Holding

An arbitrator who falls within the categories of the Seventh Schedule is ineligible and his mandate terminates under Section 14, while challenges based on the Fifth Schedule must be decided by the arbitral tribunal after an award; in the present case, the appointments were not ineligible and the Fifth‑Schedule challenges could not be heard.

Summary

The dispute arose from a fourth arbitration between HRD Corporation and GAIL (India) Ltd. over a long‑term wax supply contract. The appellant challenged the appointments of two arbitrators, Justice K.K. Lahoti and Justice K. Doabia, invoking Sections 12 and 14 of the Arbitration and Conciliation Act, 1996, as amended in 2015. The Court examined the distinction between "ineligibility" under the Seventh Schedule and "justifiable doubts" under the Fifth Schedule, holding that only the former renders an arbitrator de jure unable to act and can be decided by a Section 14 application, whereas challenges based on the Fifth Schedule must be decided by the arbitral tribunal after an award. Applying this framework, the Court found that neither Justice Lahoti nor Justice Doabia fell within the ineligible categories, and the Fifth‑Schedule challenges could not be entertained at this stage. Consequently, the appeals were dismissed, upholding the High Court’s order allowing the arbitrators to continue.

Issues considered

Whether the appointments of Justice K.K. Lahoti and Justice K. Doabia are ineligible under the Seventh Schedule of the Arbitration and Conciliation Act, 1996.
Whether challenges based on the Fifth Schedule (justifiable doubts) can be entertained before the arbitral tribunal renders an award.
Whether the failure to disclose time‑allocation commitments under Section 12(1)(b) constitutes a ground for termination of the arbitrator’s mandate.

Legislation cited

Arbitration and Conciliation Act, 1996s. 12, s. 13, s. 14, s. 34
Arbitration and Conciliation (Amendment) Act, 2015s. 12(5)

Subjects

ArbitrationArbitrator independenceArbitrator impartialitySection 12 disclosureSection 14 terminationFifth ScheduleSeventh ScheduleIneligibilityChallenge of arbitratorIndian arbitration law

Judgment

(2017] 11 S.C.R. 857

HRD CORPORATION A
(MARCUS OIL AND CHEMICAL DIVISION)

v.

GAIL (INDIA) LIMITED
(FORMERLY GAS AUTHORITY OF INDIA LTD.) B

(Civil Appeal No. 111'.f6 of2017)

AUGUST 31, 2017

[R. F. NARIMAN AND SANJAY KISHAN KAUL, JJ.] C ,

Arbitration and Conciliation Act, 1996 - ss. 12, 14 - Grounds
of challenge uls.12 - Challenge to persons' possible appointment
as an arbitrator - Held: When person is approached in connection
with his possible appointment as an arbitrator, he has to make a D
disclosure in writing, as to existence of any direct or ind{rect present
or past relationship or interest in the parties/dispute, which is likely
to give justifiable doubts as to his independence or impartiality -
Such disclosure is to be made iii a form specified in Vlth Schedule,
guided by grounds. stated in Vth Schedule - By 2016 Amendment
Act, a dichotomy is made between persons who become "ineligible"
to be appointed as arbitrators, and persons about whom justifiable
doubts exist as to their independence or impartiality - s. 12(5) r/w
•
Vllth Schedule makes' it clear that if the arbitrator falls in any one
of the categories specified in VI/th· Schedule, he becomes
"ineligible". to act as arbitrator - On facts, challenge to appointment
F
· of two arbitrators-Justice 'D' and Justice 'L' as hit by Vth and VI/th
Schedule - As regards Justice 'D', he having already rendered an
award in a previous arbitration between the parties would not, by
itself, on the ground of reasonable likelihood of bias, render him
ineligible to be an arbitrator in a subsequent arbitration - Justice
'D' had no previous involvement in the very dispute - As regards, G
Justice 'L', he has only given a professional opinion to a company,
which has no concern with the instant dispute, he is clearly not
disqualified - Thus, challenge to the appointment as arbitrator not .
sustainable - Arbitration and Conciliation (Amendment) Act; 2015
- s. 12(5).
H
857
858 SUPREME COURT REPORTS [2017] l 1 S.C.R.

A Dfomissing the appeals, the Court
HELD: 1.1 Under Section 12 of the Arbitration and
Conciliation Act, 1996, it is clear that when a person is approached
in connection with his possible appointment as an arbitrator, he
has to make a disclosure in writing, in which he must state the
B existence of any direct or indirect present or past relationship or
interest in any of the parties or in relation to the subject matter
in dispute, which is likely to give justifiable doubts as to his
independence or impartiality. He is also to disclose whether he
can devote sufficient time to the arbitration, in particular to be
able to complete the entire arbitration within a period of 12
c months. Such disclosure is to be made in a form specified in the
Sixth Schedule, grounds stated in the Fifth Schedule being a guide
in determining whether such circumstances exist. Unlike the
scheme contained in the IBA Guidelines, where there is a non-
waivable Red List, parties may, subsequent to disputes having
D arisen between them, waive the applicability of the items
contained in the Seventh Schedule by an express agreement in
writing. [Para 12] [868-G-H; 869-A-C]
1.2 After the 2016 Amendment Act, a dichotomy is made
by the Act between persons who become "ineligible" to be
E appointed as arbitrators, and persons about whom justifiable
doubts exist as to their independence or impartiality. Since
ineligibility goes to the root of the appointment, Section 12(5) ·
read with the Seventh Schedule makes it clear that ifthe arbitrator
falls in any oue of the categories specified in the Seventh Schedule,
he becomes "ineligible" to act as arbitrator. Once be becomes
F ineligible, it is clear that, under Section 14(1)(a), he then becomes
de jure unable to perform bis functions inasmuch as, in law, be is
regarded as "ineligible". In order to determine whether an
arbitrator is de jure unable to perform his functions, it is not
necessary to go to the Arbitral Tribunal under Section 13. Since
G such a person would lack inherent jurisdiction to proceed any
further, an application may be filed under Section 14(2) to the
Court to decide on the termination of his/her mandate on this
ground. As opposed to this, in a challenge where grounds stated
in the Fifth Schedule arc disclosed, which give rise to justifiable
doubts as to the arbitrator's independence or impartiality, such
H
HRD CORPORATION v. GAIL (INDIA) LIMITED 859

