Gaurav Rai[1]
The IBA guidelines of 2004 set out instances which can raise justifiable doubts as to independence and impartiality of an arbitrator.[2] Although not binding, they are considered as starting points or guides to challenge of arbitrators internationally and under the arbitration statutes based on the model law.[3] In 2014 the IBA guidelines ("2014 guidelines") were amended to truly reflect the experience of the international arbitration community and clarified certain doubts regarding the nature of its suggested applicability.
In the 2014 guidelines it was made clear that these guidelines were not legal provisions and did not override any applicable national law or arbitral rules chosen by the parties. It was however hoped that these revised guidelines would find broad acceptance within the international arbitration community, and that they would assist parties, practitioners, arbitrators, institutions and courts in dealing with these important questions regarding impartiality and independence.[4]
The aforesaid 2014 guidelines consists of the Red (Non-waivable and waivable), Orange and Green Lists. In these lists are enumerated several instances of relationships between an arbitrator, party and counsel and as to whether such persons nominated as arbitrators are supposed to disclose such relationship and also as to how these situations affect the independence and impartiality of the arbitrator to serve in the Tribunal. The standard of test proposed in the IBA guidelines for such suitability is the reasonable third person standard test borrowed from the UNCITRAL Model laws of 1996.[5]
The Arbitration and Conciliation Act, 1996 of India, however, went a step further and via an amendment in 2015 added Schedule 5 and Schedule 7 to the Act. Schedule 5 consisted of situations which shall act as a guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence and impartiality of the Arbitrator.[6] Schedule 7 consists of situations and instances which make a person ineligible to be appointed as an arbitrator.[7] These possible situations were borrowed from the IBA Guidelines on arbitrator Impartiality and Independence and is a mix of the orange and red lists of the said guidelines.[8]
The Constitution of India mandates that a Supreme Court Judge retire at the age of 65 and that a High Court Judge retires at the age of 62. Most domestic arbitrations in India, above a certain amount of claim, invariably have retired Supreme Court and High Court judges functioning as arbitrators. In some cases, State run entities appoint retired engineers who can adequately apprise the arbitral Tribunal of underlying technical issues regarding arbitration which arise out of construction projects. Several parties also seek to appoint Senior Counsels to their arbitration. Every person so nominated is to be judged on the same anvil of instances enumerated under Schedule 5 and Schedule 7 of the Arbitration and Conciliation Act, 1996. In this paper the author will be looking at certain instances which affect such prospective arbitrators after the introduction of the amendment to the Arbitration and Conciliation Act, 2015.
The author aims to use this as an introduction to a working series wherein different instances as encountered in arbitrations will be discussed and debated. The same is also an invitation to readers of this blog to supplement this working series with their own experiences in the domestic arbitration circuit and their experience with Schedule 5 and Schedule 7 of the Arbitration and Conciliation Act, 1996.
[1] Gaurav Rai - The author is Advocate registered in State Bar Council of Delhi and is currently working as a legal assistant to Justice A.K. Patnaik, Former Judge Supreme Court of India and assists Justice Patnaik in his work as an arbitrator. He can be reached at raigaurav.legal@gmail.com
[2] ‘IBA Guidelines on Conflicts of Interest in International Arbitration 2004’ <https://www.ibanet.org/Document/Default.aspx?DocumentUid=21D27F55-134B-4791-A01C-F8B6658BAB24>.
[3] Nigel Blackaby and others, Redfern and Hunter on International Arbitration (Sixth Edition 2015, Oxford University Press) para 4.88.
[4] ‘IBA Guidelines on Conflicts of Interest in International Arbitration 2014’ s Introduction Para 6 <https://www.ibanet.org/Document/Default.aspx?DocumentUid=e2fe5e72-eb14-4bba-b10d-d33dafee8918>.
[5] ‘IBA Guidelines on Conflicts of Interest in International Arbitration 2014’ (n 4) 6 Clause (b) of Explanation to General Standard 2.
[6] Explanation 1, Section 12(1), Arbitration and Conciliation Act, 1996
[7] Section 12(5), Arbitration and Conciliation Act, 1996
[8] HRD Corporation v GAIL (India) Ltd (2017) 12 SCC 471 (Supreme Court of India) [14].