Latest News
Back
Document:
Whether an arbitrator appointed by a person who is not eligible to be an arbitrator is valid? the Supreme court to decide
A bench consisting of Justice RF Nariman, Justice Navin Sinha, and Justice KM Joseph referred to the question of Whether an arbitrator appointed by a person who is not eligible to be an arbitrator is valid to the larger bench.
In the Case Bharat Broadband Network ltd V United Telecom, 2019, the apex court had held that, a person appointed as an arbitrator by a person whom himself is disqualified from being an arbitrator under Sec. 12(5) of the Act, is void. While this judgment was overruled by the divisional bench in the Central Organization for Railway Electrification V. ECI-SPIC-SMO-MCML case stating that the appointment of the arbitrator made by a person who is ineligible to be an arbitrator can be valid depending on the facts. But on 11th January 2021, the three-bench judge had a contradicting opinion and referred the question to the higher bench.
The judges in the present case held that after having observed the Central organization for Railway Electrification's case, they prima facie disagree with the fact that an authority who is not eligible to be an arbitrator under the act can make an appointment for an arbitrator, as the authority itself will be under question. The court noted that sec. 12(5) of the arbitration and conciliation Act, provides the party’s right to the applicability of this sub-section by an express contract. While dealing with the present the bench appreciated the judgment in TRF Limited Perkins Eastman Architects DPC V. HSCC, where the MD of the company had an option to be an arbitrator or chose an arbitrator of his choice. The court had held that if the MD is incompetent to be an arbitrator the incompetency shall also extend to his discretion of choosing an arbitrator. Considering few other judgments the bench was cautious enough to not take any stand regarding the question at hand but referred the same to a larger bench.
Document:
