VidhiSangh

Supreme Court of India · 09/09/2021

JAIPUR ZILA DUGDH UTPADAK SAHKARI SANGH LIMITED & ORS. versus M/S AJAY SALES & SUPPLIERS

[2021] 7 S.C.R. 768 · 2021 INSC 465

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Summary

The Court upheld appointment of an independent arbitrator in place of the cooperative society’s chairman named in its distributorship agreements. The chairman’s management relationship made him ineligible under Section 12(5) and the Seventh Schedule despite the earlier agreements. Prior participation before him did not constitute the required express written post-dispute waiver. The cooperative-statute objection did not bar the agreed arbitration in these circumstances. All special leave petitions were dismissed.

Issues

  1. Whether the society’s elected chairman could continue as contractual arbitrator despite Section 12(5) ineligibility.
  2. Whether the earlier agreement, participation in proceedings or cooperative-societies legislation prevented appointment of an independent arbitrator.

Provisions considered

Held

Result

All special leave petitions dismissed; High Court appointments of independent arbitrators upheld.

Judgment PDF: Supreme Court of India, [2021] 7 S.C.R. 768.