9911796707
TMI Blog2024 (11) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 of the Constitution. As per Dr. Dhananjaya Y Chandrachud, CJI and Pamidighantam Sri Narasimha:- HELD THAT:- Following was held: a. The principle of equal treatment of parties applies at all stages of arbitration proceedings, including the stage of appointment of arbitrators; b. The Arbitration Act does not prohibit PSUs from empanelling potential arbitrators. However, an arbitration clause cannot mandate the other party to select its arbitrator from the panel curated by PSUs; c. A clause that allows one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts as to the independence and impartiality of the arbitrator. Further, such a unilateral clause is exclusive and hinders equal participation of the other party in the appointment process of arbitrators; d. In the appointment of a three-member panel, mandating the other party to select its arbitrator from a curated panel of potential arbitrators is against the principle of equal treatment of parties. In this situation, there is no effective counterbalance because parties do not participate equally in the process of appointing arbitrators. The process of appointing arbitrators in CORE [ 2019 (12) TMI 841 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration agreement is an essential feature of arbitration. It commences with choosing the members of the arbitral tribunal, extends to the procedure that would apply for its conduct, and concludes with the method by which an award could be challenged before a court. It is thus a brooding and guiding spirit of arbitration. Party autonomy is sufficiently incorporated in the Arbitration Act, along with a restraint on judicial intervention. III. The moment parties choose arbitration over ordinary civil proceedings for dispute resolution, their duty to establish an independent and impartial tribunal arises. The substitution of arbitration in place of civil courts as an exception under Section 28 of the Contract Act is only for a forum and not for contracting out of the most essential feature of a dispute resolution, i.e., independence and impartiality must exist in every forum. This essential feature is the inviolable public policy consideration under Section 23 of the Contract Act from which the parties cannot opt out. Arbitration agreements which are not compliant of this public policy consideration are void under Section 23 of the Contract Act. Thus, there is a statutory incorporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a clause enables establishment of an independent and impartial tribunal. - DR DHANANJAYA Y CHANDRACHUD, CJI AND PAMIDIGHANTAM SRI NARASIMHA For the Appellant : Mr. Tushar Mehta, Solicitor General, Mr. K.M. Nataraj, A.S.G., Mr. Arvind Kamath, A.S.G., Mr. Shashank Garg, Adv., Mr. Kanu Agrawal, Adv., Mr. Aman Mehta, Adv., Mr. Raman Yadav, Adv., Ms. Aastha Singh, Adv., Ms. Mili Bqaxi, Adv., Ms. Nishtha Jain, Adv., Ms. Jayashree Parihar, Adv., Mr. Raghav Bhatia, Adv., Mr. Arjun Sharma, Adv., Ms. Aradhya Chaturvedi, Adv., Mr. Diwakar Sharma, Adv., Mr. Kumar Vinayakam Gupta, Adv., Mr. Amrish Kumar, AOR, Mr. Guru Krishnakumar, Sr. Adv., Mr. Balaji Srinivasan, AOR, Mr. Vishwaditya Sharma, Adv., Mr. Ashwin K, Adv., Mr. Vishesh Goel, Adv., Ms. Harsha Tripathi, Adv., Mr. Aditya Nath, Adv., Mr. Shreyas Ranjan, Adv., Mr. S. Ravi Shankar, AOR, Mrs. Yamunah Nachiar, Adv., Ms. Ruhini Dey, Adv., Ms. Meghna Mukherjee, Adv., Ms. Priyanka, Adv., Mr. Sanjeev Kumar Kapoor, Adv., Mrs. Vanita Bhargava, Adv., Mr. Madhav Khosla, Adv., Mr. Rohit Ghosh, Adv., M/S. Khaitan Co., AOR, Mr. R. Anand Padmanabhan, Sr. Adv., Ms. Ruchi Arya, Adv., Mr. Arimardham Sharma, Adv., Ms. Divya Swami, Adv., Mr. Nikhil Swami, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishra, Adv., Mr. Daman Popli, Adv., Ms. Neetu Devrani, Adv., Mr. Anubhav Yadav, Adv., Mr. Sahil Dhawan, Adv., Mr. Sushant Dua, Adv., Mr. Abhijay Basu, Adv., Mr. Anshuman Chowdhury, Adv., Ms. Kavya Pahwa, Adv., Mr. Ajay Sharma, Adv., Mr. Shivam Chaudhary, Adv., Ms. Saloni Paliwal, Adv., Mr. Subodh Kr. Pathak, Adv., Mr. Shashi Ranjan, Adv., Mr. Pawan Kumar Sharma, Adv., Mr. Akash Swami, Adv., and Mr. Dharmendra Kumar Sinha, AOR JUDGMENT Table of Contents A. Background ..........................................................................................................4 i. Background to the reference ..................................................................................4 ii. The reference ................................................................................................... 11 B. Issues...............................................................................................................13 C. Submissions ....................................................................................................13 D. Principles underpinning the Arbitration Act ................................................... 18 i. Party autonomy ........................ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ...... 102 H. Necessity of maintaining the principle of minimum judicial interference .. 107 I. Prospective Overruling .............................................................................109 J. Conclusion .............................................................................................. 111 A. Background 1. In the present batch of appeals, this Court has to decide the contours defining the independence and impartiality of arbitral tribunals under the Arbitration and Conciliation Act 1996. 1 The Arbitration Act allows parties to agree on a procedure for appointment of arbitrators. The sanctity inhering in the arbitration agreement underscores the autonomy of parties to settle their disputes by arbitrators of their choice. However, the Arbitration Act subjects party autonomy to certain mandatory principles such as the equality of parties, independence and impartiality of the tribunal, and fairness of the arbitral procedure. The reference to the Constitution Bench raises important issues of the interplay between party autonomy and independence and impartiality of the arbitral tribunal. i. Background to the reference 2. The Law Commission of India in its 246th Repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The Court held that the arbitration clause had the following adverse consequences: (i) the choice given by DMRC to the other party was limited; and (ii) the discretion given to DMRC to curate a panel of five persons gave rise to the suspicion that it may have picked up its own favourites. To remedy the situation, it was held that a choice must be given to both parties to nominate any person from the entire panel of arbitrators. Further, this Court observed that in case of a government contract where the authority to appoint an arbitrator rests with a government entity, there is an imperative to have a broad based panel 8 to instil confidence in the mind of the other party and secure the principle of independence and impartiality at the stage of the constitution of the arbitral tribunal. 9 6. In TRF Ltd v. Energo Engineering Projects Ltd, 10 the purchase order issued by the respondent to the appellant contained an arbitration clause that stated that any dispute or difference between the parties in connection with the agreement shall be referred to sole arbitration of the Managing Director of Buyer or his nominee. After a dispute arose between the parties about the encashment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppointing an arbitrator has in the outcome of the dispute. The Court held that a person having an interest in the dispute cannot and should not have any role in charting out any course to the dispute resolution by having the power to appoint an arbitrator. 13 9. TRF (supra) and Perkins (supra) both dealt with a situation where a person who was rendered ineligible in terms of Section 12(5) was making an appointment of a sole arbitrator. Consequently, Perkins (supra) relied on TRF (supra) to observe that a person who has an interest in the dispute or its outcome should not have the power to unilaterally appoint a sole arbitrator: 16. [ ] The next sentences in the paragraph, further show that cases where both the parties could nominate respective arbitrators of their choice were found to be completely a different situation. The reason is clear that whatever advantage a party may derive by nominating an arbitrator of its choice would get counter-balanced by equal power with the other party. But, in a case where only one party has a right to appoint a sole arbitrator, its choice will always have an element of exclusivity in determining or charting the course for dispute resolution. Natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable because the right of the General Manager in formation of Arbitral Tribunal is counter- balanced by respondent s power to choose any two from out of the four names and the General Manager shall appoint at least one out of them as the contractor s nominee. The Court upheld the validity of the arbitration clause and directed the constitution of the arbitral tribunal in terms of the agreement. ii. The reference 12. In Union of India v. Tantia Constructions Limited, 15 a three Judge Bench prima facie disagreed with CORE (supra), observing: 1. on the facts of this case, the judgment of the High Court cannot be faulted with (sic). Accordingly, the Special Leave Petition is dismissed. However, reliance has been placed upon a recent three- Judge Bench decision of this Court delivered on 17.12.2019 in Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV) A Joint Venture Company, 2019 SCC OnLine SC 1635. We have perused the aforesaid judgment and prima facie disagree with it for the basic reason that once the appointing authority itself is incapacitated from referring the matter to arbitration, it does not then follow that notwithstanding this yet appointments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the tribunal. The test to determine the existence of reasonable apprehension of bias is that of a reasonable third person; c. Section 12(5) overrides an arbitration agreement because of the non obstante clause. Although the statute does not specifically bar an ineligible person from appointing an arbitrator, TRF (supra) and Perkins (supra) rightly held that an ineligible person could not appoint an arbitrator or curate a panel of arbitrators. The thread running through TRF (supra) and Perkins (supra) is that if a person has an interest in the outcome of the dispute, such person should not have any role in the process of appointing an arbitrator, including curation of a panel of potential arbitrators; d. TRF (supra) and Perkins (supra) only carved out an exception for situations where both parties are permitted to appoint an arbitrator of their choice; e. A unilaterally appointed panel is contrary to the principle of equal treatment of parties enshrined under Section 18, which is a mandatory provision. Although Section 18 is part of Chapter V dealing with the conduct of arbitral proceedings, it also applies at the stage of the constitution of arbitral tribunals. A lack of mutua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itrator under Section 11(8) arises only in situations contemplated under Sections 11(4), 11(5), and 11(6) where parties fail to abide by the agreed procedure. The provision does not hinder the right of the parties to agree on a procedure for appointment of arbitrators under Section 11(2); c. The action of appointing or enlisting a person as an arbitrator is distinct from acting as an arbitrator. Section 12(5) expressly prohibits a person who is ineligible in terms of the Seventh Schedule from being appointed as an arbitrator. However, the Arbitration Act does not expressly prohibit such an ineligible person from appointing an arbitrator or enlisting a panel of potential arbitrators; d. The Arbitration Act does not recognize any presumed ineligibility concerning arbitrators. The ineligibility must be real and actual according to Section 12; e. The equality of treatment under Section 18 does not refer to inter se equality between the parties at the stage of agreeing upon a procedure for appointing an arbitrator. Section 18 mandates the arbitral tribunal to treat the parties with equality and give them a full opportunity to present their case. Further, Section 18 only applies after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional commercial arbitration and enforcement of foreign arbitral awards. It brings the domestic arbitration law in consonance with the UNCITRAL Model Law on International Commercial Arbitration 1985. 22 One of the main objectives of the Arbitration Act is to make provision for an arbitral procedure that is fair, efficient and capable of meeting the needs of the specific arbitration. 19. Article 2A of the Model Law enunciates the following principles to interpret the provisions of national arbitration laws: (i) regard for the arbitration law s international origin; (ii) the need to promote uniformity in its application; and (iii) observance of good faith. It further provides that issues not expressly settled under the arbitration law are to be settled in conformity with the general principles on which the law is based. 23 20. The principles of interpretation suggested by the Model Law require courts to assume a global perspective consistent with the prevailing practice in courts of other jurisdictions and arbitral tribunals. 24 The Model Law encourages resort to general principles to fill the gaps in the national arbitration laws. 25 The term general principles is intended to refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om to decide the number of arbitrators; b. Section 11(2) allows parties the freedom to agree on a procedure for appointing the arbitrator or arbitrators; c. The Proviso to Section 12(5) allows parties to waive the applicability of the provision by an express agreement in writing after the dispute has arisen; and d. Section 14 allows parties to mutually terminate the mandate of an arbitrator. 