{"id":349344,"date":"2025-06-02T13:00:17","date_gmt":"2025-06-02T07:30:17","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=349344"},"modified":"2025-06-05T09:26:05","modified_gmt":"2025-06-05T03:56:05","slug":"himachal-pradesh-hc-appoints-new-arbitrator-violation-section-125-of-arbitration-act","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/06\/02\/himachal-pradesh-hc-appoints-new-arbitrator-violation-section-125-of-arbitration-act\/","title":{"rendered":"Himachal Pradesh HC intervenes in dispute between State and OASYS Cybernetics; Appoints arbitrator on violation of S. 12(5) of A&C Act"},"content":{"rendered":"
\n

Himachal Pradesh High Court:<\/span> In a writ petition filed by the petitioner against the unilateral appointment of Director, Department of Digital Technologies and Governance, Himachal Pradesh (\u2018Director of DTG\u2019), as the sole arbitrator by the State, the Division Bench of Tarlok Singh Chauhan*<\/span> and Sushil Kukreja, JJ., allowed the petition holding that the statutory bar under Section 12(5)<\/a> of the Arbitration and Conciliation Act, 1996<\/a> (\u2018the Act\u2019) would squarely be applicable as the Director of DTG could not be held to be an independent and impartial arbitrator because he could be a consultant or an advisor of the State.<\/p>\n

Background<\/h3>\n

The petitioner filed the present petition against the unilateral appointment of the arbitrator at the instance of the State without consulting the petitioner and secondly to the appointment of the Director of DTG, contrary to Section 12 (5) read with Schedule 7 of the Act.<\/p>\n

Analysis<\/h3>\n

The Court noted that Clause 27 of the agreement between the parties indicated that the State had no authority to unilaterally appoint the arbitrator. The State overlooked the provisions of the Act while appointing the Director of DTG as the sole arbitrator.<\/p>\n

The Court also noted that Section 12 (5) read with Schedule 7 of the Act indicated that notwithstanding any prior agreement to the contrary, any person whose relationship with the parties or counsel or the subject matter of the disputes, falls under any of the categories specified in Schedule 7 shall be ineligible to be appointed as or to act as an arbitrator. Further, Clause 1 of Schedule 7 indicated that if the arbitrator is an employee, consultant, advisor, or has any either present or past business relationship with a party, it would act as an embargo. The embargo placed under Section 12(5) would continue to operate where the arbitrator is an employee, consultant, advisor or has any other past or present business relationship with the parties and this relationship would act as an obstacle or hindrance for such person to act as an arbitrator or continue as an arbitrator.<\/p>\n

The Court remarked that the hallmark of arbitration proceedings is that the arbitrator is required to rise above the partisan interest. The adjudication by an arbitrator should be such that neither of the parties would get even an iota of doubt concerning the impartiality of the arbitrator. To rule out any such remote doubt arising in the minds of the parties, Section 12(5) has been inserted by the Parliament foreseeing such contingencies. It has been prescribed under Schedule 7 that such a relationship, which can be construed as raising a remote doubt about the impartiality of the arbitrator should act as an embargo for the arbitrator to continue if already appointed or act as a bar for being appointed as arbitrator. If such an arbitrator were to fall within the four corners of the definition specified in Clause 1 to 14 of Schedule 7, the embargo under Section 12(5) would necessarily surface and in such circumstances, the arbitrator will have to withdraw to allow for appointment of another arbitrator. In this regard, the Court relied upon Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd. v. Ajay Sales & Suppliers<\/span>, (2021) 17 SCC 248<\/a>.<\/p>\n

Thus, the Court held that the statutory bar under Section 12(5) would squarely be applicable as the Director of DTG could not be held to be an independent and impartial arbitrator because he could be a consultant or an advisor of the respondents. The Court also held that the pleadings and other material that had come on record shall remain as it is even while appointing the new arbitrator, save and except, in case the parties want to place any additional material on record.<\/p>\n

Accordingly, at the joint request of the parties, the Court appointed Mr. Deepak Kaushal, Senior Advocate, as the Arbitrator. The Court also directed the Director of DTG to hand over the records of the proceedings through the respondents to the new Arbitrator.<\/p>\n

[OASYS Cybernetics Pvt. Ltd. v. State of H.P., 2025 SCC OnLine HP 1812<\/a>, decided on 19-05-2025<\/span>]<\/p>\n

*Judgment authored by: Justice Tarlok Singh Chauhan<\/span><\/strong><\/p>\n

\n

Advocates who appeared in this case :<\/p>\n

For the petitioner:<\/span> Senior Advocate Sanjeev Bhushan and Rajesh Kumar<\/p>\n

For the respondent:<\/span> Advocate General Anup Rattan, Ramakant Sharma, Navlesh Verma, Sharmila Patial, Additional Advocate General Sushant Keprate, and Deputy Advocate General Raj Negi<\/p>\n

