TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 1397
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....ll the stated points have not been pressed during the course of arguments. This Court, is called upon to answer the only questions whether the Arbitrator appointed by respondent No. 1 is incapacitated or ineligible to act as an Arbitrator ? Whether disqualification in Seventh ('VII') Schedule, pressed into service by the petitioner would be attracted in the facts of the instant case ? 3. It may be noted that owing to some disputes and differences between the parties, a three member Arbitral Tribunal was constituted comprising of two party - nominated Arbitrators and one Presiding Arbitrator. The tribunal was later reconstituted on account of the sudden demise of the Presiding Arbitrator. While the arbitration proceedings were at the stage of final hearing, one of the nominee Arbitrator for respondent No. 1 had recused himself. In light of the recusal, the reconstituted tribunal by the procedural order dated 11.08.2023 had adjourned the matter sine die with the liberty to get the matter revived on the nominations of the Arbitrator, by respondent No. 1. 4. It is contended that the nomination of the Arbitrator by e-mail dated 16.09.2023 sent by respondent No. 1, falling within the i....
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.... of Section 15 of the Act, 1996, being related to the subject matter of the dispute. 8. Reliance is placed on the decision of the Apex Court in the case of Perkins Eastman Architects DPC and Another versus HSCC (India) Ltd. reported in (2020) 20 SCC 760, to argue that independence and impartiality of the Arbitrator are the hallmark of any arbitration proceedings. Rule against bias is one of the fundamental principles of natural justice which duly applies to all judicial and quasi judicial proceedings. The relationship between the parties to the arbitration and the arbitrators themselves are contractual in nature and the source of an arbitrator's appointment is deduced from the agreement entered into between the parties, but the instance of non-independence and non impartiality of such arbitrator would render him ineligible to conduct the arbitration. The genesis behind this rational is that even when an arbitrator is appointed in terms of contract and by the parties to the contract, he is independent of the parties. Functions and duties require him to rise above the partisan interest of the parties and not to act in, or so as to further, the particular interest of either parties. ....
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....en taken from the IBA Guidelines, which consists of three members. The Red List consisting of non-waivable and waivable guidelines, covers situations which are "more serious" and "serious", the "more serious" objections being non-waivable. The Orange List, on the other hand, is a list of situations that may give rise to doubts as to the arbitrator's impartiality or independence, as a consequence of which the arbitrator has a duty to disclose such situations. The Green List is a list of situations where no actual conflict of interest exists from an objective point of view, as a result of which the arbitrator has no duty of disclosure. These guidelines were first introduced in Part-1 of the Arbitration Act and general standards regarding impartiality, independence and disclosure are set out. As to the guidelines on conflict of interest, it was noted therein that : - "(2) Conflicts of Interest (a) An arbitrator shall decline to accept an appointment or, if the arbitration has already been commenced, refuse to continue to act as an arbitrator, if he or she has any doubt as to his or her ability to be impartial or independent. (b) The same principle applies if facts or circumsta....
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.... avatar. Item No. 16 refers to previous involvement in an advisory or other capacity in the very dispute, but not as arbitrator. It was, thus, held that the providing an expert opinion as occurring in Item No. 15, advice to a party covered, would not include legal advise given as it would include only a situation where Arbitrator had been an Adviser insofar as the source of business of a party to the arbitration. In case of any professional relationship or business relationship between the Arbitrator and one of the party would dis-entitle him to act as an Arbitrator. The legal advice given to the party in any other issue would not be a reason to hold the Arbitrator ineligible. 15. In light of the above, this Court may note that instances incorporated in the Fifth ('V') and Seventh ('VII') Schedule, based on the ground of reasonable likelihood of bias, would render an Arbitrator to be ineligible in a subsequent arbitration related to the same matter. 16. In the instant case, it may be noted, a perusal of the judgment and order passed by the Division Bench of this Court (on record) of which the nominated Arbitrator had been a member, indicates that challenge in the said case was t....