25. Additionally, the parties are free to agree on the procedures to be followed by the arbitral tribunal, 37 the place of arbitration, 38 the date of commencement of arbitral proceedings, 39 the language to be used in the arbitral proceedings, 40 procedure for hearings and written proceedings, 41 consequence of a default by a party, 42 appointment of experts 43 , and the manner of decision making by the arbitral tribunal. 44 Thus, the Arbitration Act recognises and enforces mutual commercial bargains and understanding between the parties at all stages of the arbitration proceedings. However, the autonomy of the parties under the Arbitration Act is not without limits. It is limited by certain mandatory provisions of the Arbitration Act. ii. Mandatory provisions 26. Part I of the Arbitration Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Law. It was suggested that such a list would make it unnecessary to include in the non-mandatory provisions such wording as unless otherwise agreed by the parties. 55 The Secretariat considered it unnecessary to include a list of mandatory provisions given the overall scheme of the Model Law. 56 It was also of the opinion that mandatory provisions could be discerned from the content of such provisions. 30. Holtzmann and Neuhaus give the following examples of mandatory provisions under the Model Law: Examples of provisions that appear to be mandatory and therefore cannot be waived under Article 4 are the following: the requirement that the arbitration agreement be in writing (Article 7(2)); the requirement that the parties be treated with equality and that each party be given a full opportunity of presenting his case (Article 18); the requirement that a party be given notice of any hearing and be sent any materials supplied to the arbitral tribunal by the other party (Article 24(2), (3)); the requirement that an award including an award on agreement terms be in writing, that it state its date and place, and that it be delivered to the parties (Article 30(2), 31(1), (3), (4)) 57 31. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6), parties are free to agree on a procedure for appointing the arbitrator or arbitrators. Section 11 provides recourse to the following contingencies if the parties fail to adhere to the agreed procedure for the appointment of an arbitrator or arbitrators: (3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator; (4) If the appointment procedure in sub-section (3) applies and (a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or (b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, The appointment shall be made, on an application of a party, by the Supreme Court or, as the case may be, by the High Court or any person or institution designated by such Court. (5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation takes place. 70 37. When appointing an arbitrator under Section 11, the appointing authority has to ensure the appointment of independent and impartial arbitrators in terms of Section 11(8): (8) The Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court shall seek a disclosure in writing from the prospective arbitrator in terms of sub-section (1) of section 12, and have due regard to (a) any qualifications required for the arbitrator by the agreement of the parties; and (b) the contents of the disclosure and other considerations as are likely to secure the appointment of an independent and impartial arbitrator. 38. Section 11(8) requires an appointing authority to have due regard to the qualifications required for the arbitrator as agreed by the parties. For instance, if the agreement only allows a professional of a particular class such as a chartered accountant to serve as an arbitrator, the appointing court should normally abide by this requirement. However, while appointing an arbitrator following the agreed qualifications, the appointing court must also have due regard for considerations that are likely to secure an ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppointment of arbitrators. 75 Section 12(1) mandates that a person who has been approached to be appointed as an arbitrator must disclose in writing any circumstances that are likely to give rise to justifiable doubts as to his independence or impartiality. The Fifth Schedule to the Arbitration Act specifies circumstances that give rise to justifiable doubts as to the independence or impartiality of arbitrators. Section 12(1) also mandates an arbitrator to disclose in writing any circumstances that are likely to affect the ability to devote sufficient time to the arbitration and in particular the ability to complete the entire arbitration within twelve months. The duty of disclosure is a continuing duty. Section 12(3) provides that an arbitrator may be challenged only if: (i) circumstances exist that give rise to justifiable doubts as to independence or impartiality; or (ii) the arbitrator does not possess the qualifications agreed to by the parties. 43. Before the 2015 amendment, this Court generally upheld arbitrator appointment clauses which gave one party unfettered discretion to appoint a sole arbitrator. 76 It was also held that there was no bar under the Arbitration Act for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bitrator to the dispute; and (iii) arbitrator s direct or indirect interest in the dispute. The categories that are relevant for the present reference are as follows: 1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party. 5. The arbitrator is a manager, director or part of the management, or has a similar controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in the matters in dispute in the arbitration. 47. Section 12(5) overrides any prior procedure for appointing the arbitrators agreed upon between the parties under Section 11(2) due to the non obstante clause. However, the proviso to Section 12(5) allows parties to waive the applicability of that provision after the dispute has arisen. The proviso secures real and genuine party autonomy by allowing parties to waive the applicability of Section 12(5). 81 48. Section 12(5) does not prescribe a method to challenge the appointment of an ineligible person. Section 14 deals with the termination of the mandate of an arbitrator who is unable to perform their functions. 82 A person who is ineligible to be appointed as an arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and each party shall be given a full opportunity to present his case. Section 18 establishes two principles: equal treatment of the parties and a right to a fair hearing. This provision has been referred to as the due process clause of arbitration. 91 53. Section 18 is based on Article 18 of the Model Law. Article 18 was initially paragraph 3 of Article 19 dealing with the freedom of parties to determine the rules of procedure. It was later formed into a separate article considering its overall importance. The Working Group stated that the freedom of parties is subject to mandatory provisions including the then paragraph 3 of Article 19: 3. The freedom of the parties is subject only to the provisions of the model law, that is, to its mandatory provisions. The most fundamental of such provisions, from which the parties may not derogate, is the one contained in paragraph (3). Other such provisions concerning the conduct of the proceedings or the making of the award are contained in articles 23(1), 24(2)-(4), 27, 30(2), 31(1), (3), (4), 32 and 33(1), (2), (4), (5). (emphasis supplied) 54. Ultimately, paragraph 3 of Article 19 was placed in a separate article in the form of Article 18. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds for setting aside an arbitral award have been narrowly framed, the thrust of this privately ordered legal system is on the decision made by the arbitral tribunal. Moreover, the Arbitration Act mandates the arbitration proceedings to be conducted following two main principles: (i) equality of parties; and (ii) independence and impartiality of arbitral proceedings. 58. In Pam Developments Private Limited v. State of West Bengal 101 , the arbitrator made an award in favour of the contractor. When the contractor sought to enforce the award, the State government obtained a stay by relying on Order XXVII Rule 8-A of the Code of Civil Procedure 1908. 102 This Court held that since the Arbitration Act is a self-contained code, the provisions of the CPC will apply only insofar as the same are not inconsistent with the spirit and provisions of the Arbitration Act. Noting that no special treatment can be given to the government under the Arbitration Act, the Court observed: 26. Arbitration proceedings are essentially alternate dispute redressal system meant for early/quick resolution of disputes and in case a money decree award as passed by the arbitrator against the Government is allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contemplating an opportunity of presenting its case to a party, ascertainment of facts by means of evidence if a dispute be on questions of fact, and if the dispute be on question of law on the presentation of legal argument, and a decision resulting in the disposal of the matter on findings based upon those questions of law and fact. 60. An arbitrator s relationship with parties is contractual. The rights and obligations of an arbitrator are principally the result of the contractual relations with the parties. 107 However, the position under common law is that the rights and duties of an arbitrator are derived from a conjunction of contract and quasi-judicial status granted by national laws. In Norjarl v. Hyundai Heavy Industries, Lord Browne-Wilkinson observed that it is impossible to distinguish contractual matters from those of quasi-judicial status. 108 Similarly, in ONGC v. Afcons Gunanusa JV, this Court recognized that the rights and duties of arbitrators flow from: (i) the national laws governing arbitration which give a quasi-judicial status to arbitrators wheres they have to act as impartial adjudicators; and (ii) the arbitrator s contract with the parties which governs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of law and rules of natural justice. 115 An arbitral award can be set aside if the composition of the arbitral tribunal or the arbitral procedure violates the mandatory provisions of the Arbitration Act, including Sections 12 and 18. Thus, the Arbitration Act emphasizes that the substance of the law cannot be divorced from the procedure. 65. Section 31 mandates that an award made by an arbitrator shall be in writing and signed by all members of the arbitral tribunal. 116 The provision further provides that an arbitral award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given. This provision is consistent with the principle that a quasi-judicial authority must generally record its reasons in support of the order it makes. 117 Further, the decision rendered by an arbitral tribunal is binding and enforceable in the same manner as if it were a decree of the court. 118 66. Arbitral tribunals serve as effective alternatives to traditional justice dispensing mechanisms. The purpose of arbitral tribunals is to be expeditious where the law is slow, cheap where the law is costly, simple where the law is technical, and a peace-make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Marketing. It was contended that an arbitration clause which allows one party to nominate its officer as the sole arbitrator is against the principle of independence and impartiality contained in Sections 11(8), 12, and 18. A two-Judge Bench of this Court rejected this contention by holding that Sections 11, 12, and 18 do not prohibit an employee of either of the parties from acting as an arbitrator: 32. Section 18 requires the arbitrator to treat the parties with equality (that is to say without bias) and give each party full opportunity to present his case. Nothing in Sections 11, 12, 18 or other provisions of the Act suggests that any provision in an arbitration agreement, naming the arbitrator will be invalid if such named arbitrator is an employee of one of the parties to the arbitration agreement. Raja Transport (supra) was delivered before the 2015 amendment. Section 12(5) now renders an employee of either of the parties ineligible for being appointed as an arbitrator. 70. The concept of equality under Article 14 enshrines the principle of equality of treatment. The basic principle underlying Article 14 is that the law must operate equally on all persons under like circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent has introduced concrete standards of impartiality and independence of arbitrators. One of the facets of impartiality is procedural impartiality. Procedural impartiality implies that the rules constitutive of the decision-making process must favour neither party to the dispute or favour or inhibit both parties equally. 137 Further, a procedurally impartial adjudication entails equal participation of parties in all aspects of adjudication for the process to approach legitimacy. 138 Participation in the adjudicatory process is meaningless for a party against whom the arbitrator is already prejudiced. 139 Equal participation of parties in the process of appointment of arbitrators ensures that both sides have an equal say in the establishment of a genuinely independent and impartial arbitral process. 74. Under Sections 12(1) and 12(5), the Arbitration Act recognises certain mandatory standards of independent and impartial tribunals. The parties have to challenge the independence or impartiality of the arbitrator or arbitrators in terms of Section 12(3) before the same arbitral tribunal under Section 13. 140 If the tribunal rejects the challenge, it has to continue with the arbitral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laws within the territory of India. Article 14 is founded on a sound public policy to secure to all persons, citizens or non-citizens, the equality of status and opportunity. 149 One of the dimensions of the equality jurisprudence evolved by this Court is that arbitrariness is antithetical to equality. 150 State action must be based on principles of fairness and equality of treatment. 151 Article 14 strikes at arbitrary actions and ensures fairness and equality of treatment. 152 Violation of the principles of natural justice results in arbitrariness. 153 The principle of reasonableness is an essential element of equality. 