

      81.<\/a> 2023 SCC OnLine Del 6321<\/a>.<\/p>\n

      82.<\/a> (2017) 4 SCC 665<\/a>.<\/p>\n

      83.<\/a> 2023 SCC OnLine Del 3906<\/a>.<\/p>\n

      84.<\/a> 2023 SCC OnLine Del 6321<\/a>.<\/p>\n

      85.<\/a> 2023 SCC OnLine Del 7574<\/a>.<\/p>\n

      86.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      87.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      88.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      89.<\/a> (2017) 4 SCC 665<\/a>.<\/p>\n

      90.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      91.<\/a> 2024 SCC OnLine Cal 4027<\/a>.<\/p>\n

      92.<\/a> Arbitration and Conciliation Act, 1996, S. 11.<\/a><\/p>\n

      93.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n

      94.<\/a> 2023 SCC OnLine Cal 330<\/a>.<\/p>\n

      95.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      96.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      97.<\/a> (2017) 8 SCC 377<\/a>.<\/p>\n

      98.<\/a> 2023 SCC OnLine Cal 330<\/a>.<\/p>\n

      99.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      100.<\/a> (2020) 20 SCC 760<\/a>.<\/p>\n

      101.<\/a> 2023 SCC OnLine Cal 330<\/a>.<\/p>\n

      102.<\/a> (2020) 14 SCC 712<\/a>.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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