doubts as to independence or .impartiality have to be determined A
as a matter of fact in the facts of the particular challenge by the
Arbitral Tribunal under Section 13. If a challenge is not successful,
and the Arbitral Tribunal decides that there are no justifiable
doubts as to the independence or impartiality of the arbitrator/
arbitrators, the Tribunal must then continue the arbitral
B
proceedings under Section 13(4) and make an award. It is only
after such award is made, that the party challenging the arbitrator's
appointment on grounds contained in the Fifth Schedule may make
an application for setting aside the arbitral award in accordance
with Section 34 on the aforesaid grounds. It is clear, therefore,
that any challenge contained in the Fifth Schedule against the C
appointment of Justice 'D' and Justice 'L' cannot be gone into at
this stage, but will be gone into only after the Arbitral Tribunal
has given an award. Therefore, no opinion is expressed on items
contained in the Fifth Schedule under which the appellant may
challenge the appointment of either arbitrator. They will be free D
to do so only after an award is rendered by the Tribunal. [Para
13) [877-H; 878-A-F]
1.3 Items 1 to 19 of the Fifth Schedule are identical with
the said items in the Seventh Schedule. The only reason that
these items also appear in the Fifth Schedule is for purposes of
disclosure by the arbitrator, as unless the proposed arbitrator E
discloses in writing his involvement in terms of Items 1 to 34 of
the Fifth Schedule, such disclosure would be lacking, in which
case the parties would be put at a disadvantage as such
information is often within the personal knowledge of the
arbitrator only. It is for this reason that it appears that Items 1 to F
19 also appear in the Fifth Schedule. [Para 17) [883-D-E]
1.4 The items contained in the Schedules owe their origin
to the IBA Guidelines, which are to be construed in the light of
the general principles contained therein-that every arbitrator shall
be impartial and independent of the parties at the time of accepting G
his/her appointment. Doubts as to the above are only justifiable
if a reasonable third person having knowledge of the relevant
facts and circumstances would reach the conclusion that there is
a likelihood that the arbitrator may be influenced by factors other
than the merits of the case in reaching his or her decision. This
H
860 SUPREME COURT REPORTS [2017] 11 S.C.R.

A test requires taking a broad common-sensical approach to the
items stated in the Fifth and Seventh Schedules. This approach
would, therefore, require a fair construction of the words used
therein, [Para 20] [884-F-H; 885-A]
1.5 On reading Item 1 of the Seventh Schedule, it is clear
B that the item deals with "business relationships". The words "any
other" show that the first part of Item 1 also confines "advisor"
to a "business relationship". The arbitrator must, therefore, be
an "advisor" insofar as it concerns the business of a party.
Howsoever widely construed, it is very difficult to state that a
professional relationship is equal to a business relationship, as,
C in its widest sense, it would include commercial relationships of
all kinds, but would not include legal advice given. This becomes
clear if it is read along with Items 2, 8, 14 and 15, the last item
specifically dealing with "legal advice". Under Items 2, 8 and 14,
advice given need not be advice relating to business but can be
D advice of any kind. The importance of contrasting Item 1 with
Items 2, 8 and 14 is that the arbitrator should be a regular advisor
under items 2, 8 and 14 to one of the parties or the appointing
party or an affiliate thereof, as the case may be. Though the word
"regularly" is missing from Items 1 and 2, it is clear that the
arbitrator, if he is an "advisor", in the sense of being a person
E who has a business relationship in Item 1, or is a person who
"currently" advises a party or his affiliates in Item 2, connotes
some degree of regularity in both items. The advice given under
any of these items cannot possibly be one opinion given by a
retired Judge on a professional basis at arm's length. Something
F more is required, which is the element of being connected in an
advisory ca1>acity with a party. Since Justice Lahoti has only given
a professional opinion to GAIL, which has no concern with the
instant dispute, he is clearly not disqualified under Item 1. [Para
22] (885-F-H; 886-A-B]
G 1.6 On reading the IBA guidelines and the heading which
appears with Item 16, namely "Relationship of the arbitrator to
the dispute", it is obvious that the arbitrator has to have a
previous involvement in the very dispute contained in the present
arbitration. Admittedly, Justice 'D' has no such involvement.
Further, Item 16 must be read along with Items 22 and 24 of the
H
HRD CORPQRATION v. GAIL (INDIA) LIMITED , 861

Fifth Schedule; The disqualification contained in Items 22 and 24 A
is not absolute, as an arbitrator who has, within the past three
· years, been appointed as arbitrator on two or more occasions by
one of the parties or an affiliate, may yet not be disqualified on
his showing that he was independent and impartial on the earlier
two occasions. Also, if he currently serves or has served within B
the past three years as arbitrator in another arbitration on a related
issue, he may be disqualified under Item 24, which must then be
contrasted with Item 16. Item 16 cannot be read as including
. previous involvements in another arbitration on a related issue
involving one of the parties as otherwise Item 24 will be rendered
largely ineffective. It must not be forgotten that Item 16 also C
appears in the Fifth Schedule and has, therefore, to be
harmoniously read with Item 24. The submission that the
expression "the arbitrator" in Item 16 cannot possibly mean "the
arbitrator" acting as an arbitrator, but must mean that the
proposed arbitrator is a person who has liad previous involvement
D
in the case in some other avatar, is a sound submission as ''the
arbitrator" refers to the proposed arbitrator. This becomes clear,
when contrasted with Items 22 and 24, where the arbitrator must
.have served "as arbitrator" before he can be disqualified.
Obviously, Item 16 refers to previous involvement in an advisory
or other capacity in the very dispute, but not as arbitrator. E
Appointment as an arbitrator is not a "business relationship"
with the respondent under Item 1. Nor is the delivery of an award
providing an expert "opinion" i.e. advice to a party covered by
Item 15.. [Para 24) (886-F-H; 887-A-D]
1.7 The fact that Justice 'D' has already rendered an award· F
in a previous arbitration between the parties would not, by itself,
· on the ground of reasonable likelihood of bias, render him
ineligible to be an arbitrator in a subsequent arbitration. Nothing
is shown to indicate th.at Justice 'D' would be a person holding a
pronounced anti-claimant view. Therefore, there is no real
possibility that Justice 'D' will not bring an open mind and G
objective judgment to bear on arguments made by the parties in
the fourth arbitration, which may or may not differ from arguments
made in the third arbitration. [Para 25, 28] [887-D-E; 891-A-B]

H·
862 SUPREME COURT REPORTS [2017) ll S.C.R.

