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30 April 2021 | Escort Security and Personnel Services v Deendayal Port Trust | R/Petition No. 130 of 2019 | Bela M Trivedi J
The arbitration clause empowered the Chairman of the respondent party to arbitrate himself or appoint a nominee. It appears that the Chairman made an appointment. Was the appointment bad and hit by Section 12 (5) ACA? The Gujarat High Court has said no because, in its view requesting an appointment under the contract and then consenting to pay the arbitrator’s fee amounts to a waiver of Section 12 (5) ACA.
To recall, Seventh Schedule ACA gives a bucket of prohibited relationships, and Section 12 (5) ACA says that if the Seventh Schedule is attracted, the arbitrator becomes ineligible. But a proviso to the sub-section makes an exception: there is no ineligibility if, after the dispute has arisen, the parties waive the applicability of the Seventh Schedule by an express agreement in writing.
The court gave an additional reason: the challenge should have been made under Section 13 (2) ACA within 15 days of becoming aware of the tribunal’s constitution.
Access the judgment here.
Note: On the interpretation of Section 12 (5) ACA and its proviso, and the applicability of Section 13 to Section 12 (5) ACA, see Supreme Court’s Bharat Broadband Network Ltd. v. United Telecoms Ltd., (2019) 5 SCC 755.