Mandatory arbitrator disclosure and ineligibility rules can invalidate a unilateral appointment and set aside the award.

Disclosure of circumstances creating justifiable doubts about an arbitrator's independence under Section 12(1) of the Arbitration and Conciliation Act, 1996 was mandatory, because the statute uses the language "he shall disclose" and the Fifth Schedule factors, including repeated prior appointments by a party, had to be revealed. The text further states that an arbitrator falling within the Seventh Schedule is ineligible under Section 12(5), and that ineligibility can be waived only by an express written agreement after disputes arise. On the stated facts, unilateral appointment without such waiver and without full disclosure vitiated the proceedings, and the award was set aside.

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Issues: (i) Whether disclosure of circumstances giving rise to justifiable doubts as to the arbitrator's independence and impartiality under Section 12(1) of the Arbitration and Conciliation Act, 1996 was mandatory. (ii) Whether the unilateral appointment of the arbitrator, who had been appointed repeatedly by the respondent, rendered the arbitral proceedings and award invalid under Section 12(5) of the Arbitration and Conciliation Act, 1996.

Issue (i): Whether disclosure of circumstances giving rise to justifiable doubts as to the arbitrator's independence and impartiality under Section 12(1) of the Arbitration and Conciliation Act, 1996 was mandatory.

Analysis: The use of the words "he shall disclose" made the obligation under Section 12(1) mandatory. The grounds in the Fifth Schedule, including prior appointments by a party on more than two occasions within the preceding three years, were relevant to assess possible bias and had to be disclosed by the person approached for appointment. The requirement was a safeguard for the integrity of arbitration and was not discretionary.

Conclusion: The disclosure requirement under Section 12(1) was mandatory, and the failure to make such disclosure could not be treated as optional or left to the arbitrator's discretion.

Issue (ii): Whether the unilateral appointment of the arbitrator, who had been appointed repeatedly by the respondent, rendered the arbitral proceedings and award invalid under Section 12(5) of the Arbitration and Conciliation Act, 1996.

Analysis: A person falling within the Seventh Schedule is ineligible to be appointed as an arbitrator, and such ineligibility cannot be waived except by an express agreement in writing after disputes have arisen. Repeated appointments by one party were material to the issue of independence and impartiality. Since the arbitrator had been appointed unilaterally and no express written waiver existed, the appointment was impermissible and the omission to disclose the material circumstances vitiated the proceedings.

Conclusion: The unilateral appointment was impermissible, the arbitrator was ineligible on the facts found, and the arbitral award was liable to be set aside.

Final Conclusion: The appeal succeeded and the order refusing to set aside the award was reversed, with the arbitral award and the impugned order both set aside.

Ratio Decidendi: Mandatory disclosure under Section 12(1) and the prohibition against ineligible or unilaterally appointed arbitrators under Section 12(5) are central safeguards of arbitral neutrality; failure to comply vitiates the proceedings unless there is an express written waiver after disputes arise.

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