154 Resultantly, a procedure contemplated under Article 21 must be just, fair, and non- arbitrary. This Court has recognized that the concept of reasonableness and non-arbitrariness pervades the entire constitutional scheme. 155 79. In Union of India v. Tulsiram Patel, 156 a Constitution Bench of this Court observed that violation of the principles of natural justice results in arbitrariness: 95. The principles of natural justice have thus come to be recognized as being a part of the guarantee contained in Article 14 because of the new and dynamic interpretation g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al relationship is subject to certain inherent principles which a quasi-judicial body like an arbitral tribunal is required to adhere to. Resolution of private disputes following the minimum statutory standards of equality and fairness is essential not only in the interest of justice, but also to uphold the integrity of arbitration in India. ii. Doctrine of bias 82. In A K Kraipak v. Union of India, 162 the Central Government constituted a Special Selection Board for selecting officers to the Indian Forest Service in the senior scale and junior scale from the serving officers of the Forest department of the State of Jammu and Kashmir. One of the members of the selection board was the officiating Chief Conservator of Forests of Jammu and Kashmir. However, the Chief Conservator was also one of the candidates in contention for the posts in the Indian Forest Service. Although the Chief Conservator was not present when his name was considered for selection by the board, he was present and participated in the deliberations when the names of other candidates were being considered. 83. The Constitution Bench held that the real question was not whether the Chief Conservator was biased, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a quid pro quo or, in other words, you see that my book is selected and in return I will do the same for you. In either case, when a book of an author- member comes up for consideration, the other members would feel themselves embarrassed in frankly discussing its merits. Such author-member may also be a person holding a high official position whom the other members may not want to displease. It can be that the other members may not be influenced by the fact that the book which they are considering for approval was written by one of their members. Whether they were so influenced or not is, however, a matter impossible to determine. It is not, therefore, the actual bias in favour of the author- member that is material but the possibility of such bias. (emphasis supplied) 86. In J Mohapatra (supra), it was observed that a decision-maker who is prejudiced can possibly influence the decision of the authority in tangible and intangible ways. This Court recognized that the doctrine of necessity serves as an exception to the nemo judex rule. An adjudicator, who is subject to disqualification on the ground of bias or interest in the matter which he has to decide, may be required to adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue that is to be resolved would be acting as a judge in their own cause 172 The question is not whether a judge has some link with parties involved in a cause before the judge but whether the outcome of that cause could realistically affect the judge s interest. 173 This principle has been authoritatively stated by the House of Lords in Dimes v. Grand Junction Canal. 174 In that case, the Lord Chancellor decreed in favour of a canal company in which he held substantial shares. The House of Lords observed that the principle that no person should be judge in their own cause is not to be confined to a cause in which he is a party, but applies to a cause in which he has an interest. 175 90. In R v. Bow Street Metropolitan Stipendiary Magistrate, ex parte Pinochet Ugarte (No. 2), 176 the House of Lords held that the former head of Chile was not immune from extradition to Spain for trial of alleged crimes against humanity. Lord Hoffman was one of the five members who agreed with the majority. During the hearings, Amnesty International, 177 a human rights body, intervened and participated in the proceedings. It came to light after the judgment that Lord Hoffman was a director and chair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be vitiated if there is even a suspicion that there has been improper interference with the course of justice. 94. Over the course of time, the English courts have preferred the test of real likelihood to determine bias. In R v. Barnsley Licencing Justices, 181 Devlin LJ observed that real likelihood depends on the impression that the court gets from the circumstances in which the justices were sitting. However, in Metropolitan Properties Company v. Lannon, 182 Lord Denning expressed the test of the real likelihood of bias as being whether a reasonable person would think it likely or probable that a judge or member of a tribunal was biased. 95. In Regina v. Gough, 183 the House of Lords observed that the probability standard laid down by Lord Denning in Metropolitan Properties (supra) was too rigorous a test. It reconciled the real likelihood of bias test by grounding it in terms of possibility rather than the probability of bias. Therefore, it restated the test in terms of the real danger of bias: [ ] having ascertained the relevant circumstances, the court should ask itself whether, having regard to those circumstances, there was a real danger of bias on the part of the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal danger, the two being the same, that the tribunal was biased. In Porter v. Magill, 187 the House of Lords approved the adjustment made to the real danger of bias test. Lord Craighead stated the bias test thus: 103. [ ] The question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased. 98. The shift in the bias test in the UK has at its core the need for the confidence which must be inspired by the courts in a democratic society. 188 In Lawal v. Northern Spirit Limited, 189 Lord Bingham observed that a fair-minded and informed observer 190 will adopt a balanced approach and as a reasonable member of the public is neither complacent nor unduly sensitive or suspicious. The above discussion shows that the bias test has undergone significant development in the UK over the last four decades. The current bias test in the UK is the real possibility of a bias test. 99. The real likelihood of bias test has also been applied by the UK Supreme Court in the case of arbitral bias. In Haliburton Company v. Chubb Bermuda Insurance Ltd., 191 the issue before the UK Supreme Court was whether o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position offers significant guarantees to exclude any legitimate doubt in respect of its impartiality. 198 102. In the vast majority of cases, the ECtHR has focused on the objective test, which requires the court to determine whether, quite apart from the judge s conduct, there are ascertainable facts which may raise doubts as to his or her impartiality. 199 The objective test takes into consideration hierarchical and other links between a judge and the parties to the proceedings. The ECtHR s approach, therefore, emphasizes determining whether the relationship in question is of such a nature and degrees as to indicate a lack of impartiality on the part of the tribunal. 200 The real possibility of bias test as evolved by the English courts is in alignment with the bias test evolved by the ECHR. 201 The ECtHR has held that an arbitration agreement does not constitute a waiver of the fair procedure guarantees contained in Article 6, particularly the right to have disputes settled by an independent and impartial tribunal. 202 iv. Indian approach to the bias test 103. This Court has consistently adopted the real likelihood test to determine bias. 203 In Manak Lal v. Dr. Prem Chand Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest in the outcome of a case, he is automatically disqualified from hearing the case. 25.2. In cases where the interest of the Judge in the case is other than financial, then the disqualification is not automatic but an enquiry is required whether the existence of such an interest disqualifies the Judge tested in the light of either on the principle of real danger or reasonable apprehension of bias. 25.3. The Pinochet case added a new category i.e. that the Judge is automatically disqualified from hearing a case where the Judge is interested in a cause which is being promoted by one of the parties to the case. 107. Although there have been vacillations about the test in England, the Indian courts have been largely consistent in their approach by applying the test of real likelihood of bias or reasonable apprehension of bias. Recently, the court has used the real danger of bias test. However, the above discussion shows that there is no significant difference between the real danger of bias test and the real possibility of bias test if the question of bias is inferred from the perspective of a reasonable or fair-minded person. 108. This Court has consistently applied the test of rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delines on Conflicts of Interest in International Arbitration. 215 In HRD Corporation (supra) this Court observed that the categories listed under the Fifth and Seventh Schedules must be construed by taking a broad commonsensical approach without restricting or enlarging the words. 111. Section 12 of the Arbitration Act places a duty on a person who is approached for appointment as an arbitrator to disclose in writing any direct or indirect circumstances such as: (i) the existence of any direct or indirect past or present relationship with any of the parties; (ii) interest in any of the parties; or (iii) interest in relation to the subject-matter in dispute, whether financial, business, professional, or other kind. The disclosure of circumstances made by an arbitrator is a procedural safeguard which allows the parties to assess whether disqualification of the arbitrator is required for a case. 216 Disclosure allows an arbitrator to overcome an appearance of bias. The parties may challenge the appointment of an arbitrator if the circumstances give rise to justifiable doubts as to their independence or impartiality. 112. In Voestalpine (supra), this Court explained the distinction be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and independence. 222 Resultantly, the possibility of doubts must be real in the sense that they should be derived from the objective circumstances disclosed by an arbitrator. 115. The consideration of possible doubts must be undertaken from the perspective of a fair-minded and informed person rather than the subjective views of the parties or the arbitrators. According to Gary Born, the standard of proof adopted under Article 12 of the Model Law is relatively low to ensure the integrity of the arbitral tribunal and arbitral process, particularly given the extremely limited review available for substantive or procedural errors by the arbitrators. 223 The issue of arbitrator bias is to be resolved by applying the test of the real likelihood of bias in the given facts and circumstances. 116. Section 12(5) automatically disqualifies any person whose relationship with the parties or counsel or subject matter of the dispute falls under any of the categories mentioned under the Seventh Schedule. The categories listed in the Seventh Schedule in essence denote situations where an arbitrator might have a pecuniary, proprietary, or cause-based interest in the arbitration. For instance, emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct one and the third arbitrator shall be appointed under the Rules of Arbitration of the Indian Council of Arbitration. After disputes arose between the parties, the State government appointed a retired Engineer-in-Chief as their arbitrator. The contractor and the Indian Council of Arbitration224 challenged the appointment of the State s arbitrator on the ground that he was a former employee of the State government. The issue before this Court was whether Section 12(5) read with the Seventh Schedule disqualifies a former employee from being appointed as an arbitrator. 119. Justice Indu Malhotra, writing for the Bench of two judges, held that the apprehension of bias against the State s arbitrator was unjustified because: (i) the arbitrator was employed by the State over ten years ago; (ii) the use of the expression is an under Entry 1 of the Seventh Schedule indicates that an arbitrator is disqualified only if they are current employees of one of the parties; and (iii) the expression other under the said entry indicates a relationship other than an employee. It was observed that the expression other cannot be used to widen the scope of the entry to include past/former employees. 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances. 231 The proviso to Section 12(5) allows parties to exercise their autonomy to determine if there is a necessity to waive the applicability of the ineligibility prescribed under Section 12(5). Thus, common law principles and doctrines are adjusted to subserve the fundamental principles of arbitration by giving priority to the autonomy of parties. 123. In Bharat Broadband Network Ltd. (supra), this Court held that the proviso to Section 12(5) requires an express agreement in writing, that is, an agreement made in words as opposed to an agreement that can be inferred by conduct.232 It was explained that such an agreement must be made by both parties with full knowledge of the fact that although a particular person is ineligible to be appointed as an arbitrator, the parties still have full faith and confidence in them to continue as an arbitrator. 233 The principle of express waiver contained under the proviso to Section 12(5) also applies to situations where the parties seek to waive the allegation of bias against an arbitrator appointed unilaterally by one of the parties. After the disputes have arisen, the parties can determine whether there is a necessity to wai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous advantages, including easy arrangements of meetings or hearings, reduced expenses since the parties will only have to bear the expense of one arbitrator, and speedy decision-making. 