Buy Arbitration and Conciliation Act, 1996 \u00a0 HERE<\/a><\/h3>\n

\"arbitration<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The adjudication by an arbitrator should be such that neither of the parties would get even an iota of doubt with regard to impartiality of the arbitrator.<\/p>\n","protected":false},"author":67011,"featured_media":318873,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[82839,2929,82843,82844,71105,71104,82840,82842,82841],"class_list":["post-349344","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-appointment-of-new-arbitrator","tag-Himachal_Pradesh_High_Court","tag-impartial-arbitrator","tag-independent-arbitrator","tag-justice-sushil-kukreja","tag-justice-tarlok-singh-chauhan","tag-oasys-cybernetics","tag-schedule-7-of-arbitration-act","tag-section-125-of-arbitration-act"],"yoast_head":"\nSection 12 of Arbitration Act: Himachal Pradesh HC Court Ruling<\/title>\n<meta name=\"description\" content=\"Himachal Pradesh HC appoints new arbitrator for dispute between State & OASYS Cybernetics due to violation of Section 12(5) of Arbitration Act\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2025\/06\/02\/himachal-pradesh-hc-appoints-new-arbitrator-violation-section-125-of-arbitration-act\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Himachal Pradesh HC intervenes in dispute between State and OASYS Cybernetics; 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Narayana Swamy CJ., while exercising its powers under Section 11(6) of the Arbitration and Conciliation Act, 1996, appointed an Arbitrator and further allowed to either determine its own procedure for settling the dispute or run itself as per Section 23 and Section 29A of the\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":298894,"url":"https:\/\/www.scconline.com\/blog\/post\/2023\/08\/08\/himachal-pradesh-hc-consent-by-parties-can-be-expressed-or-implied-for-extending-arbitral-period\/","url_meta":{"origin":349344,"position":1},"title":"Consent for extending arbitral period under Section 29A(3) of 2015 Amendment Act doesn\u2019t need to be express or in writing: Himachal Pradesh HC","author":"Editor","date":"August 8, 2023","format":false,"excerpt":"\u201cThe consensus of the parties in proceeding with the arbitration case beyond twelve months without raising any objection to the continuation of proceeding does amount to consent. On the basis of such consent, the arbitral award if passed after six months would be a valid award.\u201d","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"himachal pradesh high court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/05\/himachal-pradesh-high-court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/05\/himachal-pradesh-high-court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/05\/himachal-pradesh-high-court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/05\/himachal-pradesh-high-court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":241662,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/01\/04\/hp-hc-appointment-of-arbitrator-an-arbitral-issue-which-can-be-adjudicated-by-a-retired-judge-of-the-high-court-must-not-be-awaited-for-the-want-of-technical-expertise\/","url_meta":{"origin":349344,"position":2},"title":"HP HC | [Appointment of Arbitrator] An arbitral issue which can be adjudicated by a retired judge of the High Court, must not be awaited for the want of technical expertise","author":"Editor","date":"January 4, 2021","format":false,"excerpt":"Himachal Pradesh High Court: L. Narayana Swamy, CJ., while allowing the present petition under Section 11 of the Arbitration and Conciliation Act, 1996, appointed Arun Kumar Goel, Former Judge of Himachal Pradesh High Court, as a sole arbitrator in the instant matter. Rajesh K. Sharma, Assistant Solicitor General of India,\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":196111,"url":"https:\/\/www.scconline.com\/blog\/post\/2018\/05\/18\/appointment-of-superintending-engineer-as-an-arbitrator-untenable-in-light-of-s-125-of-arbitration-and-conciliation-act\/","url_meta":{"origin":349344,"position":3},"title":"Appointment of Superintending Engineer as an arbitrator untenable in light of Section 12(5) of Arbitration and Conciliation Act","author":"Saba","date":"May 18, 2018","format":false,"excerpt":"Himachal Pradesh High Court: A petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 was allowed by a Single Judge Bench comprising of Vivek Singh Thakur, J. The petition was filed for appointment of an arbitrator to adjudicate upon the claim of the petitioner against the respondents\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":271679,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/08\/16\/appointment-of-2-judges-at-himachal-pradesh-high-court\/","url_meta":{"origin":349344,"position":4},"title":"Appointment of 2 Judges at Himachal Pradesh High Court","author":"Bhumika Indulia","date":"August 16, 2022","format":false,"excerpt":"The President appoints Sushil Kukreja and Virender Singh, to be the Judges of the Himachal Pradesh High Court, in that order of seniority, with effect from the date they assume charge of their respective offices.","rel":"","context":"In "Appointments & Transfers"","block_context":{"text":"Appointments & Transfers","link":"https:\/\/www.scconline.com\/blog\/post\/category\/news\/appointments\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/07\/himachal_pradesh_high_court.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/07\/himachal_pradesh_high_court.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/07\/himachal_pradesh_high_court.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/07\/himachal_pradesh_high_court.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/07\/himachal_pradesh_high_court.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":349624,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/06\/04\/himachal-pradesh-hc-refuses-tax-exemption-under-s-14-hp-motor-vehicles-taxation-act-for-auctioned-vehicles\/","url_meta":{"origin":349344,"position":5},"title":"\u201cNo equity in taxation law\u201d: Himachal Pradesh HC refuses tax exemption under S. 14 HP Motor Vehicles Taxation Act to man who bought auctioned vehicles","author":"Editor","date":"June 4, 2025","format":false,"excerpt":"\u201cIt is more than settled that there is no equity in taxation law and equity would only come into play in case there is no law operating in the field. For it is well settled that whenever conflict is between the law and equity, law would prevail.\u201d","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Himachal Pradesh High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/Himachal-Pradesh-High-Court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/Himachal-Pradesh-High-Court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/Himachal-Pradesh-High-Court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/Himachal-Pradesh-High-Court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/349344","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/67011"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=349344"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/349344\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/318873"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=349344"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=349344"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=349344"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}