Arbitrator Appointed Earlier By One Of The Parties Not Barred To Decide Subsequent Dispute: Karnataka High Court
The Karnataka High Court has observed that no person is barred from being appointed as an Arbitrator subsequently if he has been appointed as an arbitrator on two or more occasions by one of the parties previously.
The Bench of Justice R Devdas observed, “It is therefore clear that as an Arbitrator, if a person has decided a dispute earlier or has been appointed as an Arbitrator on two or more occasions by one of the parties or an affiliate of one of the parties, that by itself is not a bar for his appointment as an Arbitrator subsequently, if it is possible for such Arbitrator to show that he was independent and impartial on the earlier occasion. Therefore, it is too far fetched to contend that a person serving as an Arbitrator in a dispute involving the petitioner and affiliate of the respondent herein is barred from being appointed as an Arbitrator in the present case.”
Advocate Pradeep Nayak appeared for the Petitioner while Senior Advocate CK Nandakumar appeared for the Respondent.
A miscellaneous petition was filed under Section 11(5) of the Arbitration Act, 1996 praying to appoint Justice MS Sanklecha, Retired Judge, Bombay High Court as a Sole Arbitrator.
The Respondent submitted that any other Judge of any High Court may be appointed as a Sole Arbitrator and not Justice Sanklecha as he was barred from being appointed as an arbitrator in terms of Entry 24 of the Fifth Schedule of the Act.
The main issue was whether an Arbitrator who was considering another dispute between the same or one of the parties was barred from trying a dispute in the light of Entry 24 of the Fifth Schedule of the Act.
The Court relied on the landmark judgments of the Apex Court in HRD Corporation v. GAIL (India) Limited, (2018) and Panipat Jalandar NH-1 Tollway Private Limited Vs. NHAI (2022).
The Court said that if the relationship of the Arbitrator with the parties or Counsel or the subject matter of the dispute falls under any of the categories specified in the Seventh Schedule of the Act, such person shall be ineligible to be appointed as an Arbitrator, in terms of sub-section (5) of Section 12. It is not the case of the respondent that the person sought to be appointed as Arbitrator incurs any of the disqualification under the Seventh Schedule, it noted.
Accordingly, the Court allowed the petition and appointed Justice MS Sanklecha as the Sole Arbitrator.
Cause Title: Shyamal Mukherjee v. Price Water House Coopers Services LLP
Appearances:
Petitioner: Advocate Pradeep Nayak
Respondent: Senior Advocate CK Nandakumar, Advocates Anandi Kamani and Kamal Shankar