Section 15(2) of The Arbitration Act III

The present case is governed by The Pre-Amended 1996 Act [See, Section 15(2)]. This Court in ACC Ltd. v. Global Cements Ltd., (2012) 7 SCC 71 held that the procedure agreed upon by the parties for the appointment of the Original Arbitrator is equally applicable to the appointment of a Substitute Arbitrator, even if the agreement does not specifically provide so. In the present case, the agreement expressly provided that each party shall nominate One Arbitrator, and the Third Arbitrator shall be appointed in accordance with the Rules of The ICA. 

The Appellant-State had requested for 30 days to appoint another Arbitrator, after objections were raised to the first nomination. The ICA declined to grant that period and instead appointed the Arbitrator on behalf of the Appellant-State. That appointment was unjustified and contrary to the Rules of The ICA itself.

Locabail Ltd. v. Bayfield Properties, 2000 (1) All ER 65:

“The greater the passage of time between the event relied on as showing a danger of bias and the case in which the objection is raised, the weaker (other things being equal) the objection will be.”

The 1996 Act does not disqualify a former employee from acting as an Arbitrator, provided that there are no justifiable doubts as to his independence and impartiality. The fact that the (‘first nomination’) Arbitrator was in the employment of the State of Haryana over 10 years ago, would make the allegation of bias clearly untenable. 

Even as per Amendment Act, 2015 which has inserted the Fifth Schedule, the word “other” cannot be used to include past/former employees.”

Hon’ble Justice Indu Malhotra, The Govt. of Haryana v. M/s. G.F. Toll Road Pvt. Ltd., [Civil Appeal No. 27 of 2009]

Parties have mutually agreed to have Hon’ble Justice S.S. Nijjar as the Sole Arbitrator. Thus, ordered.