Published on: 14 July 2023 at 01:10 IST
Court: Supreme Court
Citation: Bharat Broadband Network Ltd. v. United Telecoms Ltd. (2019)
Honourable Supreme Court of India has held that Section 12(5) of the Arbitration and Conciliation Act, 1996 casts a Default Inability on a person for being appointed as an Arbitrator if he had a relationship with the parties or the counsel or the subject-matter of the dispute falls. However, it is that the only way in which this ineligibility is when parties waive the applicability of this sub-section by an “express agreement in writing”.
15. Section 12(5), on the other hand, is a new provision which relates to the de jure inability of an arbitrator to act as such. Under this provision, any prior agreement to the contrary is wiped out by the non obstante clause in Section 12(5) the moment any person whose relationship with the parties or the counsel or the subject-matter of the dispute falls under the Seventh Schedule. The sub-section then declares that such person shall be “ineligible” to be appointed as arbitrator.
The only way in which this ineligibility can be removed is by the proviso, which again is a special provision which states that parties may, subsequent to disputes having arisen between them, waive the applicability of Section 12(5) by an express agreement in writing. What is clear, therefore, is that where, under any agreement between the parties, a person falls within any of the categories set out in the Seventh Schedule, he is, as a matter of law, ineligible to be appointed as an arbitrator.
The only way in which this ineligibility can be removed, again, in law, is that parties may after disputes have arisen between them, waive the applicability of this sub-section by an “express agreement in writing”. Obviously, the “express agreement in writing” has reference to a person who is interdicted by the Seventh Schedule, but who is stated by parties (after the disputes have arisen between them) to be a person in whom they have faith notwithstanding the fact that such person is interdicted by the Seventh Schedule.
Drafted By Abhijit Mishra