238 In the case of the appointment of a sole arbitrator, the decision-making vests in the hands of one person. This poses a greater risk of bias against the weaker party, especially if the arbitrator is unilaterally appointed by the other party. 128. If a person having a financial interest in the outcome of the arbitral proceedings unilaterally nominates a sole arbitrator, it is bound to give rise to justifiable doubts on the independence and impartiality of the arbitrator. The possibility of bias by the arbitrator is real because the person who has an interest in the subject matter of the dispute can chart out the course of the entire arbitration proceeding by unilaterally appointing a sole arbitrator. A party may select a particular person to be appointed as a sole arbitrator because of a quid pro quo arrangement between them. Moreover, the fact that the sole arbitrator owes the appointment to one party may make it difficult to decide against that party for fear of displeasure. It is not possible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s where the arbitrators are appointed by the parties in the exercise of their genuine party autonomy. TRF (supra) and Perkins (supra) have been relied upon by this Court on numerous occasions, including in Glock Asia-Pacific Limited v. Union of India 245 and Lombardi Engg Ltd. v. Uttarakhand Jal Vidyut Nigam Ltd. 246 132. In Voestalpine (supra) and CORE (supra), one of the parties curated a panel of arbitrators and mandated the other party to select their arbitrator from the panel. Since the curation of the list is exclusively undertaken by one party, the other party is effectively excluded from the process of curating the panel from which exclusively, the appointment of an arbitrator is to be made. The other party has to mandatorily select its arbitrator from a curated panel, restricting their freedom to appoint an arbitrator of their choice. This is against the principle of equal treatment contained under Section 18. In this situation, there is no effective counter-balance because both parties do not participate equally in the process of appointing arbitrators. The party curating the panel can restrict the choice of the party only to a person who is on the panel selected by the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trator. Moreover, the clause allows the General Manager to appoint the balance arbitrators from either the panel or outside the panel. Thus, the process of appointing the arbitrators is unequal because the General Manager can go beyond the panel of four potential arbitrators, while the contractor is bound by the names enlisted in the panel. 136. In a three-member tribunal, the independence and impartiality of a third or presiding arbitrator are prerequisites to the integrity of the arbitral proceedings. In CORE (supra), the arbitration clause allowed the General Manager to unilaterally nominate the presiding officer out of the panel of three arbitrators. The clause does not countenance any participation from the contractor in the process of appointing or nominating the presiding officer. Thus, the process of appointing and nominating the presiding officer is unequal and prejudiced in favour of the Railways. The fact that the General Manager is nominating the presiding officer gives rise to a reasonable doubt about the independence and impartiality of the entire arbitration proceedings. 137. Given the above discussion, it needs reiteration that the Arbitration Act does not prohibit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as immoral, or opposed to public policy. 141. Although the Contract Act does not define the expression public policy , it has generally been defined as a principle of judicial legislation or interpretation founded on the current needs of the community. 251 Section 23 codified the common law position that all contracts and agreements which have as their object anything contrary to principles of sound policy are void. 252 The prevalent view in the nineteenth century was that the doctrine of public policy should be governed by precedent and courts should refrain from inventing new heads of public policy. The purpose behind limiting the grounds of public policy was to respect the freedom of contract of parties, which was also considered as a paramount policy in common law. 253 Under the common law, a contract for marriage brokerage, creation of a perpetuity, in restraint of trade, gaming or wagering, or assisting the King s enemies were unlawful and opposed to public policy. 254 142. This Court has adopted a flexible approach to the application of the doctrine of public policy to contracts. In Gherulal Parakh v. Mahadeodas Maiya, 255 this Court had to decide on the validity of a wage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argaining power: 89. [ ] The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws. The principle deducible from the above discussions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Article 14. This principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries, 263 this Court held that in the contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant facet. It was further observed that since a public authority possesses powers only to use them for the public good, they have a duty to act fairly and to adopt a procedure which is fair play in action . 264 146. In Tata Cellular v. Union of India, 265 this Court held that contractual decisions of government and its instrumentalities must be free from arbitrariness not affected by bias or actuated by mala fides. In a public- private contract, the state must act fairly, justly, and reasonably. 266 When a state acts contrary to the public good or public interest, it acts contrary to Article 14. 267 147. In ICOMM Tele Ltd. v. Punjab State Water Supply and Sewerage Board, 268 this Court had to adjudicate on the validity of a pre-deposit arbitral clause in a public-private contract. According to the pre-deposit clause, a party invoking arbitration was required to furnish a deposit-at-call for ten percent of the amount claimed. To determine the validity of the clause fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nscionable result.275 150. The doctrine of unconscionability has roots in equity. An unconscionable contract is a contract which no man in his senses, not under delusion, would make, on the one hand, and which no fair and honest man would accept on the other. 276 Unconscionability has also been defined to include: (i) an absence of meaningful choice on the part of one of the parties; and (ii) unreasonable contractual terms favourable to one party. 277 The unconscionability doctrine seeks to balance the freedom of contract with the values of protecting the weaker parties from imposition and oppression. 278 151. Unconscionability focuses on abuses relating to the contract formation process (procedural unconscionability) and the substantive terms of the contract (substantive unconscionability). 279 In determining procedural unconscionability, the court is concerned with factors such as the relative bargaining power of the parties and whether the parties had a meaningful choice. Substantive unconscionability is geared towards pitting the substance of the contractual terms against the legitimate interests of the parties and considerations of public policy. 280 152. US courts have consis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arbitration agreement provided the employee an effective substitute for the judicial forum . The agreement allowed the employer to unilaterally select a pool of at least five potential arbitrators. The employer and employee were required to mutually select a sole arbitrator from that pool of arbitrators by alternatively striking names until only one remained. The Court held that the process of selection of the arbitrator prevented the arbitration from being an effective substitute for a judicial forum because: (i) the employer exercised unilateral control over the entire panel; (ii) the arbitrator selection procedure allowed the employer to create a symbiotic relationship with its arbitrators, which promulgated bias; and (iii) the arbitrator selection procedure inherently lacked fairness and neutrality. iii. Public-private contracts and public policy of arbitration 155. Although arbitration law is an autonomous legal field, 288 it functions within the boundaries prescribed by the state. For instance, adjudication of certain proceedings is reserved by the legislature exclusively for the courts as a matter of public policy. 289 The non-arbitrable proceedings generally include dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that provide a basis for administration of justice and enforcement of law in this country. Without intending to exhaustively enumerate instances of such contravention, by way of illustration, it could be said that (a) violation of the principles of natural justice; (b) disregarding orders of superior courts in India or the binding effect of the judgment of a superior court; and (c) violating law of India linked to public good or public interest, are considered contravention of the fundamental policy of Indian law. 159. In Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd., 296 this Court held that the most basic notions of morality and justice under the concept of public policy will include bias. 160. The provisions of the statute, including Section 34, highlight the important role played by the Indian legal system in recognising and enforcing arbitral awards. It is one such instance where the Indian courts exercise a measure of control over the private arbitral process. 297 This control over the arbitral process ensures that the arbitral awards are made by following certain minimum standards of due process and justice. 298 Thus, the courts must ensure that the arbitral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia in the context of arbitration. Therefore, unilateral appointment clauses in public-private contracts are violative of Article 14 of the Constitution for being arbitrary in addition to being violative of the equality principle under the Arbitration Act. H. Necessity of maintaining the principle of minimum judicial interference 164. In re Interplay Between Arbitration Agreements under Arbitration and Conciliation Act 1996 and the Stamp Act 1899, 302 a seven judge Bench of this Court emphasized the importance of minimal judicial interference by the courts at the Section 11 stage. This Court held that the scope of the proeceeding under Section 11 must be confined to the existence of an arbitration agreement. The Court further observed: 165. The legislature confined the scope of reference under Section 11(6-A) to the examination of the existence of an arbitration agreement. The use of the term examination in itself connotes that the scope of the power is limited to a prima facie determination. Since the Arbitration Act is a self- contained code, the requirement of existence of an arbitration agreement draws effect from Section 7 of the Arbitration Act. In Duro Felguera [Duro Felguera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to examine the existence of arbitration agreements, whereas the Arbitral Tribunal ought to rule on its jurisdiction, including the issues pertaining to the existence and validity of an arbitration agreement. (emphasis supplied) The Constitution Bench held that the nature of objections to the jurisdiction of an arbitral tribunal on the basis that stamp duty has not been paid or is inadequate cannot be decided on a prima facie basis. 303 Hence, it was observed that objections of such a kind will require a detailed consideration of evidence and submissions and a finding as to the law as well as the facts. 165. At the Section 11 stage, a referral court only has to determine the existence of arbitration agreement. The validity of the arbitration clause providing for the procedure for appointment of arbitrators will require the referral court to enter into a detailed consideration of evidence and render a finding as to law and facts. This issue should be left to be decided by the arbitral tribunal in view of the doctrine of competence-competence. The arbitral tribunal is competent to rule on its jurisdiction, including the issue of validity of the arbitration clause for violati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entered into by both the government and private entities. Therefore, we hold that the law laid down in the present reference will apply prospectively to arbitrator appointments to be made after the date of this judgment. This direction only applies to three-member tribunals. J. Conclusion 169. In view of the above discussion, we conclude that: a. The principle of equal treatment of parties applies at all stages of arbitration proceedings, including the stage of appointment of arbitrators; b. The Arbitration Act does not prohibit PSUs from empanelling potential arbitrators. However, an arbitration clause cannot mandate the other party to select its arbitrator from the panel curated by PSUs; c. A clause that allows one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts as to the independence and impartiality of the arbitrator. Further, such a unilateral clause is exclusive and hinders equal participation of the other party in the appointment process of arbitrators; d. In the appointment of a three-member panel, mandating the other party to select its arbitrator from a curated panel of potential arbitrators is against the principle of equal treatment of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration Act, rather than invoking constitutional and administrative law principles, in my opinion, will not only preserve impartiality in the appointment of arbitrator but will also ensure party autonomy. It is also imperative to observe that Courts should exercise judicial restraint at the threshold stage of appointing an arbitrator. This will then safeguard the core principles of equality, party autonomy, and minimal judicial intervention in the arbitration domain. 