A 1.8 The appointment of Justice 'D' was attacked on the
ground that he had not made a complete disclosure, his disclosure
statement did not indicate as to whether he was likely to devote
sufficient time to the arbitration and would be able to complete it
within 12 months. The appellant cannot be allowed to raise this
B point at this stage as it. was never raised earlier. Obviously, if
Justice 'D' did not indicate anything to the contrary, he would be
able to devote sufficient time to arbitration and complete the
process within 12 months.[Para 29) [891-C-D]
1.9 The submission that the arbitrator must without delay
make a disclosure to the parties in writing need not detain this
C Court. Justice 'D"s disclosure was by a letter dated 31.10.2016
which was sent to the Secretary General of the International
Centre for Alternative Dispute Resolution (ICADR) and for no
fault of Justice 'D', the ICADR, through oversight, did not
handover the said letter or a copy thereof to the appellant until
D 24.11.2016, which is stated in its letter dated 29.11.2016. [Para
30] [891-E-F]
1.10 The submission that under Explanation 3 to VII
Schedule, maritime or commodities arbitration may draw
arbitrators from a small, specialized pool, in which case it is the
E custom and practice for parties to appoint the same arbitrator in
different cases, and this is in contrast to an arbitrator in other
cases where he should not be appointed more than once, cannot
be accepted. Explanation 3 stands by itself and has to be applied
as a relevant fact to be taken into account. It has no indirect
bearing on any of the other items mentioned in the Seventh
F Schedule. Thus, the Single Judge's judgment requires no
interference.[Para 31, 32] [891-G-H; 892-A]
Voestalpine Schienen GmbH v. Delhi Metro Rail
Corporation Ltd. (2017) 4 SCC 665 ; ONGC v. Saw
Pipes Ltd (2003) 5 SCC 705 : [2003] 3 SCR 691 ;
G ONGC v. Western Geco International Ltd. (2014) 9 SCC
263 : [2014] 12 SCR 1 ; Renusagar Power Plant Co
Ltd. v. General Electric Co. (1994) Supp (1) SCC 644 ;
Associate Builders v. Delhi Development Authority
(2015) 3 sec 49 - referred to.
H
HRD CORPORATION v. GAIL (INDIA) LIMITED 863

H. v. L & others [2017) 1 W.L.R. 2280 ; Locabail v. A
Bayfield (2000) 1 All E.R. 65 - referred to.
Arbitration by Russell 23rd Edn - referred to.
Case Law Reference
(2011) 4 sec 665 referred to Para 16
B
[2003) 3 SCR 691 referred to Para 18
[2014) 1 SCR 1 referred to Para 18
(1994) Supp (1) sec 644 referred to Para 18
(2015) 3 sec 49 referred to Para 18
c
CIVIL APPELLATE JURISDICTION : Civil Appeal No.11126
of2017.
From the final impugned Judgment and Order dated 24.04.2017
of the High Court of Delhi at New Delhi in OMP (T)(COMM.) 22 of D
2017
WITH
Civil Appeal No.11127 of2017.
Sh yam Divan, Gopal Jain, Sr. Advs, Bindu Saxena, Ms.Aprajita E·
Swamp, Ms.Chimayee Chandra, Ms. Krita Awasthi, Shailendra Swamp,
Ad vs for the Appellant.
Ms. Vanita Bhargava, Ajay Bhargava, Jeevan B. Panda, Abhisaar
Bairagi (for Mis Khaitan & Co.), Advs for the Respondent.
F
The Judgment of the Court was delivered by
R. F. NARIMAN, J. 1. Leave granted.
2. The present appeals raise interesting questions relating to the
applicability of Sections 12 and 14 of the Arbitration and Conciliation
Act, 1996, in particular with respect to sub-section (5) of Section 12 G
added by the Arbitration and Conciliation (Amendment) Act, 2015 (Act
3 of 2016) (hereinafter referred to as the 2016 Amendment Act).
3. Briefly stated, the relevant facts necessary to decide this case
are as follows. The respondent, GAIL (India), issued a notice inviting
tenders for supply of wax generated at GAIL's plant at Pata, Uttar H .
864 SUPREME COURT REPORTS [2017] 11 S.C.R.

A Pradesh for a period of 20 years on an exclusive basis. The appellant
successfully tendered for the said contract and the parties entered into
an agreement dated April I, 1999. Disputes arose between the parties,
the appellant claiming that GAIL had wrongfully withheld supplies of
wax, as a result of which the appellant invoked the arbitration clause
B included in the agreement.
4. Three earlier arbitrations have taken place between the parties.
The present dispute arises from the fourth such arbitration. For the
period 2004-2007, an Arbitral Tribunal consisting of Justice AB. Rohatgi
(presiding arbitrator), Justice J.K. Mehra and Justice N.N. Goswamy
published an award on April 8, 2006 in which they directed specific
C performance of the agreement dated April 1, 1999. This award was
never challenged and has since become final.
5. For the period 2007-2010, a second arbitration was held
consisting of the same panel as the first arbitration.
D 6. For the period 2010-2013, the same Arbitral Tribunal was
constituted. However, while the proceedings were pending, Justice·
Goswamy expired and Justice T.S. Doabia was appointed in his place.
Justice A.B. Rohatgi resigned on February 17, 2013 as the presiding
arbitrator, as a result of which Justice S.S. Chadha was appointed to fill
his vacancy. This third arbitration proceeding culminated into two separate
E awards, both dated July 22, 2015. The appellant has filed a petition under
Section 34 of the Act assailing the said awards, which is pending before
the Delhi High Court.
7. In respect of the period from 2016 to 2019, initially, the appellant
nominated Justice K. Ramamoorthy as its arbitrator. However, he
F withdrew from the case on December 14, 2016 and Justice Mukul Mudgal
was nominated as arbitrator in his place. The respondent appointed Justice
Doabia, and Justice Doabia and Justice K. Ramamoorthy appointed
Justice K.K. Lahoti to be the presiding arbitrator, before Justice K.
Ramamoorthy withdrew from the case. Two applications have been
G filed by the appellant under Section 12 of the Act, one seeking termination
of the mandate of Justice Doabia and the other seeking termination of
the mandate of Justice Lahoti. These two applications were heard and
disposed of by an order dated February 16, 2017. Justice Lahoti, with
whom Justice Doabia concurred, held that they were entitled to continue
with the arbitration. Justice Mukul Mudgal, on the other hand, concurred
H
HRD CORPORATION v. GAIL (INDIA) LIMITED 865
[R. F. NARIMAN, J.]

