An arbitrator can be appointed either by the parties or by court. The only requirement is that arbitral tribunal shall be consisted of odd number of arbitrators. This means that there can be a sole arbitrator or three arbitrators in an arbitrator tribunal. For appointing an arbitrator through court’s assistance, parties can approach court under section 11 of The Arbitration and Conciliation Act, 1996. Under this section two options are available to the parties to the dispute, either to appoint an arbitrator through a prescribed procedure or to take the assistance of court for appointment of an arbitrator. Also, in some case parties can mutually decide to appoint even numbers i.e. two arbitrators but in that case they cannot appeal against the award given by the arbitral tribunal. The Arbitration and Conciliation Act also provides with the provison related to qualifications of the arbitrators which are to be kept in mind by the courts or parties, as the case maybe, while appointment of an arbitrator.
Also parties can challenge the appointment of an arbitrator under section 12 and 13 of The Arbitration and Conciliation Act, 1996. These sections states the ground on which the appointment of arbitrator can be challenged in the court. Section 12 says that arbitrator is bound to inform about the grounds ,if any, to the party which can affect his impartiality and independence in the matter and it shall be done as soon as possible or when the parties approach the arbitrator for his appointment. In case the arbitrator fails to do so, then his appointment can be challenged by either of the parties. Before the amendment in 2015 section 12 did not provided the grounds on which the appointment of an arbitrator can be challenged in detail. Post the amendment 2015 section 12 defined the grounds which can affect impartiality or independence .the provision says that any relation of the arbitrator so appointed to the subject matter of the dispute can have an impact on impartiality and independence of an arbitrator, this relation can be past or present and it can be financial, business or professional. Another ground provided in this section is when the arbitrator does not posses the qualification required in the agreement by the parties.
As far as section 13 of The Arbitration and Conciliation Act, 1996 is concerned, it talks about the procedure to be followed while challenging the appointment of an arbitrator. First clause of the section says that parties are given liberty to choose the process of appointment of an arbitrator and second clause states that if the parties decides to challenge the appointment of an arbitrator then they shall do so within fifteen days of becoming aware of the grounds which can affect the impartiality or independence of an arbitrator in the dispute. Further this section provides that the arbitrator shall continue to decide the dispute as long as parties did not challenge his appointment or if the parties have challenged his appointed then their challenge has not been successful. Also in case where parties challenged the appointment of an arbitrator and they were successful which means the arbitrator has been removed from deciding the award and in case the arbitrator has already decided the award before the challenge to his appointment by the parties , then parties can proceed to get that award set aside.