5. The notion that Alternative Dispute Resolution offers rough justice rather than true justice, is no more in vogue although some scepticism towards arbitration was earlier noticed, across various jurisdictions 1 . Trusting the arbitral process is essential and we must dispel the notion that arbitration provides second-hand justice . To lend credibility to the arbitral process, statutory procedural safeguards promoting basic fairness must be given full play. A key factor in establishing arbitration s legitimacy lies in ensuring independence and impartiality at all stages of the arbitral process. At the same time, excessive judicial intervention must be avoided. By striking this balance between procedural protections an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minimise the intervention of the Courts and provide for timely resolution of disputes. It is also crucial to note that the Parliament in Section 5, made a significant departure from Article 5 of Model law by adding a non-obstante clause, Notwithstanding anything contained in any other law , emphasizing that the Courts should exercise restraint and other laws should not be made the basis for court s intervention with the agreed arbitral process. 9. Section 11 deals with Appointment of Arbitrator . Section 11(2) provides that subject to Section 11(6), parties are free to agree on a procedure for appointing the arbitrator or arbitrators . At this stage, the language in Section 11(6) of the Arbitration Act needs to be noticed which reads thus: (6) Where, under an appointment procedure agreed upon by the parties, (a) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or (c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure 10. The consideration to be given to the agreed procedure is also clear from Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orking group considered at some length adding to Article 11 an explicit on the parties freedom to determine the procedures for selection of arbitrators. The provision would have stated that a procedure agreed upon by the parties would be invalid if or to the extent that it gave one party a predominant position or in the words of an alternate draft a manifestly unfair advantage with regard to the appointment of arbitrators. This provision was later deleted because (1) the problem did not arise frequently; (2) other provisions of the law such as Article 12 and 34, could be used to address the problem and (3) the wording was regarded as too vague and thus could lead to dilatory tactics and potentially invalidation of well-established and recognized appointment practices 14. The court s role in ensuring an arbitrator s impartiality and independence is indeed essential. However, this duty, as is clear from above, must be grounded in Section 12 of the Arbitration Act which provides adequate standards for dealing with potential conflicts or biases. By setting specific parameters for impartiality, Section 12 effectively limits arbitrary or unjustified challenges while still safeguarding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a forum chosen by parties as a complete remedy for resolving all their claims is but part of that evolution. Minimising the intervention of courts is again a recognition of the same principle. [emphasis supplied] 20. In the significant decision on the Interplay Between Arbitration Agreements under A C Act, 1996 Stamp Act, 18999, 7 judges of this Court had emphasized on the minimal supervisory roles of Court in arbitral process: 81. One of the main objectives behind the enactment of the Arbitration Act was to minimize the supervisory role of courts in the arbitral process by confining it only to the circumstances stipulated by the legislature. For instance, Section 16 of the Arbitration Act provides that the arbitral tribunal may rule on its own jurisdiction including ruling on any objection with respect to the existence or validity of the arbitration agreement. The effect of Section 16, bearing in view the principle of minimum judicial interference, is that judicial authorities cannot intervene in matters dealing with the jurisdiction of the arbitral tribunal. Although Sections 8 and 11 allow courts to refer parties to arbitration or appoint arbitrators, Section 5 limits the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of ineligibility as set in the proposed Fifth Schedule. This could be in situations of family arbitrations or other arbitrations where a person commands the blind faith and trust of the parties to the dispute, despite the existence of objective justifiable doubts regarding his independence and impartiality. To deal with such situations, the Commission has proposed the proviso to section 12(5), where parties may, subsequent to disputes having arisen between them, waive the applicability of the proposed section 12(5) by an express agreement in writing. In all other cases, the general rule in the proposed section 12(5) must be followed. In the event the High Court is approached in connection with appointment of an arbitrator, the Commission has proposed seeking the disclosure in terms of section 12(1). and in which context the High Court or the designate is to have due regard to the contents of such disclosure in appointing the arbitrator. [emphasis supplied] 26. The Law Commission also significantly noted that if the appointing authority is the State, it is even more essential to have an independent and impartial tribunal. Weighing the observations of the 246th Report of the Law co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section (3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal. Section 13(4) next states that if a challenge to an arbitrator under 13(1) or 13(2) is not successful; the tribunal shall continue with the proceedings. 30. Section 14 is titled Failure or impossibility to Act . It provides for the termination of an arbitrator s mandate if he, de facto or de jure, becomes unable to perform his functions or for other reasons, fails to act without undue delay. Unless agreed otherwise, one can apply to Court to decide on the termination of a mandate. It is crucial to note that the term Court herein is not the Section 11 Court. 31. Section 15 is titled Termination of mandate and Substitution of Arbitrator . Section 15(1) states that in addition to the circumstances mentioned in Section 13 and 14, the mandate of an arbitrator shall terminate when he withdraws from office for any reason, or by (or pursuant to) an agreement of the parties. Section 31 provides for the form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bench of two judges was whether the panel of arbitrators prepared by DMRC violated Section 12 of the Arbitration Act. It was held that Section 12(5) read with the Seventh Schedule does not bar retired government employees, from serving as arbitrators. It however held that in the case of a government contract where the authority to appoint arbitrators rests with a government entity, it is imperative to have a broad-based panel to secure the principle of impartiality and independence of the Arbitrator. It is relevant to note that the basis on which such a panel was upheld in Voestalpine(supra) was that the persons who have been nominated are subject to the rigours of Section 12. 36. In Perkins (supra), the question before the 3-judge bench was whether the Managing Director of the Respondent, who is ineligible to be appointed as an arbitrator under Section 12(5) read with Seventh Schedule, can nominate the sole arbitrator. Therefore, the Court was only concerned with the authority or power of the Managing Director and cannot be understood to conclude that unilateral appointments are impermissible. The distinction between ineligibility and unilateral appointments must be borne in mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion would be like a soulless process. The Arbitration Act as discussed earlier provides for adequate guard rails to ensure that the arbitrator(s) to be appointed are capable of independently discharging their responsibilities. The Sixth and Seventh Schedule requires the proposed arbitrator(s) to disclose any circumstances that might reasonably affect their impartiality, including relationship with the parties, the counsel or the subject matter of the dispute. In this scenario, since parties opt for the arbitration route to avoid redressal in Court, minimal judicial intervention should be the norm. 41. In my view, all unilateral appointments must not be declared void by way of a declaration of this Court. The 2015 Amendment in Section 12(5) itself provides for a specific waiver i.e. (a) an express consent in writing and (b)the consent must be obtained after the dispute has arisen. Therefore, it is abundantly clear that an agreement between the parties(provided it satisfies the specific waiver requirements under Section 12(5)) can effectively cure any concerns about impartiality or independence in such cases. 42. Adequate safeguards are provided within the Arbitration Act to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as Substitute Dispute Resolution ........................................................... 5 i. Two inviolable values of Arbitration, party autonomy and an independent and impartial Arbitral Tribunal. ................................................................................... 6 D. Party autonomy ..................................................................................................... 7 E. Obligations of parties to the Arbitration Agreement to constitute an independent and an impartial Arbitral Tribunal................................................................................ 9 i. Distinct duties of Arbitrators and Arbitrating Parties.................................................. 9 ii. Freedom of Contract and its limitations under Contract Act. ................................. 10 iii. Public Policy Consideration to Constitute an Independent Tribunal.. .................... 11 iv. The limits of public policy considerations for commercial transactions and inapplicability of unconscionability. ........................................................................ 12 v. Section 28 of the Contract Act and Access to Justice........................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itutional and administrative laws. This is to ensure party autonomy, coupled with minimal judicial intervention, a foundational principle of dispute resolution through arbitration. When parties choose arbitration over Court proceedings as an exception under Section 28 of the Contract Act, they are under a duty to constitute an independent and impartial tribunal as an effective substitute, failing which the arbitration agreement will be void as opposed to public policy under Section 23 of the Contract Act. This obligation is the Second Principle that governs arbitration. Whether the agreement is compliant with the duty to constitute an independent and impartial tribunal and not opposed to the public policy effecting access to justice is always determined by the Court. This is the third principle. There is a clear statutory incorporation of these three principles in the Contract Act and the Arbitration Act. I believe that enduring answers to the questions before this Constitution Bench will lie in the balance between these principles. 2.1 Enquiry into disputes relating to legality and propriety of a contractual clause enabling unilateral appointment of arbitral tribunal arises when a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty autonomy, Section 53 of the Act restrains judicial authorities from intervening with the arbitral remedy except as provided in the Act. The mandate of Section 5 is reflected in a number of judicial decisions of this Court, enabling easy access to arbitration by merely examining the existence of an arbitration agreement between the parties, and at the same time refraining from interfering with the arbitral award on grounds other than manifest arbitrariness or against public policy. 4 6. Two inviolable values of Arbitration, party autonomy and an independent and impartial Arbitral Tribunal: Two important values are inviolable for arbitration to be a viable, effective, and at the same time, credible alternative dispute resolution remedy; they co-exist in the duality of freedom and duty. They are the freedom to contract, constitute, and channel arbitration proceedings, i.e., party autonomy on the one hand, and the duty towards constituting an independent and impartial arbitral tribunal on the other. These values are independent, yet interdependent for a credible and effective dispute resolution.5 7. With this introduction, I will now examine the following issues in detail; (i) Part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a party to communicate statement of claim or defence, or failure to appear at an oral hearing or produce documentary evidence 23 , and regarding the appointment of experts by the arbitral tribunal 24 . 8.3 Fourth, the parties to the arbitration agreement have the freedom to determine the procedure as well as the termination of arbitral proceedings. This will include the determination of the rules applicable for the resolution of the dispute 25 , whether the decision will be made by a majority of the members in an arbitral tribunal with more than one arbitrator 26 , extension of time limit for the completion of proceedings 27 , fast track procedures28, grant of pendente lite and pre-reference interest 29 , and whether the arbitral tribunal can make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the award 30 . 