Case Note & Summary
The petitioner, Sheetal Maruti Kurundwade, filed a petition under Section 9 and Sections 12(3) and 12(5) of the Arbitration and Conciliation Act, 1996, seeking the removal of the presiding arbitrator, Mr. Snehal K Shah, and the co-arbitrator, Mr. Farhan P Dubash, in an arbitration where the petitioner was the respondent and Metal Power Analytical (I) Pvt Ltd was the claimant. The ground for removal was that the presiding arbitrator, a practicing counsel, received briefs from the law firm M/s Hariani & Co., which represented the claimant in the arbitration. The petitioner argued that this relationship disqualified the arbitrator under Section 12(5) read with Schedule VII item 3 of the Act, which lists relationships that give rise to justifiable doubts as to independence or impartiality. The arbitrator had disclosed that he was briefed by the law firm in other matters but had never acted for the claimant or in the present dispute. The court examined the scope of the amended provisions, particularly Schedule VII item 3, which disqualifies an arbitrator who is a partner or employee of a law firm that has acted for a party. The court held that the provision requires a direct relationship with the party or the dispute; mere receipt of briefs from the same law firm in unrelated matters does not create a disqualification. The court emphasized that the arbitrator's disclosure was adequate and that the petitioner's objection was not sustainable. The petition was dismissed, and the notice of motion was disposed of accordingly.
Headnote
A) Arbitration Law - Arbitrator Disqualification - Section 12(5) read with Schedule VII item 3 of the Arbitration and Conciliation Act, 1996 - Relationship with Party - The court considered whether a counsel acting as arbitrator is disqualified because he receives briefs from a law firm representing a party, even though he never acted for that party or in the dispute. Held that the disqualification under Schedule VII item 3 requires a direct relationship with the party or the dispute; mere receipt of briefs from the same law firm in unrelated matters does not disqualify. (Paras 1-27) B) Arbitration Law - Arbitrator Disclosure - Section 12(1) of the Arbitration and Conciliation Act, 1996 - Duty to Disclose - The court noted that the arbitrator had made a disclosure that he was briefed by the law firm in other matters but not for the party. Held that such disclosure was sufficient and did not warrant removal. (Paras 10-15) C) Arbitration Law - Waiver of Disqualification - Section 12(5) proviso of the Arbitration and Conciliation Act, 1996 - Express Agreement - The court observed that even if there were a disqualification, the parties could waive it by express agreement after the dispute arises. Held that the petitioner had not waived but the disqualification did not exist. (Paras 20-22)
Issue of Consideration
Whether an arbitrator is disqualified under Section 12(5) read with Schedule VII item 3 of the Arbitration and Conciliation Act, 1996, when he is a practicing counsel who receives briefs from a law firm that represents a party to the arbitration, but has never acted for that party or in that dispute.
Final Decision
The petition is dismissed. The notice of motion is disposed of accordingly.
Law Points
- Arbitration
- Arbitrator disqualification
- Section 12(5) Arbitration and Conciliation Act
- 1996
- Schedule VII item 3
- Relationship with party
- Counsel as arbitrator
- Law firm briefs
