INDIA Law and Practice Contributed by: Amit Mishra and Mitakshara Goyal, Svarniti Law Offices
4.4 Challenge and Removal of Arbitrators The provisions governing the challenge and removal of arbitrators are set out in Sections 12 to 15 of the ACA. The main grounds for challenging or removing an arbitrator are a lack of independence or impartial - ity, or the absence of qualifications as agreed upon by the parties. An arbitrator can be challenged if there are circum - stances that raise justifiable doubts about their impar - tiality or independence, or if they do not meet the qualifications specified by the parties. Any party may challenge an arbitrator, but if a party has participated in the appointment, it can only challenge for reasons discovered after the appointment. Parties are free to decide on a procedure for challenging arbitrators; if they do not, a default procedure applies. Under this procedure, a challenge must be made within 15 days of learning about the tribunal’s constitution or of any circumstances that could be grounds for challenge. If the challenge is unsuccessful, the arbitral tribunal will proceed with the arbitration and issue an award, which can later be contested by the aggrieved party. An arbitrator’s mandate will also end if they are unable to perform their duties, fail to act without undue delay or withdraw from office, or if both parties agree to terminate their mandate. If there is a dispute about whether these conditions have been met, a party may apply to the court to resolve the issue. 4.5 Arbitrator Requirements Under the governing law, strict requirements are imposed to ensure the independence and impartial - ity of arbitrators in India. In Central Organisation for Railway Electrification v ECI-SPIC-SMO-MCML (JV) , the apex court held that an impartial and independ - ent arbitrator is necessary for any arbitration to be just and fair, and that the restrictions provided under Section 12 of the ACA must be followed. When a person is approached for possible appoint - ment as an arbitrator, they are required to make a written disclosure of any circumstances that could give rise to justifiable doubts about their independ - ence or impartiality, such as past or present relation - ships or interests in any party or the subject matter of the dispute. This disclosure obligation also extends
restrictions designed to uphold the independence and impartiality of the arbitral tribunal. Notably, it is prohibited for any one party to unilaterally appoint an arbitrator, as this would violate the principles of equity and justice, as held by the Supreme Court in Central Organisation for Railway Electrification v ECI-SPIC- SMO-MCML (JV) (2024). Following the 2015 amendments to the ACA, its fifth schedule specifies a range of relationships largely modelled on the IBA Guidelines’ Red List that dis - qualify individuals from serving as arbitrators if they have certain connections with the parties, counsel or the subject matter of the dispute – for example, if the arbitrator is a manager, director or part of the manage - ment, or has a similar controlling influence in one of the parties. 4.2 Default Procedures If the parties’ agreed method for appointing arbitra - tors breaks down, the responsibility for making such appointments shifts to the courts. In international com - mercial arbitration, this role is handled by the Supreme Court, while the High Courts oversee appointments in domestic cases. A similar approach is reflected in the 2024 Amendment Bill, where Section 11 empowers recognised arbitral institutions to appoint arbitrators. The High Court will only step in in regions lacking such institutions, main - taining a panel of arbitrators for this purpose. 4.3 Court Intervention Courts generally refrain from interfering in the selec - tion of arbitrators beyond the procedures outlined in 4.2 Default Procedures . However, they retain the authority to refuse the appointment of an arbitrator who has been unilaterally appointed by only one party, as such appointments are contrary to the principles of fairness and impartiality. This was held by the apex court in Central Organisation for Railway Electrifica - tion v ECI-SPIC-SMO-MCML (JV) . However, in Bhadra International India v Airports Authority of India , the Delhi High Court upheld an arbitral award passed by a unilaterally appointed arbitrator without altering set - tled law on the illegality of unilateral appointments, citing the parties’ written waiver under Section 12 (5) of the Arbitration Act.
329 CHAMBERS.COM
Powered by FlippingBook