8.4 Fifth, the parties can challenge and/or apply for the enforcement of the award. Chapter VII and Chapter VIII set out the recourse available to parties after the arbitral award, for it to be set aside by the courts 31 , the finality and enforceability of the award 32 , appeals 33 , and miscellaneous provisions 34 . E. Obl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y promise and every set of promises, forming the consideration for each other, is an agreement . Agreements are contracts if they are made by the free consent of parties 35 , and free consent 36 exists when it is not caused by coercion 37 , undue influence 38, fraud 39 and misrepresentation 40 . Furthermore, agreements attain the status of contracts only if they are made for lawful consideration and with a lawful object .41 The consideration or object of an agreement is lawful only when it is not opposed to public policy. It is here that the duty and obligation of the Court arises as it is the exclusive province of the Court to decide if an agreement is in consonance with public policy or not. This position is clear from the text of Sections 10 and 23 of the Contract Act, which are extracted hereinbelow for ready reference; 10. What agreements are contracts. All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Nothing herein contained shall affect any law in force in India and not hereby expressly repealed by which any contract is req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tential arbitrators were held to be unconscionable. Therefore, it is necessary to set out the contours of unconscionability under Indian contract law. 15. Through the doctrine of unconscionability, this Court in Brojo Nath Ganguly (supra) introduced inequality of bargaining power as a ground to refuse enforcement of unreasonable and unfair contracts that shock the conscience of the court. It has envisaged for this principle to apply in cases where the weaker party does not exercise meaningful choice and must agree to a standard form of contract. 48 However, the Court has also circumscribed the applicability of unconscionability and held that it will not apply when parties have equal or almost equal bargaining power, such as in commercial transactions and contracts between businessmen. 49 The inapplicability of unconscionability to commercial contracts has been reiterated by this Court in the context of arbitration agreements. 50 In view of the settled position, I cannot accept the submissions of Mr. Banerji on this issue. 16. Section 28 of the Contract Act and Access to Justice. Access to justice is a constitutional principle. It provides remedies for redressal of grievances arisin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essentiality of remedy such as credibility, efficiency, etc. must continue to inhere in the substituted forum as well. In public law remedies, this issue was considered when administrative tribunals were constituted for the first time to substitute ordinary remedies. It was upheld subject to the condition that the tribunals are worthy successors, meaning that they must have the necessary credibility, efficiency and other features that are integral to judicial remedy. 19. Similarly, arbitration being a substituted remedy contracted by the parties, it must also comprise the basic features of a judicious remedy, the most important being an independent and impartial decision-making forum. 20. The question whether the substituted forum continues to inhere the essentiality of a remedy, in order to be compliant with the larger principle of access to justice, is for the court to examine. The Arbitration Act incorporates this principle of public policy in Sections 11, 12 as well as Section 34. It is in this context that I will now proceed to examine Section 12 of the Act. F. Section 12, subsequent to 2015 Amendment 21. After the amendment, Section 12 of the Act reads: 12. Grounds for challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the procedure under Section 13. While Section 12(3) itself remains unamended, the insertion of Explanation 1 in Section 12(1), read with the Fifth Schedule, now enlists the circumstances that give rise to justifiable doubts as to an arbitrator s independence and impartiality. The Fifth Schedule contains 34 entries that have been adopted from the Red and Orange Lists of the IBA Guidelines. A written disclosure on these grounds must be made in the form provided in the Sixth Schedule. 51 22.1 The second category is under Section 12(5) which declares certain persons to be ineligible to be appointed as arbitrators. These ineligibilities are enlisted in the Seventh Schedule. The provision itself stipulates that such ineligibility is notwithstanding any prior agreement to the contrary. In these situations, the ineligibility of the person to act as an arbitrator is a matter of law and goes to the root of their appointment 52 . As they are de jure unable to perform their function, their mandate automatically terminates under Section 14(1)(a), and the appointment need not be challenged before the arbitral tribunal under Section 13. The parties can apply to the court under Section 14(2) for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that I have delineated hereinabove, and the Fifth and Seventh Schedules enlist the situations when the appointment of certain persons could and would conflict with the independence of the tribunal. The courts can examine whether an appointment procedure accords or violates this provision. Therefore, the court will be guided by Section 12 of the Act, read with the Fifth and Seventh Schedules, to determine whether arbitration agreements providing for unilateral appointments and panel appointments are opposed to the public policy duty on the parties to appoint an independent tribunal. 26. The next important question is the stage at which the court will exercise its power and jurisdiction to examine whether the arbitration agreement is in consonance with Section 12 and the broad public policy principle of constitution of an independent and impartial tribunal. I will now consider this question. G. Power of the Court to Constitute an Independent Tribunal and the stage at which the power is exercised 27. Power of the Court to ensure that the agreement is not only independent and impartial but also seems independent and impartial. 27.1 When a party to the arbitration agreement alleges that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, and while doing so, it shall have due regard to the qualifications required of the arbitrator by the agreement and other consideration as are likely to secure the appointment of an independent and impartial arbitrator, as provided under sub-section (8). 30. While the general rule is that the court may adhere to the appointment procedure in the agreement in view of party autonomy, it is not bound by this procedure. 57 Rather, Section 11(8) allows the Court to weigh other considerations regarding the qualifications of the arbitrator under the agreement, or to secure the independence and impartiality of the arbitrator, and in that light, appoint a person as an arbitrator by deviating from the procedure in the agreement. 58 When there is material to create a reasonable apprehension that the person mentioned in the arbitration agreement as the arbitrator is not likely to act independently or impartially then the Chief Justice or his designate may, after recording reasons for not following the agreed procedure for referring the dispute to the named arbitrator, appoint an independent arbitrator in accordance with Section 11(8) of the Act. 59 31. In such an exceptional situation, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material, and evidence in every application before it, to determine whether a case is made out to appoint an arbitrator de hors the agreement, but such ruling will be specific to that case rather than a declaration prohibiting such agreements altogether. 34. Assertions that a person s freedom to contract is grounded only in common law and statute, are ostensible at best. The freedom of speech and expression engrafted in Article 19(1)(a) of the Constitution and significantly, the freedom to carry on occupation, trade and business Article 19(1)(g) read with the constitutional right to property under Article 300A, do provide a substantial foundation for a constitutional basis for the freedom to contract . The statutory framework governing contract laws, statutory restrictions on what contracts are lawful, what contracts are void and what considerations are lawful do have significant constitutional moorings. Sections 23 to 30 of the Contract Act reflect constitutional colours, when they declare that agreements in restraint of trade, agreements in restraint of legal proceedings, agreements restraining marriage etc are void. Similarly, this Court has employed constitutional tools from Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us is that a unilateral or panel-based appointment process is invalid under Section 12(5) read with the Seventh Schedule. I will now deal with the case-law on Section 12(5), to examine how this Court has interpreted this provision and the public policy consideration to declare certain kinds of arbitration agreements as being violative of Section 12(5). For the sake of brevity and focus, the principles and main holding of each judgment may be stated as follows: I. First, it is important to note that Section 12(5) of the Act is a mandatory and non-derogable provision, which overrides the arbitration agreement between the parties that prescribes a person who is ineligible to act as an arbitrator. However, the proviso enables parties to waive its applicability through an express agreement in writing between them, subsequent to the dispute. 63 II. In Voestalpine 64 , a division bench of this Court upheld the validity of an arbitration agreement that mandates appointment of arbitrators from a panel maintained by the Delhi Metro Rail Corporation (DMRC). The Court held that a panel comprising serving or retired engineers of government departments or PSUs does not fall foul of the Fifth or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was the case in TRF (supra), he remains incompetent to nominate the arbitrator, which stems from his interest in the outcome of dispute, thereby creating a possibility of bias. 73 The Court held that the ineligibility to appoint is a result of operation of law, as a person who is ineligible to act as an arbitrator must not have an exclusive role in charting the course of dispute resolution by appointing the arbitrator. 74 However, in cases where both parties can nominate an arbitrator of their choice, the advantage to any one party would get counter-balanced. 75 The problems in the reasoning in TRF (supra), i.e., the absence of a statutory source for ineligibility to appoint, and justifiable doubts regarding the nominated arbitrator s independence and impartiality to warrant a court appointment de hors the agreement, are not addressed even in Perkins (supra). V. A three-judge bench in CORE 76 interpreted the arbitration clause 64(3)(b) of the GCC in railway contracts, which provides for appointment of a three-member arbitral tribunal from a panel of retired officers maintained by the Railways. The General Manager, Railways would send a list of at least four names, from which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ours in various cases. The following principles can be culled out from the judgments: I. In HRD v. GAIL (supra), this Court held that a broad commonsensical approach must be adopted while interpreting the entries of the Schedules, such that they are not unduly enlarged or restricted. 82 It rejected the submission that an expansive view must be taken to remove even the remotest likelihood of bias since the grounds for challenge of an award have been narrowed after the 2015 Amendment. 83 Rather, it held that since the entries in these Schedules are based on the Red and Orange Lists of the IBA Guidelines, they must be interpreted as per the principles contained in these Guidelines. The standard to be adopted is that a reasonable third person who has knowledge of the relevant facts and circumstances would conclude that there is a likelihood of the arbitrator being influenced by factors other than the merits of the dispute. 84 II. In Jaipur Zila Dugdh Utpadak Sahkari Sangh v. Ajay Sales Suppliers 85 and in Ellora Paper Mills v. State of M.P. 86 , this Court has held that the purpose of Section 12(5) and the Seventh Schedule is to ensure the neutrality, independence, and impartiality of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvention90 (Article V(1)(d)) permits refusal of award recognition if the tribunal's composition deviates from party agreement, underscoring the primacy of party autonomy. The UNCITRAL Model Law also upholds party autonomy as a core principle in tribunal composition. Similarly, Section 591 of Federal Arbitration Act of US accords primacy to appointment procedure as agreed to between the parties. The arbitration agreement must be in accordance with Section 2 which requires the same to be, valid, irrevocable, and enforceable, save upon such grounds as exists at law or in equity for the revocation of any contract. This has been used by US courts to source unconscionability as a ground to test the validity of an arbitration agreement. 92 43. Article 2 of Geneva Protocol on Arbitration Clauses93 provides that the constitution of arbitral tribunal, shall be governed by the will of the parties and by the law of the country in whose territory the arbitration takes place. Article 1028 of Code of Civil Procedure, Netherlands provides that in case the arbitration agreement gives one of the parties to the dispute a privileged position in appointing arbitrators, then, the other party may, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts decisions97, has upheld an arbitration agreement where one party provides a list of potential arbitrators from which the other party must choose an arbitrator. 48. However, at the same time, there are pronouncements which frown upon unilaterality in matters of appointment of arbitrator/arbitral tribunal. For instance, in one Swiss decision98, it has been held: The Federal Tribunal has developed principles, under which conditions an arbitral tribunal sufficiently safeguards impartial and independent adjudication. The most important of these principles .is that no party may have a preponderant influence on the appointment of the tribunal. (emphasis supplied) 49. American Courts have also dealt with this issue. Despite there being no express statutory proscription against unilaterality in matters of appointment, in one of its decisions, the Massachusetts District Court remarked that both the parties to a dispute must have an equal right to participate in the appointment process. 99 Similarly, in another case, 100 the Supreme Court of Alabama invalidated an arbitration agreement as being unconscionable for the reason that it excluded one party from the appointment process. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because the arbitrator was selected from a list of potential arbitrators curated by one of the parties to the dispute. In doing so, the court observed that, Although an arbitration agreement will not be invalidated for failure to replicate the judicial forum , we again refuse to enforce an agreement so utterly lacking in the rudiments of even- handedness. This line of reasoning continues in McMullen v. Meijer, Inc. 103 where the agreement granted one party unilateral control over the pool of potential arbitrators. There, the court noted that, when the process used to select the arbitrator is fundamentally unfair, as in this case, the arbitral forum is not an effective substitute for a judicial forum, and there is no need to present separate evidence of bias or corruption. 51. The importance of composition of a just and proper arbitral tribunal was also highlighted by the Supreme Court of West Virginia in Board of Education of Berkley County v. W. Harley Miller, Inc. 104 There, the disputes were to be settled pursuant to a standard arbitration provision contained in the construction contract with the Board which provided that disputes shall be decided by arbitration in accordance wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to act judicially. In this case, we are concerned with the former and not about the duty of the arbitrator. 54.2 Holding that an arbitral tribunal has the trappings of a court as it determines the competing rights and liabilities of parties through an adjudicatory process , and therefore it must act judicially has the problems of introducing public law principles in contractual dispute resolution. This formulation has engendered the application of principles of procedural equality, equal treatment under Article 14, fairness, non- arbitrariness, justice, reasonableness, impartiality and bias, all of which have been subsequently invoked in the judgment as core values. I tried to locate the obligations of contracting parties to the arbitration agreement within the province of contract law and public policy considerations therein. This approach, I believe, is better suited for the determination of disputes in arbitration law, as it balances and protects the twin values of party autonomy through judicial restraint, and the duty the parties to constitute an independent arbitral tribunal without compromising any one in favour of the other. 54.3 There is a certain difficulty in invoking S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orking of arbitral remedies. Particularly for institutions involving multiple transactions such as insurance claims, credit card defaults, etc. involving large number of cases but each claim may be of small sum. Our declaration of law substantially covers domestic arbitration, it will not be confined to high and international commercial arbitration. There could also be situations where the unilateral constitution of the panel of arbitrators could have credible members with respect to which no one can have an objection. Rather than declaring that all such agreements are void, it would be better to strengthen the remedial mechanisms available under the Act. This way, the choice of the parties is not completely ignored, and impartiality and independence of the arbitral tribunal is also ensured through close scrutiny by courts on a case-to-case basis. In any event, as indicated earlier, the enquiry about the arbitration clause will be at the stage of Section 11. 55. I consider it necessary to note that mere existence of some relationship with the appointing authority does not inherently undermine autonomy. For instance, senior officers always serve as appellate authorities, and their o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itration agreement. IV. If an arbitration agreement is considered by the court as not enabling constitution of an independent and impartial tribunal, any submission that the said agreement is a binding contract, or it is in exercise of party autonomy is not tenable as such an agreement will be against public policy and as such not an enforceable contract. V. In view of the statutory incorporation of these duties, it is not necessary to apply public law principles evolved in constitutional and administrative laws. Sourcing these duty obligations from Contract Act and Arbitration Act is important to maintain the integrity of the party autonomy and restraint of judicial institutions. VI. The power to ensure that the arbitration agreement is compliant of the public policy requirement of establishing an independent and impartial tribunal is always of the Court. This principle is recognised and statutorily incorporated in the Contract Act and the Arbitration Act. It is the duty of the court to ensure that the arbitration agreement inspires confidence and it will enable establishment of an independent and impartial arbitral tribunal. VII. Neither public policy considerations under the Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dependent on) one party, even if this is what the parties agreed. The Commission hastens to add that Mr. PK Malhotra, the ex officio member of the Law Commission suggested having an exception for the State, and allow State parties to appoint employee arbitrators. The Commission is of the opinion that, on this issue, there cannot be any distinction between State and non-State parties. The concept of party autonomy cannot be stretched to a point where it negates the very basis of having impartial and independent adjudicators for resolution of disputes. In fact, when the party appointing an adjudicator is the State, the duty to appoint an impartial and independent adjudicator is that much more onerous and the right to natural justice cannot be said to have been waived only on the basis of a prior agreement between the parties at the time of the contract and before arising of the disputes. ] 3 2015 amendment 4 Section 12(5), Arbitration Act. [It reads: (5) Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnals to the international business community, in order to create healthy arbitration environment and conducive arbitration culture in this country. Further, as highlighted by the Law Commission also in its report, duty becomes more onerous in government contracts, where one of the parties to the dispute is the Government or public sector undertaking itself and the authority to appoint the arbitrator rests with it. In the instant case also, though choice is given by DMRC to the opposite party but it is limited to choose an arbitrator from the panel prepared by DMRC. It, therefore, becomes imperative to have a much broadbased panel, so that there is no misapprehension that principle of impartiality and independence would be discarded at any stage of the proceedings, specially at the stage of constitution of the Arbitral Tribunal. We, therefore, direct that DMRC shall prepare a broadbased panel on the aforesaid lines, within a period of two months from today. ] 10 [2017] 7 SCR 409 11 As applied by this Court in Pratapchand Nopaji v. Kotrike Venkata Setty, (1975) 2 SCC 208 [9] 12 [2019] 17 SCR 275 13 Perkins (supra) [16] 14 [2019] 16 SCR 1234 [ CORE ] 15 2021 SCC OnLine SC 271. 16 Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn (supra) 2971; Emmanuel Gaillard, Legal Theory of International Arbitration (Brill, 2010) 55 27 Cox and Kings Ltd v. SAP India Pvt Ltd, 2023 INSC 1051 [60] 28 Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2016) 4 SCC 126 [5] 29 Centrotrade Minerals Metals Inc v. Hindustan Copper Ltd., (2017) 2 SCC 228 [38] 30 Section 5, Arbitration Act. [It reads: 5. Extent of judicial intervention Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. ] 31 Sections 3, 11(1), 14(2), 15(3), 15(4), 20(3), 21, 23(3), 24(1), 26, 29(1), 31(7a), 33(4), Arbitration Act 32 Sections 11(3), 11(5), 13(2), 19(3), 20(2), 22(2), Arbitration Act 33 Sections, 11(2), 13(1), 19(2), 20(1), 22(1), Arbitration Act 34 Section 34(2)(a)(v), Arbitration Act 35 Section 11(6), Arbitration Act 36 N S Nayak and Sons v. State of Goa, (2003) 6 SCC 56 [14]; Sree Kamatchi Amman Constructions v. Railways, (2010) 8 SCC 767 [19] 37 Section 19, Arbitration Act 38 Section 20, Arbitration Act 39 Section 21, Arbitration Act 40 Section 22, Arbitration Act 41 Section 24, Arbitration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Working Group was of the view that this should, for the sake of emphasis, be expressed in the individual provision, despite the general listing in article 3. Fifthly, it is suggested that, in addition to the provisions already decided to be non- mandatory and drafted accordingly, [ ] there are only few further provisions which may be regarded as non- mandatory and, if so, could be easily marked as such by adding the words unless otherwise agreed by the parties; ] 57 Holtzmann and Neuhaus (supra) 198 58 Section 34(2)(a)(v), Arbitration Act. [It reads: (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or failing, such agreement, was not in accordance with this Part. ] 59 Report of the United Nations Commission on International Trade Law on the work of its eighteenth session (3-21 June 1985) Supplement No. 17 (A/40/17) [290]. [The report states: 290. As regards the standards set forth in the subparagraph, it was understood that priority was accorded to the agreement of the parties. However, where the agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1807 69 Fouchard, Gaillard and Goldman on International Commercial Arbitration (Emmanuel Gaillard and John Savage, eds. 1999) 453. 70 Article 2, Protocol on Arbitration Clauses signed on 24 September 1923 71 A/CN.9/233 [17] 72 ibid 73 Shahla Ali and Odysseas G Repousis, Appointment of Arbitrators in UNCITRAL Model Law on International Commercial Arbitration (Ilian Bantekas, et al eds, 2020) 74 Gary Born, International Commercial Arbitration (3 rd edn.,) 1783; Also see Michael Pryles, Limits to Party Autonomy in Arbitral Procedure (2007) 24(3) Journal of International Arbitration 327-339. 75 Section 12, Arbitration Act. [It reads: (1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances, (a) such as the existence either direct or indirect, of any past or present relationship with or interest in any of the parties or in relation to the subject-matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality; and (b) which are likely to affect his ability to devote sufficient time to the arbitration and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India v. Singh Builders Syndicate, (2009) 4 SCC 523 [25]. [ 25. We find that a provision for serving officers of one party being appointed as arbitrator(s) brings out considerable resistance from the other party, when disputes arise. Having regard to the emphasis on independence and impartiality in the new Act, Government, statutory authorities and government companies should think of phasing out arbitration clauses providing for serving officers and encourage professionalism in arbitration. ]; See North Eastern Railway v. Tripple Engg. Works, (2014) 9 SCC 288 [8]; Union of India v. UP State Bridge Corporation Ltd., (2015) 2 SCC 52 [20] [ 20. Therefore, where the Government assumes the authority and power to itself, in one-sided arbitration clause, to appoint the arbitrators in the case of disputes, it should be more vigilant and more responsible in choosing the arbitrators who are in a position to conduct the arbitral proceedings in an efficient manner, without compromising with their other duties. Time has come when the appointing authorities have to take call on such aspects failing which (as in the instant case), Courts are not powerless to remedy such situations by springing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itrator, there is no question of challenge to such arbitrator, before such arbitrator. In such a case i.e. a case which falls under Section 12(5), Section 14(1)(a) of the Act gets attracted inasmuch as the arbitrator becomes, as a matter of law (i.e. de jure), unable to perform his functions under Section 12(5), being ineligible to be appointed as an arbitrator. This being so, his mandate automatically terminates, and he shall then be substituted by another arbitrator under Section 14(1) itself. ] 84 A/CN.9/264, page 30 85 Ibid. 86 Report of the Secretary-General: possible features of a model law on international commercial arbitration, A/CN.9/207, [65]. 87 Holtzmann and Neuhaus (supra) 388 88 A/CN.9/264, page 31. [It reads: 4. Paragraph (2), like article 10(1) of the UNCITRAL Arbitration Rules, adopts a general formula for the grounds on which an arbitrator may be challenged. This seems preferable to listing all possible connections and other relevant situations. As indicated by the word only , the grounds for challenge referred to here are exhaustive. Although reliance on any specific reason listed in a national law (often applicable to judges and arbitrators alike) is precluded, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 551 97 K K Saksena v. International Commission on Irrigation Drainage, (2015) 4 SCC 670 [43] 98 Jody Freeman, The Contracting State (2000) 28(1) Florida State University Law Review 155 99 Subodh Kumar Singh Rathour v. Chief Executive Officer, 2024 SCC OnLine SC 1682 100 Stavros Brekoulakis and Margaret Devaney, Public-private arbitration and the public interest under English law (2017) 80(1) Modern Law Review 22, 30. 101 (2019) 8 SCC 112 102 CPC 103 Pam Developments Pvt Ltd (supra) [27-28] [ 28. Section 36 of the Arbitration Act also does not provide for any special treatment to the Government while dealing with grant of stay in an application under proceedings of Section 34 of the Arbitration Act. Keeping the aforesaid in consideration and also the provisions of Section 18 providing for equal treatment of parties, it would, in our view, make it clear that there is no exceptional treatment to be given to the Government while considering the application for stay under Section 36 filed by the Government in proceedings under Section 34 of the Arbitration Act. ] 104 Province of Bombay v. Khushaldas Advani, 1950 SCC 551. [Justice S R Das (as the learned Chief Justice then was) observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and tribunals exercising quasi-judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law.] 121 Associate Builders v. DDA, (2015) 3 SCC 49 [30]; Srei Infrastructure Finance Ltd. v. Tuff Drilling (P) Ltd., (2018) 11 SCC 470 [16]; 122 (2020) 10 SCC 1 [121] 123 Mustill and Boyd (supra) 58 124 Ilias Bantekas, Equal treatment of parties in International Commercial Arbitration (2020) 69(4) International Comparative Law Quarterly 991, 992. 