Appointment of Arbitrators - Procedure and Challenges

2.2.1 Overview of Arbitrator Appointment

The appointment of arbitrators is a critical phase in arbitration. The quality, expertise, and impartiality of arbitrators directly impact the fairness and outcome of the proceedings. The Arbitration Act provides a flexible framework allowing party autonomy while ensuring safeguards against bias.

Key Principles

• Party Autonomy: Parties are free to agree on the procedure for appointing arbitrators (Section 11(2))
• Odd Number Preferred: The number of arbitrators should preferably be an odd number to avoid deadlock (Section 10)
• Equal Treatment: Each party must have equal opportunity in the appointment process
• Independence and Impartiality: Arbitrators must be and remain independent and impartial throughout
• Default Mechanism: Where parties fail to agree, the court provides a default appointment mechanism

2.2.2 Qualifications and Disqualifications

General Qualifications (Section 11(1))

No person shall be precluded by reason of nationality from acting as an arbitrator, unless otherwise agreed by parties. However, parties may specify qualifications in their agreement:

• Technical Expertise: Construction disputes may require engineers; IP disputes may require technical experts
• Legal Qualification: Parties may require arbitrators to be advocates or retired judges
• Industry Experience: Maritime, insurance, or commodities arbitration may need industry practitioners
• Language Proficiency: International arbitrations may require fluency in specific languages

Fifth Schedule - Grounds for Ineligibility

The Fifth Schedule (added by 2015 Amendment) lists relationships that create justifiable doubts about independence:

Seventh Schedule - Categories Ineligible for Appointment

Persons falling under the Seventh Schedule are ineligible unless parties waive by agreement subsequent to disputes having arisen:

• Employee, consultant, advisor, or has any other past or present business relationship with a party
• Has a significant financial or personal interest in the matter in dispute
• Has a relationship with party's counsel (same law firm, etc.)
• Is a manager, director, or part of the management of an entity that is a party

2.2.3 Appointment Procedure

Party-Agreed Procedure (Section 11(2))

Parties are free to agree on any procedure for appointment. Common agreed procedures include:

1. Mutual Agreement: Both parties jointly select a sole arbitrator
2. Party-Appointed with Presiding: Each party appoints one, and the two appoint the presiding arbitrator
3. Institutional Appointment: Parties designate an institution to make the appointment
4. List Procedure: Institution provides list, parties strike names, highest-ranked remaining person appointed

Default Procedure (Section 11(3)-(6))

Where parties fail to agree or the agreed procedure fails:

For Sole Arbitrator

If parties fail to agree on the sole arbitrator within 30 days from a party's request, either party may apply to the Supreme Court (international) or High Court (domestic) or any person designated by them.

For Three Arbitrators

1. Each party appoints one arbitrator within 30 days of request from the other party
2. The two appointed arbitrators appoint the third (presiding) arbitrator within 30 days
3. If a party fails to appoint within 30 days, or the two arbitrators fail to agree on the third, the appointment shall be made by the court or designated institution

Section 11(6A) - Limited Court Examination

The court, while considering an application under Section 11, shall confine its examination to:

• Existence of a valid arbitration agreement
• Whether the dispute is capable of being arbitrated
• Whether the party making the application has approached the court with clean hands

2.2.4 Disclosure Obligations

Section 12 - Duty to Disclose

A proposed arbitrator must disclose in writing any circumstances likely to give rise to justifiable doubts as to independence or impartiality.

Timing of Disclosure

• Before Appointment: At the time of approach for potential appointment
• After Appointment: If circumstances arise during proceedings that create doubts
• Ongoing Duty: Disclosure is a continuing obligation throughout the arbitration

Sixth Schedule - Disclosure Categories

The Sixth Schedule provides categories of relationships that must be disclosed:

• Previous services for or against a party or their affiliates
• Current services for a party in unrelated matters
• Same law firm as party's counsel
• Has publicly advocated a position on the case
• Social or professional relationships with party or counsel
• Share ownership or business interest in a party
• Previously involved in the subject matter of dispute

2.2.5 Challenge Procedure

Grounds for Challenge (Section 12)

An arbitrator may be challenged only if:

• Circumstances exist that give rise to justifiable doubts as to independence or impartiality
• The arbitrator does not possess qualifications agreed by the parties
• The arbitrator falls under Seventh Schedule categories (unless waived)

Challenge Procedure (Section 13)

1. Party-Agreed Procedure: Parties may agree on the challenge procedure
2. Default Procedure: Written challenge to the tribunal within 15 days of becoming aware of grounds
3. Arbitrator's Response: The challenged arbitrator may withdraw, or other party may agree to the challenge
4. Tribunal Decision: If no withdrawal or agreement, the tribunal (including the challenged arbitrator) decides
5. Court Appeal: If challenge unsuccessful, aggrieved party may apply to court within 30 days (but arbitration can continue)

Termination of Mandate (Section 14 & 15)

An arbitrator's mandate terminates if:

• The arbitrator becomes de jure or de facto unable to perform functions
• The arbitrator withdraws from office
• The parties agree to terminate the mandate
• Court order on application by a party