Document Fragment View
Fragment Information
Showing contexts for: arbitration section 12 in Au Small Finance Bank Ltd. ... vs . on 22 August, 2023Matching Fragments
which under Section 11 of The Act where a fresh Arbitrator was appointed. When the High Court's order was challenged before the Supreme Court with a plea that the Arbitration Clause pre-existed the 2015 Amendment of The Act and inclusion of Section 12(5) and Schedule 7 Hon'ble Supreme Court while dismissing the petition challenging the High Court order ruled that, "So far as the submission on behalf of the petitioners that the agreement was prior to the insertion of Sub-Section 5 of Section 12 read with 7th Schedule to the Act and therefore the disqualification under Sub-Section 5 of Section 12 read with 7th Schedule to the Act shall not be applicable and that once an arbitrator-Chairman started the arbitration proceedings thereafter the High Court is not justified in appointing an Arbitrator are concerned the aforesaid has no substance and can to be accepted in view of the decision of this Court in TRF Limited Judgment(supra), Bharat Broadband Network Judgment(supra), Voestalpine Schienen Judgment (supra). In the aforesaid decisions this Court had an occasion to consider in detail the object and purpose of insertion of Sub-Section 5 of Section 12 read with 7 th Schedule to the Act. In the case of Voestalpine Schienen Judgment(supra) it is observed and held by this Court that the main purpose for amending the provision was to provide for 'Neutrality of Arbitrators'. It is further observed that in order to achieve this, Sub-section 5 of Section 12 lays down that notwithstanding any prior agreement to the contrary, any person whose relationship with the parties or counsel or the subject-matter of the dispute falls under any of the categories specified in the 7 th Schedule, he shall be ineligible to be appointed as an arbitrator. It is further observed that in such an eventuality i.e. when the arbitration clause finds foul with the amended provisions (Sub-Section 5) of Section 12 read with 7 th Schedule the appointment of an Arbitrator would be beyond pale of the arbitration agreement, empowering the Court to appoint such arbitrator as may be permissible. It is further observed that , that would be the effect of non- obstante clause contained in Sub-Section5 of Section 12 and the other party cannot insist on appointment of the arbitrator in terms of the arbitration agreement..........
(Emphasis Supplied)
33. In case title M/s Fam Bhagat Infratech Private Limited Vs. Alok Kumar Agarwal22, Hon'ble High Court while dealing with the challenge to Arbitral Clause which provided that 'Unilateral Appointment of Arbitrator' ruled, "Clearly, in view of the law laid down by the Supreme Court in Perkins Eastman and Bharat Broadband as well as Section 12(5) of the Arbitration and Conciliation Act, 1996, read with the 7 th Schedule thereto, Clause 9.1 is rendered unsustainable in law, as it confers exclusive jurisdiction to one of the parties to the arbitration agreement to appoint the arbitrator.
35. The celebrated judgments of TRF Limited, Perkins Eastman Hon'ble Supreme Court have been relied by other High Courts as well.
36. In case title Ravi Realcons Pvt. Ltd. Vs. Chief Engineer and Anr.24 Hon'ble High Court of Calcutta observed, " In the light of judgments in TRF Limited and Perkins Eastman in Section 12(5) of the Arbitration and Conciliation Act, it is clear that a person who may have an interest in the outcome of the dispute should not be made an Arbitrator."
page 28 of 45 "The petitioners, by this petition, seek termination of the mandate of the arbitrator, presently in seisin of the disputes between the parties in view of Section 12(5) of the Arbitration and Conciliation Act, 1996 ("the 1996 Act") read with judgments of the Supreme Court in Bharat Broadband Network Ltd. Vs. United Telecoms Ltd., Perkins Eastman Architects DPC vs. HSCC(India) Ltd. And Haryana Space Application Centre Vs. Pan India Consultants Pvt. Ltd........ Mr. Sanjay Poddar, learned Senior Counsel for the respondent, fairly concedes to the applicability of Section 12(5) of the 1996 Act as well as the aforesaid decisions and, therefore submits that this Court may appoint an arbitrator in place of the arbitrator presently in seisin of the disputes."