Summary
The award of a named arbitrator who had also acted as counsel for a party in another case was set aside. His known professional connection, failure to disclose it and continuation despite objections supplied a reasonable basis to doubt his impartiality. The appellants could not deny the arbitration agreement after themselves seeking an independent arbitrator under section 11. The claim and counterclaim remained open for lawful arbitration.
Issues
- Whether the appellants could dispute the arbitration agreement after seeking appointment under it.
- Whether the arbitrator’s undisclosed professional connection and continuation despite objections invalidated the award.
Provisions considered
- Section 12(1), before the amendment of 23 October 2015, Arbitration and Conciliation Act, 1996Required written disclosure of circumstances likely to create justifiable doubts about independence or impartiality; the known counsel relationship called for disclosure and refraining from entertaining this claim. (¶ 8)
Held
- The appellants’ own section 11 application seeking an independent arbitrator estopped them from denying the arbitration agreement at this stage. (¶ 6)
- The objection could not be rejected merely because the initial notice came through the appellants’ father: he was not a stranger, the appellants had not disowned it, and one appellant had independently sought stoppage of proceedings. (¶ 7–8)
- The arbitrator’s professional relationship with a party was established on the record and known when the claim was lodged. Reasonable apprehension about fairness justified recusal on these facts without determining actual bias or the claim’s merits. (¶ 7–10)
Result
Appeal allowed without costs. High Court judgment set aside and District Judge’s order setting aside the award restored. Parties free to pursue arbitration according to law; all claim and counterclaim merits left open.