in the appointment of Justice Lahoti but held that Justice Doabia's A
appointment was hit by certain clauses of the Fifth and Seventh Schedules
to the Act and, therefore, that his mandate has terminated. As against
this order, OMP No.22/2017 was filed before a single Judge of the Delhi
High Court who then dismissed both the petitions.
8. Shri Shyam Divan, learned senior advocate appearing in civil B
appeal arising out of SLP(C) No. 20679 of 2017 and Shri Gopal Jain,
learned senior advocate, appearing in civil appeal arising ofSLP(C)No.
20675 of2017 have assailed the judgment of the single Judge. According
to Shri Divan, the appointment of Justice Lahoti squarely attracted Items
1, 8 and 15 of the Seventh Schedule thereby making him ineligible to act
as arbitrator. He also argued that Items 20 and 22 contained in the Fifth C
Schedule are also attracted to the facts of this case, thereby giving rise
to justifiable doubts as to his independence or impartiality. He further
argued that if for any reason Justice Doabia's appointment is held to be
bad, Justice Lahoti 's appointment must follow as being bad as an ineligible
arbitrator cannot appoint another arbitrator. He has argued before us D
that the 2016 Amendment Act, which substituted Section 12(1), read
with the Fifth and Seventh Schedules and introduced Section 12(5), has
to be read in the context of the grounds for challenge to awards being
made narrower than they were under Section 34 of the Act. This being
so, it is extremely important that the independence and impartiality of an
arbitrator be squarely and unequivocally established, and for this purpose, E
the grounds contained in the Fifth and Seventh Schedules should be
construed in a manner that heightens independence and impartiality.
According to learned counsel, once a Seventh Schedule challenge is
presented before the Court, the arbitrator becomes ineligible and
consequently becomes de jure unable to perform his functions under F
Section 14 of the Act.
9. Shri Gopal Jain, learned senior advocate appearing in civil appeal
arising from SLP(C) No. 20679 of2017, argued that the object of the
2016 Amendment Act is to appoint neutral arbitrators who are
independent and fair in their decision making. According to learned G
counsel, Justice Doabia was ineligible as he squarely fell within Items 1,
15 and 16 of the Seventh Schedule, the last Item 16 being contrasted
with Explanation 3 thereof. According to him, Justice Doabia has not
disclosed in writing circumstances which are likely to affect his ability to
devote sufficient time to the arbitration and for this reason also, his
H
866 SUPREME COURT REPORTS (2017) l I S.C.R.

A appointment should be set aside. According to learned counsel, once
Justice Doabia's appointment falls, Justice Lahoti's appointment also
falls. ·
I 0. Ms. Vanita Bhargava, learned counsel appearing on behalf of
the respondent, has argued, referring to various provisions of the Seventh
B Schedule, that neither Justice Doabia nor Justice Lahoti are ineligible to
act as arbitrators. According to her, the list in the Fifth and Seventh
Schedules is taken from the International Bar Association Guidelines on
Conflicts oflnterest in International Arbitration, 2014 (hereinafterreferred
to as IBA Guidelines) and must be read in consonance therewith. Once
that is done, it becomes plain that Item 16 would not apply to Justice
c Doabia for the simple reason that he should be an arbitrator who has
had previous involvement in the very dispute at hand and not in an earlier
arbitration. For this purpose, she contrasted Item 16 with Items 22 and
24 of the Fifth Schedule. She also argued that the point regarding non
disclosure on grounds contained in Section 12(1 )(b) is an afterthought
D and has never been argu~d before either the Arbitral Tribunal or the
single Judge. According to her, the single Judge is right in holding that
Justice Lahoti's appointment is not hit by Item I of the Seventh Schedule
nor is Justice Doabia's appointment hit by Item 16 of the same Schedule,
and the reasoning contained in the judgment being correct need not be
interfered with.
E
11. Having heard learned counsel for both the sides, it is necessary
to first set out the statutory scheme contained in Sections 12 to 14 of the
Act. These Sections read as under:-
"Sec. 12 Grounds for challenge.-
F (I) When .a person is approached in connection with his possible
appointment as an arbitrator, he shall disclose in writing any
circumstances,-
(a) such as the existence either direct or indirect, of any past
or present relationship with or interest in any of the parties or
G in relation to the subject-matter in dispute, whether financial,
business, professional or other kind, which is likely to give rise
. to justifiable doubts as to his independence or impartiality; and
(b) which are likely to affect his ability to devote sufficient
time to the arbitration and in particular his ability to complete
H the entire arbitration within a period of twelve months.
HRD CORPORATION v. GAIL (INDIA) LIMITED 867
[R. F. NARIMAN, J.]

