Section 12 of the Arbitration Act [Challenging the appointment of an Arbitrator]
A person who is being approached in relation to the appointment as an arbitrator, it is mandatory on such person that she shall inform in writing about circumstances like
Whether there was a previous relationship or a present relationship in connection to the matter of dispute which may render a belief or possibility of impartiality by the Arbitrator.
Any information that would or might affect the proceedings of arbitration, may lead to its delay.
Whether there are grounds for the belief that the arbitrator may act impartially has to be decided by considering the provisions mentioned in the Fifth Schedule of the Arbitration Act.
And such information shall be disclosed in the way provided in the Sixth Schedule.
If the Arbitrator witnesses any such grounds after the proceedings have started, the arbitrator may still, in writing, at any stage of the arbitration inform about the presence of any such ground unless in a circumstance when the parties have already been informed.
The appointment of an Arbitrator may be challenged only in the following situations:
- When there is enough evidence to justify the doubts relating to impartiality and independence of the arbitrator.
- In circumstances when the arbitrator does not have the required qualifications to carry on the arbitration proceedings that were agreed upon by the parties.
The appointment of the arbitrator can be challenged only on grounds that are discovered after his appointment and not on grounds that were already known to the parties.
If a person has a past or a present relationship with the parties or in any connection with the subject matter of the dispute or under any of the circumstances mentioned in the seventh schedule of the Arbitration Act shall not be eligible to act as an arbitrator in that particular dispute in any case.
Section 12 – An essential provision
The most important and essential characteristic of an Arbitrator is that he must be independent and free from any sort of business. If any such circumstances exist which may give the impression that there can be biases on the part of the Arbitrator the same shall be intimated to the parties.
Effect of the 2015 Amendment
The 2015 Amendment act has introduced two important schedules that affect the provisions of section 12 –
- The Fifth Schedule provides that if the arbitrator knows that he might not be able to give enough time to the arbitral proceedings the same shall be informed to the parties. The failure to provide such information may lead to the termination of the appointment.
- The Seventh Schedule that lay down the grounds that if there are grounds to believe that the arbitrator may not be impartial or independent, he shall not be eligible to be an appointment of the arbitrator.