Arbitrator ineligibility under the Seventh Schedule automatically ends the mandate unless waived by express written agreement.

Section 12(5) of the Arbitration and Conciliation Act, 1996 makes a person ineligible to act as arbitrator where the relationship falls within the Seventh Schedule, and that ineligibility creates a de jure bar that automatically terminates the mandate. The disqualification cannot be avoided by prior arrangement, continued participation, or the age of the reference; only an express written waiver after disputes arise can cure it. Where the arbitral tribunal consists of officers of a party and no valid written waiver exists, the tribunal is hit by the statutory bar and a fresh arbitrator must be appointed under the Act.

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Issues: Whether the mandate of an arbitral tribunal consisting of officers of a party stood terminated under Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996, and whether a fresh arbitrator was required to be appointed.

Analysis: Section 12(5) introduced a mandatory rule of neutrality by rendering ineligible any person whose relationship with the parties, counsel, or dispute falls within the Seventh Schedule, notwithstanding any prior agreement. The Court applied the settled principle that such ineligibility results in a de jure inability to function as arbitrator and automatically terminates the mandate. It further held that the absence of any express agreement in writing waiving the statutory disqualification meant that participation or the age of the reference could not preserve the tribunal's mandate. The tribunal comprising officers of the respondent was therefore hit by the statutory bar, and the later appointment had to be made afresh under the Act.

Conclusion: The mandate of the existing arbitral tribunal had terminated by operation of law and the appellant was entitled to appointment of a fresh arbitrator.

Ratio Decidendi: A person rendered ineligible under Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996 cannot continue as arbitrator, and the ineligibility can be waived only by an express written agreement after disputes have arisen.

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