Summary
In an arbitration governed by the pre-2015 Act, the Supreme Court rejected an institution’s objection to the State’s nominee merely because he had retired from State service over ten years earlier. It also held that substitution must follow the agreed appointment procedure. The High Court order was set aside; by mutual consent, the existing panel’s mandate was terminated and Justice S.S. Nijjar (Retd.) appointed sole arbitrator to continue on the existing record.
Issues
- Whether substitution had to follow the agreed procedure and the institution could prematurely nominate for the State.
- Whether former employment alone justified excluding the State’s nominee.
- What constitution of the tribunal followed from the parties’ consent.
Provisions considered
- Section 15(2), Arbitration and Conciliation Act, 1996Substitution must follow the rules applicable to the original appointment, including the parties’ agreed nomination procedure. (¶¶ 3.1, 3.2, 3.3, 3.4, 3.5)
- Fifth and Seventh Schedules, Entry 1, discussed by comparison, Arbitration and Conciliation Act, 1996Although the pre-amended Act governed, the Court also distinguished current employment and other past business relationships from former employment when discussing the later entry. (¶¶ 3.9, 3.10, 3.11)
Held
- The agreement gave each party a nominee. The institution could not usurp the State’s appointment role before expiry of the thirty days requested for substitution; its appointment was unjustified on these facts. (¶¶ 3.1, 3.2, 3.3, 3.4, 3.5)
- Former employment did not itself disqualify an arbitrator under the applicable pre-amendment regime. The nominee’s retirement over ten years earlier and the absence of substantiated doubts defeated the bald bias objection. (¶¶ 3.6, 3.7, 3.8, 3.9, 3.10, 3.11)
- The parties agreed to a sole arbitrator superseding the three-member clause. Justice S.S. Nijjar (Retd.) was appointed, the existing panel’s mandate terminated, and the sole arbitrator directed to continue with the material already received on record. (¶ 4)
Result
High Court order set aside; appeal disposed of by consent appointment of Justice S.S. Nijjar (Retd.) as sole arbitrator, continuing on the existing record; three-member tribunal mandate terminated.