Explanation 1.- The grounds stated in the Fifth Schedule shall A
guide in determining whether circumstances exist which give
rise to justifiable doubts as to the independence or impartiality
of an arbitrator.
Explanation 2. -The disclosure shall be made by such person
in the form specified in the Sixth Schedule. B
(2) An arbitrator, from the time of his appointment and throughout
the arbitral proceedings, shall, without delay, disclose to the parties
in writing any circumstances referred to in sub-section (1) unless
. they have already been informed of them by him.
(3) An arbitrator may be challenged only if- c
(a) circumstances exist that give rise to justifiable doubts as to
his independence or impartiality, or
(b) he does not possess the qualifications agreed to by the
parties.
D
(4) A party may challenge an arbitrator.appointed by him, or in
whose appointment he has participated, only for reasons of which
he becomes aware after the appointment has been made.
(5) Notwithstanding any prior agreement to the contrary, any
person whose relationship, with the parties or counsel or the E
subject-matter of the dispute, falls under any of the categories
specified in the Seventh Schedule shall be ineligible to be appointed
as an arbitrator:
Provided that parties may, subsequent to disputes having arisen
between them, waive the applicability of this sub-section by an F
express agreement in writing."
"Sec. 13 Challenge procedure.-
(!) Subject to sub-section (4 ), the parties are free to agree on a
procedure for challenging an arbitrator.
G
(2) Failing any agreement referred to in sub-section (I), a party
who intends to challenge an arbitrator shall, within fifteen days
after becoming aware of the constitution of the arbitral tribunal or
after becoming aware of any circumstances referred to in sub-
section (3) of section 12, send a written statement of the reasons
for the challenge to the arbitral tribunal. H
868 SUPREME COURT REPORTS [2017] 11 S.C.R.

A (3) Unless the arbitrator challenged under sub-section (2) with-
draws from his office or the other party agrees to the challenge,
the arbitral tribunal shall decide on the challenge.
(4) If a challenge under any procedure agreed upon by the parties
or tinder the procedure under sub-section (2) is not successful,
B the arbitral tribunal shall continue the arbitral proceedings and
make an arbitral award.
(5) Where an arbitral award is made under sub-section (4), the
party challenging the arbitrator may make an application for set-
ting aside such an arbitral award in accordance with section 34.
c (6) Where an arbitral award is set aside on an application made
under sub-section (5), the Court may decide as to whether the
arbitrator who is challenged is entitled to any fees."
"Sec. 14. Failure or impossibility to act. -
( 1) The mandate of an arbitrator shall terminate and he shall be
D
substituted by another arbitrator, if-
(a) he becomes de jure or de facto unable to perform his
functions or for other reasons fails to act without undue delay;
and
E (b) he withdraws from his office or the parties agree to the
termination of his mandate.
(2) If a controversy remains concerning any of the grounds referred
to in clause (a) of sub-section (1), a party may, unless otherwise
agreed by the parties, apply to the Court to decide on the termination
F of the mandate.
(3) If, under this section or sub-section (3) of section 13, an arbitrator
withdraws from his office or a party agrees to the termination of
the mandate of an arbitrator, it shall not imply acceptance of the
validity of any ground referred to in this section or sub-section (3)
G of section 12."
12. Under Section 12, it is clear that when a person is approached
in connection with his possible appointment as an arbitrator, he
has to make a disclosure in writing, in which he must state the
existence of any direct or indirect present or past relationship or
H
HRD CORPORATION v. GAIL (INDIA) LIMITED
. 869
[R. F. NARIMAN, J.]

interest in any of the parties or in relation to the s_ubject matter in A
dispute, which is likely to give justifiable doubts as to his
independence or impartiality. He is also to disclose whether he
can devote sufficient time to the arbitration, in particular to be -
able to complete the entire arbitration within a period of 12 months.
Such disclosure is to be made in a form specified in the Sixth
B
Schedule, grounds stated in the Fifth Schedule being a guide in
determining whether such circumstances exist. Unlike the scheme
contained in the IBA Guidelines, where there is a non-waivable
Red List, parties may, subsequent to disputes having arisen
between them, waive the applicability of the items contained in
the Seventh Schedule by an express agreement in writing. The c
Fifth, Sixth and Seventh Schedules are important for determination
of the present disputes, and are set out with the corresponding
provisions of the IBA Guidelines hereunder:
"THE FIFTH SCHEDULE
[See section 12 (1) (b)] D
The following grounds give rise to jurstifiable doubts as to the
independence or impartiality of arbitrators:
"'";.:·:,.,,;;;.~ .:,;. 0; ,_;.;,..:~~ :·.;··:~=,,;;;;.;:···,;wo~;;;,"·:·~:;;-,,;;="""rr'==·,:;;;:;·;iii'"'""";""""<:·'~'-""F'''-'-F;'';~-;;~;:: '.'.'"b''~•""P<;;_"""·W''".o''(i:,.;"'-·"-"'"i:'.;:;:7:
Fifth S~hedull! · · ·. ._ . i Correspm:ul,ing, proy~~l()l). m
__ .. _·. . . .. the.IBA,-Guicle(ipes, __ -·... · -
1.·-The~bliritl-;;;:--;s·~a:~ e~pl oyeeT(Non-W;iV"~bkRed Lisir----·-'-~'
E
consultant, advisor or has any other! . . .
past or present business relationshipi I.I There 1s an 1den11ty
with a party. I between a party and the
I arbitrator, or the alb itrator is a
I legal representative or
I employee of an entity that is a
_____ ... . _ ····-········--··-····-· Jparty_int~~<j~bitration, .............. F
2. The albitrator currently represents! (Waivable Red List)
or advises one of the parties or ani
affiliate of one of the parties. I 2.3.1 The arbitrator currently
! represents or advises one of the
iI parties,
.
or an affiliate of one of
I the parties.
I
G
3. The albitrator currently represents! (Waivable Red List)
the lawyer or law firm acting as,
counsel for one of the parties. I 2.3.2 The arbitrator currently
i represents or advises the lawyer
' or law firm acting as counsel for
one of the parties.
H
870 SUPREME COURT REPORTS [2017) l I S.C.R.

