Arbitrator neutrality bars party officers from continuing without an express post-dispute written waiver, requiring an independent replacement.

Arbitrators who are officers of a disputing party are ineligible under Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996, where no valid post-dispute written waiver exists. The notes explain that the provision secures arbitral neutrality, independence and impartiality despite prior contractual arrangements. Even where the tribunal was constituted before the 2015 amendment, prolonged inactivity and the absence of substantive arbitral steps may leave the statutory ineligibility applicable. An ineligible party officer is de jure unable to act, and participation or conduct cannot amount to waiver; an express written agreement after the dispute arises is required. The tribunal's mandate consequently terminates by law, requiring appointment of an independent arbitrator.

---

---

Issues: Whether an arbitral tribunal comprising officers of one disputing party became ineligible and lost its mandate under Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996, requiring appointment of a fresh arbitrator.

Analysis: Although the tribunal had been constituted before the 2015 amendment, no substantive arbitral steps were taken after its constitution and the proceedings had remained stayed for a substantial period. Section 12(5), read with the Seventh Schedule, ensures neutrality, independence and impartiality of arbitrators by rendering a person having a prohibited relationship with a party ineligible notwithstanding a prior contractual arrangement. An officer of the respondent-State falling within the prescribed category is de jure incapable of acting as arbitrator. Such ineligibility can be waived only through an express written agreement made after disputes arise; participation or conduct does not constitute that waiver.

Conclusion: The respondent-State's officer-members were ineligible to continue as arbitrators, their mandate stood terminated by operation of law, and a fresh independent arbitrator was required to be appointed.

---