Summary
The Court distinguished statutory arbitrator ineligibility under Section 12(5) and the Seventh Schedule from factual doubts under the Fifth Schedule. It upheld the challenged appointments: one unrelated arm’s-length legal opinion did not establish the advisory relationship alleged, and an earlier arbitral award was not prior involvement in the present dispute within Item 16. Fifth-Schedule challenges remained available after the award through Section 34.
Issues
- How Seventh-Schedule ineligibility differs procedurally from Fifth-Schedule doubts.
- Whether an unrelated legal opinion or earlier arbitral appointment established the asserted ineligibility.
- Whether the additional disclosure objections justified interference.
Provisions considered
- Sections 12(5), 13, 14(1)(a) and 14(2), Arbitration and Conciliation Act, 1996Seventh-Schedule ineligibility creates de jure inability that may be raised directly under Section 14(2); Fifth-Schedule doubts follow Section 13 and, after an unsuccessful challenge and award, Section 34. (¶ 11–13)
- Seventh Schedule, Items 1, 8, 15 and 16, Arbitration and Conciliation Act, 1996The reproduced categories were construed fairly in context, distinguishing a one-off unrelated opinion and previous service as arbitrator from disqualifying relationships or involvement. (¶¶ 12, 20–24)
Held
- Ineligibility goes to inherent authority and permits a direct Section 14(2) application without first using Section 13. Fifth-Schedule doubts require factual determination under Section 13; after rejection, the tribunal continues and the challenge may be pursued against its award. The Court did not decide the parties’ Fifth-Schedule grounds at this stage. (¶¶ 13, 17)
- The schedules require a broad common-sense, fair construction, without undue enlargement or restriction. Justifiable doubts are assessed from the standpoint of a reasonable informed third person considering whether extraneous factors may influence the decision. (¶ 15–20)
- Justice Lahoti’s single professional opinion to GAIL in an unrelated matter did not establish the business-advisory connection, regular advice or advice on this dispute required by the invoked items. (¶ 21–22)
- Item 16 concerns prior involvement in the very dispute in an advisory or other capacity rather than prior service as arbitrator in another reference on related issues. Such related references are separately addressed in the Fifth Schedule. Arbitral appointment is not itself a business relationship, nor is an award expert advice to a party. (¶ 23–24)
- A prior award alone did not establish a closed mind or ineligibility, and nothing showed a pronounced prejudgment here. The new time-availability disclosure objection was not entertained because it had not been raised earlier; delivery delay attributable to ICADR did not warrant removal. (¶ 25–30)
- Explanation 3 about specialised arbitration pools is a relevant fact in its own setting; it does not imply that repeat appointment elsewhere is prohibited. (¶ 31)
Result
Appeals dismissed; appointments upheld, with Fifth-Schedule challenges left for the prescribed post-award remedy.