A 4.The -arbitrator is a
lawyer -;n- the· (w 3.ivable Red List) -
same law firm which is representing
one of th(: parties. ~ 2.3.3 The arbitrator is a lawyer in
I the same law firm as the counsel to'
! one of the parties.
. . .. . t .....
5. The arbitrator is a manager, (W aivable Red List)
B director or part of the management, or
1

has a similar controlling influence, in1 2.3.4 The arbitrator is a manager,,
an affiliate of one of the parties if the directo~ or member of the!
1

affiliate is directly involved in thel supervisory board, or has al
matters in dispute in the arbitration. ! controlling influence in an affiliate 1

: of one of the parties, if the affiliate:
c .... • __
; is directly involved in the matters in.
dispute in the arbitration. .
1
6. The arbitrator's law firm had ai (W aivable Red List) I
previous but terminated involvement! · .
1
in the case without the arbitrator 2.3.5 The arbitrator's law firm had
1
1
,

being involved himself or herself. 'a previous but terminated,
: involvement in the case without the
D i arbitrator being involved
I himselfor herself.
7. The arbitrator's law firm currently] (W aivable Red List)
has a significant commerciali
relationship with one of the parties or 2.3.6 The arbitrator's law firm.
an affiliate of one of the parties. currently has a significant'
commercial relationship with one!
E of the parties, or an affiliate of one I
, ofthe arties. '
8. The arbitrator regularly advises the: (Waivable Red List)
appointing party or an affiliate of the i
appointing party even though neither! 2.3.7 The arbitrator regularly 1

the arbitrator nor his or her firmi advises one of the parties, or an i
derives a significant financial income': affiliate of one of the parties, but
F therefrom. ; neither the arbitrator nor his or her·I
i firm derives a significant financial,
i i ncom e therefrom. I

9. The arbitrator has a close familyi (W aivable Red List)
relationship with one of the parties:
and in the case of companies with the, 2.3.8 The arbitrator has a close,
persons in the management and\ family relationship with one of the:
G controlling the company. i parties, or with a manager, director'
I or member of the supervisory I
l board, or any person having a 1'

controlling influence in one of the
parties, or an affiliate of one of the:
or with a counsel
H
,

HRD CORPORATION v. GAIL (INDIA) LIMITED 871
[R. F. NARIMAN, J.] .

I 10. A close family member of thei (Waivable Red List) A
' arbitrator has a significant financial!
interest in one of the parties or an affiliate! 2.3.9 A close family member. of
ofone of the parties. I the arbitrator has a significant
i financial or peraonal interest in
I one.ofthe parties, or an affiliate ol
· I one of the parties.
B
1
11. The arbitrator is a legal representative! (Non-WaivableRedList)
l of an entity that is a party in the] . . .
! arbitration. . 1 1.1 There 1s an identity between a
1 · I party and .the · arbitrator, or the
1,' I arbitrator is a legal representative
i I or employee of an entity that is a
i I. party in the arbitration.
.i
1 I
c
' 12. Tiie arbitrator is-a manager, director orl (Noii-WaivableRed List) - . ···
I part of the management, or has a similarl
I controlling influence in one of the parties. I i.2 The arbitrator is a manager,
I I director or member of the
I supeIVisory board, or has a
[ controlling influence on one of the
i
D
I [ parties or an entity that has a direct
: I economic interest in the award to.
i 1 be renderal in the arbitration.
i 13. The arbitrator has a significant! (Non-WaivableRedl..ist)
financial interest in one of the parties or! . . ,
the outcome of the case. 11:3 Th_e arbitrator has a .s1grufic~t
I fmancial or peraonal interest m E
I one of the parties; or the outcome
r of the case. ·
14. The arbitrator regularly advises thej (Non-Waivable Red List)
appointing party or an affiliate of thel
appoiniing party, and the arbitrator or his 1.4 The arbitrator or his or her
or her firm derives a significant financialj firm re~larly advises the party, or
income therefrom 1 an affiliate of the party, and the F
arbitrator or his or her firm derives
I significant·
1 therefrom.
financial income

i 15. The arbitrator has given legal advice orl (Waivable Red List)
\ provided an expert opinion on the disputej __ . . .
i to a party or an affiliate of one of ther 2.1.1 The arbitrator has given legal
I pariies. i advice, or provided an expert G

~S1~,=:~~00;1~:~~:~~.
i 1 involvement in the dispute. ·
H
872 SUPREME COURT REPORTS [2017] 11 S.C.R.

A 17. The arbitrator holds shares, either (Waivable Red List)
directly or indirectly, in one of the;
parties or an affiliate of one of the! 2.2.I The arbitrator holds shares,
parties that is privately held. · either directly or indirectly, in one
of the parties, or an affiliate of one
, of the parties, this party or an
; affiliate bein1> nrivatelv held.
B 18. A close family member of the (Waivable Red List)
arbitrator has a significant financiaL
interest in the outcome of the dispute.· 2.2.2 A close family member of
, the arbitrator has a significant
· financial interest in the outcome of
' the dispute.
19. The arbitrator or a close family (Waivable Red List)
c member of the arbitrator has a close :
relationship with a third party who ' 2.2.3 The arbitrator, or a close
may be liable to recourse on the part . family member of the arbitrator,
of the unsuccessful party in the has a close relationship with a
dispute. ; non-party who may be liable to
! recourse on the part of the
· unsuccessful oa1ty in the dispute;
D 20. The arbitrator has within the past; (Orange List)
three yearn Serl'cd US counsel for one:
of the pmtie' or an affiliate of one ofi 3.1.l The arbitrator has, within the
the pa1ties or has previously advised! past three years, served as counsel
or been consulted by the party or an. for one of the parties, or an
affiliate of the party making the, affiliate of one of the parties, or
appointment in an unrelated matter,, has previously ad vised or been
E but the arbitrator and the party or the consulted by the party, or an
1

affiliate of the party have no ongoing; affiliate of the pa1ty, making the
relations hip. · appointment in' an unrelated
matter, but the arbitrator and the
, party, or the affiliate of the party,
[ have no ongoing relationship.
F 21. The arbitrator has within the pas( (Orange List)
three years served as counsel againsf
one of the parties or an affiliate of: 3.1.2 The arbitrator has. within the
one of the patties in an unrelated' past three years, served as counsel
matter. . against one of the parties, or an
affiliate of one of the paities, in an
unrelated matter.
G 22. The arbitrator has within itie pasii (Orange List)
three years been appointed as'
arbitrator on two or more occasions 3.1.3 The arbitrator has, within the
by one of the parties or an affiliate of: past three years, been appointed as
one of the parties. : arbitrator on two or more
j occasions by one of the parties, or

~ an affiliate of one of the parties.
H
HRD CORPORATION v. GAIL (INDIA) LIMITED 873
[R. F. NARIMAN, J.]

