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Arbitration promises a fair, impartial, and efficient resolution of disputes. But what if one party believes that the appointed arbitrator is biased or unqualified?

The Arbitration and Conciliation Act, 1996, as amended by the 2015 and 2019 Amendments, lays down a clear procedure to challenge the appointment of an arbitrator. Here’s a practical guide for legal professionals and businesses alike.

Grounds for Challenge – Section 12(3)

An arbitrator’s appointment can be challenged only if:

• There are justifiable doubts about their independence or impartiality, or
• They lack qualifications agreed upon by the parties.

The Fifth Schedule outlines situations that may raise doubts about impartiality.

The Seventh Schedule lists grounds that render an arbitrator ineligible to be appointed—such as a close relationship with a party or prior legal/business involvement.

Mandatory Disclosure – Section 12(1)

Before appointment, an arbitrator must disclose in writing:

• Any potential conflicts of interest;
• Their ability to complete the arbitration in a timely manner.

Failure to disclose may itself be a ground for challenge.

Challenge Procedure – Section 13

Step 1: File a Written Challenge

• A party must challenge the arbitrator within 15 days of becoming aware of the issue (such as learning about a conflict or the tribunal’s constitution).
• The challenge must include a statement of reasons.

Step 2: Arbitrator’s Decision

• If the arbitrator does not withdraw and the other party disagrees, the tribunal decides on the challenge.

Step 3: If Challenge Fails

• The proceedings continue. The aggrieved party can challenge the final award under Section 34.

De Jure Ineligibility – Section 14

If the arbitrator is disqualified by law (e.g., per the Seventh Schedule), a party can:

Approach the court directly to terminate the mandate—no need to wait for the tribunal’s decision.

Substitution of Arbitrator – Section 15

Once the mandate is terminated, a new arbitrator can be appointed using the original procedure agreed upon by the parties.

Key Case Laws

• TRF Ltd. v. Energo Engg. Projects Ltd.
• Perkins Eastman Architects DPC v. HSCC (India) Ltd.

These judgments have reinforced the importance of impartiality and expanded the grounds for disqualification under the Seventh Schedule.

Conclusion

Challenging an arbitrator is a serious step. While the law protects party autonomy in selecting arbitrators, it equally upholds fairness and neutrality as foundational principles of arbitration. Knowing the procedure can safeguard your interests and ensure confidence in the arbitral process.

Chapter I of Part II of the Arbitration and Conciliation Act, 1996 (Sections 44 to 52) deals with the recognition and enforcement of foreign arbitral awards under the New York Convention (1958) by Indian courts. On the whole, Indian  Courts have a pro-enforcement stand making  India an arbitration-friendly jurisdiction, aligning with global arbitration standards.

Section 44 defines a foreign award as an arbitral award arising from disputes of a commercial nature, made in a country that is a signatory to the New York Convention and notified by the Indian government. As per Section 45, if a party initiates a legal suit despite an arbitration agreement, the court must refer the parties to arbitration, unless the agreement is invalid. Again Section 46 says that a foreign award is considered binding and can be relied upon in any legal proceedings in India.

The Enforcement Procedure of a foreign award is dealt in Sections 47 to 49. As per Section 47 a party seeking enforcement must submit:

1. The original or certified copy of the award.
2. The original or certified arbitration agreement.
3. A certified translation if the award is in a foreign language.

As per Section 48, the Courts may refuse enforcement of a foreign award only on limited grounds, similar to Article V of the New York Convention, including:

1. Lack of proper notice to a party.
2. Incapacity of parties or invalid agreement.
3. Award beyond the scope of arbitration.
4. Violation of natural justice or improper procedure.
5. Award set aside in the country where it was made.
6. Violation of Indian public policy (e.g., fraud, corruption, or fundamental legal principles).

As per Section 49, if no valid objections are raised under Section 48, the award is deemed a decree of an Indian court and is enforceable as a domestic court judgment.

As per Section 50, an appeal can be filed against a court decision refusing enforcement of a foreign award but not against a decision allowing enforcement. Section 52 clarifies that other laws and treaties concerning foreign awards remain unaffected.

There is a trend world over, in particular among companies and corporate not to drag disputes into long drawn courtroom battles. There comes the significance of Arbitration, Mediation, Conciliation and such alternate disputes resolution mechanisms. Here is the added advantage of savings in time as well as the cost of proceedings. Moreover the parties settle the matter in a win- win spirit.

The Arbitration and Conciliation Act, 1996 governs the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards in India. Further it governs the law relating to conciliation. This act has taken into account the UNCITRAL Model Law on International Commercial Arbitration adopted by UN in 1985 and the UNCITRAL Conciliatory Rules (1980).

As per the Arbitration and Conciliation Act, 1996, an arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or it may be a separate agreement. Further an arbitration agreement shall be in writing.

If either of the disputing parties approaches a Court for adjudication of the dispute, in spite of the presence of an arbitration agreement, then the Court has the power to refer the parties to arbitration. The parties to an arbitration proceeding are entitled to approach the jurisdictional court for urgent and interim measures of protection.

The parties are free to determine the number of arbitrators; however the same shall not be an even number. The arbitrator may be a person of any nationality. If there is any justifiable doubt as to the independence or impartiality of an arbitrator, then, he shall not become an arbitrator.

The arbitrational tribunal is also entitled to pass interim measures of protection or to order a party to provide appropriate security. In arbitration proceeding, the parties shall be treated with equality and each party shall be given full opportunity to present his case.

Parties are free to fix the place of arbitration. If there is a disagreement between the parties regarding the place of arbitration, the same shall be decided by the arbitrational tribunal. The proceedings can be conducted in any language as determined by the parties.