125 Fouchard Gaillard Goldman on International Commercial Arbitration (Kluwer Law International, 1999) 465 126 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Sastri, (1954) 2 SCC 497 [6] 134 (2010) 11 SCC 1 [102] 135 Jerry L Mashaw, The Supreme Court s Due Process Calculus for Administrative Adjudication in Mathews v Eldridge: Three Factors in Search of a Theory of Value (1976) 44(28) University of Chicago Law Review 29, 52. [Professor Mashaw states that insofar as adjudicatory procedure is perceived to be adversarial and dispute resolving, the degree to which procedures facilitate equal opportunities for the adversaries to influence the decision may be the most important criterion by which fairness is evaluated. ] 136 William B Rubenstein, The Concept of Equality in Civil Procedure (2001-2002) 23 Cardozo Law Review 1865, 1890. 137 William Lucy, The Possibility of Impartiality (2005) 25(1) Oxford Journal of Legal Studies 3, 11 138 Ibid, at 22. 139 Lon Fueller, The Forms and Limits of Adjudication (1978) 92(2) Harvard Law Review 353, 364. [Professor Fueller states: whole analysis will derive from one simple proposition, namely, that the distinguishing characteristic of adjudication lies in the fact that it confers on the affected party a peculiar form of participation in the decision, that of presenting proofs and reasoned arguments fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harma, (1996) 3 SCC 364 [29] 159 S L Kapoor v. Jagmohan, (1980) 4 SCC 379 [24] 160 Dharampal Satyapal Ltd. v. CCE, (2015) 8 SCC 519 [26] 161 2023 SCC OnLine SC 366 [53] 162 (1969) 2 SCC 262 163 A K Kraipak (supra) [15]. [15. [ ] But then the very fact that he was a member of the selection board must have had its own impact on the decision of the selection board. Further admittedly he participated in the deliberations of the selection board when the claims of his rivals particularly that of Basu was considered. He was also party to the preparation of the list of selected candidates in order of preference. At every stage of his participation in the deliberations of the selection board there was a conflict between his interest and duty. Under those circumstances it is difficult to believe that he could have been impartial. The real question is not whether he was biased. It is difficult to prove the state of mind of a person. Therefore what we have to see is whether there is reasonable ground for believing that he was likely to have been biased. We agree with the learned Attorney General that a mere suspicion of bias is not sufficient. There must be a reasonable likelihood of bias. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maxim that no man is to be a judge in his own cause should be held sacred. And that is not confined to a cause in which he is a party, but applies to a cause in which he has an interest. ] 176 [1999] UKHL 1 177 AI 178 AICL 179 In re Pinochet (supra) [Lord Browne-Wilkinson held: My Lords, in my judgment, although the cases have all dealt with automatic disqualification on the grounds of pecuniary interest, there is no good reason in principle for so limiting automatic disqualification. The rationale of the whole rule is that a man cannot be a judge in his own cause. In civil litigation the matters in issue will normally have an economic impact; therefore a judge is automatically disqualified if he stands to make a financial gain as a consequence of his own decision of the case. But if, as in the present case, the matter at issue does not relate to money or economic advantage but is concerned with the promotion of the cause, the rationale disqualifying a judge applies just as much if the judge's decision will lead to the promotion of a cause in which the judge is involved together with one of the parties. Thus in my opinion if Lord Hoffmann had been a member of AI he would have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nesses. She will not shrink from the conclusion, if it can be justified objectively, that things that they have said or done or associations that they have formed may make it difficult for them to judge the case before them impartially. 3. Then there is the attribute that the observer is informed . It makes the point that, before she takes a balanced approach to any information she is given, she will take the trouble to inform herself on all matters that are relevant. She is the sort of person who takes the trouble to read the text of an article as well as the headlines. She is able to put whatever she has read or seen into its overall social, political or geographical context. She is fair-minded, so she will appreciate that the context forms an important part of the material which she must consider before passing judgment. ] 191 [2020] UKSC 48 [52] 192 UK Arbitration Act, 1996. [It reads: 33. General duty of the tribunal (1) The tribunal shall (a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and (b) adopt procedures suitable to the circumstances of the particular case, avoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served: 16. The tests of real likelihood and reasonable suspicion are really inconsistent with each other. We think that the reviewing authority must make a determination on the basis of the whole evidence before it, whether a reasonable man would in the circumstances infer that there is real likelihood of bias. The Court must look at the impression which other people have. This follows from the principle that justice must not only be done but seen to be done. If right minded persons would think that there is real likelihood of bias on the part of an inquiring officer, he must not conduct the enquiry; nevertheless, there must be a real likelihood of bias. Surmise or conjecture would not be enough. There must exist circumstances from which reasonable men would think it probable or likely that the inquiring officer will be prejudiced against the delinquent. The Court will not inquire whether he was really prejudiced. If a reasonable man would think on the basis of the existing circumstances that he is likely to be prejudiced, that is sufficient to quash the decision. ] 207 (2001) 1 SCC 182 208 Kumaon Mandal Vikas Nigam (supra) [35] [ 35. The test, therefore, is as to whether a mere a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of both objective and subjective impartiality. ] 217 Jivraj v. Hashwani, [2011] UKSC 40 [45] 218 Redfern and Hunter (supra) 226 219 Article 3, IBA Rules of Ethics for International Arbitrator 1987 220 Peter Binder (supra) 117 221 Gary Born (supra) 1911, 1912. [Gary Born suggests that: Statutory (and judicial) references to the risks or possibility of partiality are preferable to formulations including doubt or suspicion. The latter phrases connote a subjective inquiry, as well as a flavor of speculation, which are misleading. The better approach is instead to consider what objective risk (or possibility) of unacceptable partiality exists. ] 222 David Caron and Lee Caplan, The UNCITRAL Arbitration Rules: A Commentary (2 nd edn, Oxford University Press, 2013) 208 223 Garn Born (supra) 1912 224 ICA 225 G F Toll Road (supra) [23] 226 HRD Corporation v. GAIL (India) Ltd., (2018) 12 SCC 471 [12] 227 Supreme Court Advocates-on-Record Association (supra) [30] 228 State of Punjab v. Davinder Pal Singh Bhullar, (2011) 14 SCC 770 [41] 229 Explanation 3 For the removal of doubts, it is clarified that it may be the practice in certain specific kinds of arbitration, such as maritime or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to obtain an unfair advantage over the other. (2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another (a) where he hold a real or apparent authority over the other or where he stands in a fiduciary relation to the other; or (b) where he makes a contract with a person whose mental capacity is temporarily or permanently affect by reason of age, illness, or mental or bodily distress. (3) Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other. Nothing in this sub-section shall affect the provision of Section 111 of the Indian Evidence Act, 1871 (I of 1872). ] 250 Section 19A, Contract Act. 251 Percy H Winfield, Public Policy in the English Common Law (1928) 42(1) Harvard Law Review 76, 92. 252 Stephen Waddams, Principle and Policy in Contract Law (Cambridge University Press, 2011) 152. 253 Ibid, at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Deterring a party to an arbitration from invoking this alternative dispute resolution process by a pre-deposit of 10 per cent would discourage arbitration, contrary to the object of de-clogging the court system, and would render the arbitral process ineffective and expensive. ] 271 Lombardi (supra) [80] 272 Lombardi (supra) [83] [ 83. The concept of party autonomy as pressed into service by the respondent cannot be stretched to an extent where it violates the fundamental rights under the Constitution. For an arbitration clause to be legally binding it has to be in consonance with the operation of law which includes the Grundnorm i.e. the Constitution. It is the rule of law which is supreme and forms parts of the basic structure. The argument canvassed on behalf of the respondent that the petitioner having consented to the pre-deposit clause at the time of execution of the agreement, cannot turn around and tell the Court in a Section 11(6) petition that the same is arbitrary and falling foul of Article 14 of the Constitution is without any merit. ] 273 Section 2, Federal Arbitration Act. [It reads: A written provision in any maritime transaction or a contract evidencing a transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Inc. (supra) [36]. [36. The well-recognised examples of non-arbitrable disputes are: (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding-up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes.] 291 Redfern and Hunter (supra) 552 292 Peter Binder (supra) 274 293 Ssangyong Engg. Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 [34]; NHAI v. P Nagaraju, (2022) 15 SCC 1 [39] 294 MMTC v. Vedanta Ltd., (2019) 4 SCC 163 [11]; 295 2024 SCC OnLine SC 2600 296 (2024) 7 SCC 197 [34] 297 Redfern and Hunter (supra) 58 298 Ibid. 299 Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1 [70] [ 70. Arbitrators, like the courts, are equally bound to resolve and decide disputes in accordance with the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ihar, (1999) 9 SCC 620 [112] 306 Sarwan Kumar v. Madan Lal Aggarwal, (2003) 4 SCC 147 [15] 307 2024 SCC OnLine SC 1974 308 (2012) 9 SCC 552 309 (2002) 4 SCC 105 JUSTICE HRISHIKESH ROY FOOTNOTES 1 Gary Born, International Commercial Arbitration (2nd edn, Kluwer 2014) 2 UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration 3 Howard M. Holtzmann and Joseph E. Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration, at 479 (Kluwer 1989) 4 (2019) 8 SCC 714 5 (2017) 9 SCC 729 6 (2005) 8 SCC 618 7 (2009) 1 SCC 267 8 (2016) 10 SCC 386 9 (2024) 6 SCC 1 10 Executive Engineer, Irrigation Division, Puri v. Gangaram Chhapolia, [1984] 3 SCC 627; Secretary to Government Transport Department, Madras v. Munusamy Mudaliar, [1988] (Supp) SCC 651; International Authority of India v. K.D. Bali and Anr, [1988] 2 SCC 360 11 HRD Corporation (Marcus Oil and Chemical Division) v. GAIL (India) Ltd., (2018) 12 SCC 471 12 2017) 4 SCC 665 13 (2017) 8 SCC 377 14 (2020) 20 SCC 760 15 (2020) 14 SCC 712 16 (2019) 15 SCC 682 17 (2020) 2 SCC 464 JUSTICE PAMIDIGHANTAM SRI NARASIMHAF FOOTNOTES 1 Hereinafter the Act or Arbitration Act . 2 Hereinafter the Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thinam v. Union of India, (1994) 3 SCC 394, para 93. 47 (1986) 3 SCC 156 48 Brojo Nath Ganguly (supra), paras 89, 92-93. 49 ibid, para 89. 50 S.K. Jain v. State of Haryana, (2009) 4 SCC 357, para 8; ICOMM Tele Limited v. Punjab State Water Supply and Sewerage Board, (2019) 4 SCC 401, paras 13-14. 51 HRD Corporation (Marcus Oil and Chemical Division) v. GAIL (India) Ltd., (2018) 12 SCC 471, paras 11-12; Chennai Metro Rail Ltd v. Transtonnelstroy Afcons (JV), (2024) 6 SCC 211, para 25. 52 Bharat Broadband Network Limited v. United Telecoms Limited, (2019) 5 SCC 755. 53 ibid, paras 15-17; HRD Corporation (supra), paras 11-12; Chennai Metro Rail (supra), para 26. 54 ibid. 55 Chennai Metro Rail (supra), paras 29-33. 56 HRD (supra), para 17. 57 Indian Oil Corporation v. Raja Transport Pvt Ltd, (2009) 8 SCC 520, para 45; North Eastern Railway v. Tripple Engineering Works, (2014) 9 SCC 288, paras 5-8. 58 Northern Railway Administration, Ministry of Railway, New Delhi v. Patel Engineering Company, (2008) 10 SCC 240, paras 12-14; North Eastern Railway (supra), paras 5-8. 59 Indian Oil Corporation (supra), para 45. Also see Ace Pipeline Contracts (P) Ltd. v. Bharat Petroleum Corpn. Ltd., (200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de for a method of naming or appointing an arbitrator or arbitrators or an umpire, such method shall be followed; but if no method be provided therein, or if a method be provided and any party thereto shall fail to avail himself of such method, or if for any other reason there shall be a lapse in the naming of an arbitrator or arbitrators or umpire, or in filling a vacancy, then upon the application of either party to the controversy the court shall designate and appoint an arbitrator or arbitrators or umpire, as the case may require, who shall act under the said agreement with the same force and effect as if he or they had been specifically named therein; and unless otherwise provided in the agreement the arbitration shall be by a single arbitrator. 92 Perry v. Thomas, 482 US 483 (1987); Harold Allen s Mobile Home Factory Outlet, Inc. v. Butler, 825 So.2d 779,783-85 (Ala. 2002) 93 Geneva Protocol on Arbitration Clauses, Sept. 24, 1923, 27 L.N.T.S. 158. 94 Born (supra), 1878. 95 Judgement of 26 November 2002, DFT 4P_129/2002. 96 Philipp Bros. v. Icco, 1990 Rev. 880,883; Raffineries de Petrole d Homs et de Banias v. Chambre de Commerce Internationale, 1985 Recv. Arb. 141,146 97 Judg ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