23. The arbitrator's law film has within! (Orange List) A
the past three years acted for one of the I
parties or an affiliate of one of the parties 3. I .4 The arbitrator's law firm has,
j

in an unrelated matter without the! within the past three years, acted
involvement of the arbitrator. i for or against one of the parties, or
I an affiliate of one of the parties, in
i an unrelated matter without the
.. . . ___ --··. _. __ , _ji~v()Jvement()ft~j!atbitJ:11tor, _ _
B
24. The arbitrator currently serves, or has! (Orange List)
served within the past three years, as! . .
atbitrator in another arbitration on a! 3.1.5 The arb1tmtor currently
related issue involving one of the parties I serves, or has served within the
or an affiliate of one of the parties. i past three years, as arbitrator in
i another atbitmtion on a related
I! or
issue involving one of the parties, c
an affiliate of one of the parties.
25. The arbitrator and another arbitrator! (Orange List)
are lawyers in the same Jaw firm. i
I 3.3. I The arbitrator and another
I arbitmtor are lawyers in the same
I law firm.
26. The arbitrator was within the past! (Orange List)
D
three years a partner of, or otherwise I .
affiliated with, another arbitrator or any! 3.3.3 The atbitmtor was, within
of the counsel in the same arbitmtion. I the past three years, a partner of,
l or otherwise affiliated with,
· another atbitrator or any of the
, counsel in the arbitration.
27. A lawyer i Ii the arbitmtor' s law firmi (Orange List) E
is an arbitrator in another disputei
involving the same party or parties or anl 3.3.4 A lawyer in the atbitrator's
affiliate of one of the parties. ! law firm is an atbitmtor in another

[ dispute involving the same party
! or parties, or an affiliate of one of
I h •
_____ _l!_~_pa.=r,t"'1e,sc_·--~-----· _ _
28. A ·close family member of the I (Orange List) F
atbitrator is a partner or employee of the!
law finn representing one of the parties, 3.3.5 A close family member of
J

but is not assisting with the dispute. 1· the arbitrator is a partner or
employee of the law firm
i representing one of the parties, but
i is not assisting with the dispute.

29. The atbitrator has within the past! (Orange List) G
three years received more than three!
appointments by the·same counsel or the! 3.3.8 The atbitmtorhas, within the
same law firm. past three years, been appointed
on more than three occasions by
the same counsel, or the same law
,_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _f_i_r_m_._____________
H
874 SUPREME COURT REPORTS [2017] ll S.C.R.

A 3o. The arbitrator'Slaw finn is currentfy(Orange Li.St) - -
acting adverse to one of the parties or ani
affiliate of one of the parties. ; 3 .4.1 The arbitrator's law firm is
I currently acting adversely to one of

the parties. or an affiliate of one of
______ .. ___________ --;J!!e_(Jarti~s. _______ _
31. The arbitrator had been associated I (Orange List)
B within the past three years with a party!
or an affiliate of one of the parties in a: 3.4.2 · The arbitrator has been
professional capacity. such as a former associated with a party. or an
employee or partner. . affiliate of one of the parties, in a
! professional capacity. such as a
I fonner employee or partner.
32. The arbitrator holds shares. either I. (Orange List)
c directly or indirectly, which by reason of'
number or denomination constitute a; 3 .5.1 The arbitrator holds shares,
material holding in one of the parties orl either directly or indirectly. that by
an affiliate of one of the parties that isl reason of number or denomination
publicly listed. j constitute a material holding in one

1 of the parties. or an affiliate of one
i of the parties. this party or affiliate
_________ -----------~_being__j)ll~i~l)' list~'-
D 33. The arbitrator holds a position in anl' (Orange List)
arbitration institution with appointing,
authority over the dispute. , 3 .5.3 The arbitrator holds a position
i with the appointing authority with
I respect to the dispute .
. 34.The arbitrator is a man-ager, directod (Orange List) .
or part of the management. or has a·
E similar controlling influence. in an: 3.5.4 The arbitrator is a manager.
affiliate of one of the parties. where the! director or member of the
affiliate is not directly involved in the1 supervisory board. or has a
matters in dispute in the arbitration. i controlling influence on an affiliate
of one of the parties. where the
affiliate is not directly involved in
the matters in dispute in the
F . arbitration.
Explanation !.-The tenn "close fumily: Footnote 3.- Throughout the
member" refers to a spouse. sibling.I Application Lists, the term 'close
child. parent or life partner. :, family member' refers to a: spouse.
I sibling. child. parent or life partner.
! in addition to any other family
member with whom a close
G : relationship exists.

Explanation 2.-The ·term "affiliate"', Footnote 4.- Throughout the
encompasses all companies in one groupl Application Lists. the term 'affiliate'
of companies including the parent1 encompasses all companies in a
company. I group of companies. including the
parent company.
1

---- - - - - -
L __ _
H
HRD CORPORATION v. GAIL (INDIA) LIMITED 875
[R. F. NARIMAN, J.]

A
,-···---· - -·-·-···· · · - - • -· I • • • - ·-···-····--····-······ --···- •• •• --••• •••••• - -··-·· • ··-··· -- - •••••• • • ··1
i Explanation 3.-For the removal: Footnote 5.- It may be the:
! of doubts, it is clarified that it mayi practice in certain types of\
i be the practice in certain specific I arbitration, such as maritime, i
: kinds of arbitration, such as sports or commodities/
J maritime . or commodities arbitration, to draw i
I arbitration, to draw arbitrators arbitrators from a smaller orl'
; from a small, specialized pool. If specialised pool ofl.
B
i in such fields it is the custom and individuals. If in such fields iii
. ! practice for parties frequently to is the custom and practice forJ
i appoint the same arbitrator in1 parties to frequently appoint!
'
I 1 '
I different cases, this is a relevant! the same arbitrator· ini
i fact to be taken into account while I diffe.rent cases, no disclosure/
I applying the rules set out above. i of this fact is required, where:
' I a.II parties . in the arbitration I
c
[should be familiar with such!
custom and practice.
1
I i
___J

·D
"THE SIXTH SCHEDULE
[See section 12 (l)(b)]
NAME:
CONTACT DETAILS:
PRIOR EXPERIENCE (INCLUDING EXPERIENCE WITH E
ARBITRATIONS):
NUMBER OF ONGOING ARBITRATIONS:
CIRCUMSTANCES DISCLOSING ANY PAST OR PRESENT
RELATIONSHIP WITH OR INTEREST IN ANY OF THE
PARTIES OR IN RELATION TO THE SUBJECT-MATTER F
IN DISPUTE, WHETHER FINANCIAL, BUSINESS,
PROFESSIONAL OR OTHER KIND, WHICH IS LIKELY TO
GIVE RISE TO JUSTIFIABLE DOUBTS AS TO YOUR
INDEPENDENCE OR IMPARTIALITY (LIST OUT):
CIRCUMSTANCES WHICH ARE LIKELY TO AFFECT
YOUR ABILITY TO DEVOTE SUFFICIENT TIME TO THE G
ARBITRATION AND IN PARTICULAR YOUR ABILITY TO
FINISH THE ENTIRE ARBITRATION WITHIN TWELVE
MONTHS (LIST OUT):"

H
876 SUPREME COURT REPORTS [2017] 11 S.C.R.

A "THE SEVENTH SCHEDULE
[See section 12 (5)]
Arbitrator's relationship with the parties or counsel
1. The arbitrator is an employee, consultant, advisor or has any
B other past or present business relationship with a party.
2. The arbitrator currently represents or advises one of the parties
or an affiliate of one of the parties.
3. The arbitrator currently represents the lawyer or law firm acting
as counsel for one of the parties.
c 4. The arbitrator is a lawyer in the same law firm which is
representing one of the parties.
5. The arbitrator is a manager, director or part of the management,
or has a similar controlling influence, in an affiliate of one of the
parties ifthe affiliate is directly involved in the matters in dispute
D
in the arbitration.
6. The arbitrator's law firm had a previous but terminated
involvement in the case without the arbitrator being involved himself
or herself.
E 7. The arbitrator's law firm currently has a significant commercial
relationship with one of the parties or an affiliate of one of the
parties.
8. The arbitrator regularly advises the appointing party or an
affiliate of the appointing party even though neither the arbitrator
p nor his or her firm derives a significant financial income therefrom.
9. The arbitrator has a close family relationship with one of the
parties and in the case of companies with the persons in the
management and controlling the company.
10. A close family member of the arbitrator has a significant
G financial interest in one of the parties or an affiliate of one of the
parties.
11. The arbitrator is a legal representative of an entity that is a
party in the arbitration.

H
HRD CORPORATION v. GAIL (INDIA) LIMITED 877
[R. F. NARIMAN, J.]

12. The arbitrator i.s a manager, director or part of the management, A
or has a similar controlling influence in one of the parties.
13. The arbitrator has a significant financial interest in one of the
parties or the outcome of the case.
14. The arbitrator regularly advises the appointing party or an·
affiliate of the appointing party, and the arbitrator or his or her B
firm derives a significant financial income therefrom.
Relationship of the arbitrator to the dispute
15. The arbitrator has given legal advice or provided an expert.
opinion on the dispute to a party or an affiliate of one of the parties. c
16. The arbitrator has previous involvement in the case.
Arbitrator's direct or indirect interest in the dispute.
17. The arbitrator holds shares, either directly or indirectly, in one
of the parties or an affiliate of one of the parties that is privately D
held.
18. A close family member of the arbitrator has a significant
financial interest in the outcome ofthe dispute.
19. The arbitrator or a close family member of the arbitrator has
a close relationship with a third party who may be liable to recourse E
on the part of the unsuccessful party in the dispute.
Explanation 1.-The term "close family member" refers to a
spouse, sibling, child, parent or life partner.
Explanation 2.-The term "affiliate" encompasses all companies
in one group of companies including the parent company. F
Explanation 3.-For the removal of doubts, it is clarified that it
may be the practice in certain specific kinds of arbitration, such
as maritime or commodities arbitration, to draw arbitrators from a
small, specialized pool. If in such fields it is the custom and practice
for parties frequently to appoint the same arbitrator in different G
cases, this is a relevant fact tcrbe taken into account while applying
the rules set out above'."
13. After the 2016 Amendment Act, a dichotomy is made by the
Act between persons who become "ineligible" to be. appointed as
H
878 SUPREME COURT REPORTS [20 I 7) 11 S.C.R.

A arbitrators, and persons about whom justifiable doubts exist as to their
independence or impartiality. Since ineligibility goes to the root of the
appointment, Section 12(5) read with the Seventh Schedule makes it
clear that if the arbitrator falls in any one of the categories specified in
the Seventh Schedule, he becomes "ineligible" to act as arbitrator. Once
he becomes ineligible, it is clear that, under Section 14(1)(a), he then
B
becomes dejure unable to perform his functions inasmuch as, in law, he
is regarded as "ineligible". In order to determine whether an arbitrator
is de ju re unable to perform his functions, it is not necessary to go to the
Arbitral Tribunal under Section 13. Since such a person would lack
inherent jurisdiction to proceed any further, an application may be filed
c under Section 14(2) to the Court to decide on the termination of his/her
mandate on this ground. As opposed to this, in a challenge where grounds
stated in the Fifth Schedule are disclosed, which give rise to justifiable
doubts as to the arbitrator's independence or impartiality, such doubts as
to independence or impartiality have to be determined as a matter of
D fact in the facts of the particular challenge by theArbitral Tribunal under
Section 13. If a challenge is not successful, and the Arbitral Tribunal
decides that there are no justifiable doubts as to the independence or
impartiality of the arbitrator/arbitrators, the Tribunal must then continue
the arbitral proceedings under Section 13(4) and make an award. It is
only after such award is made, that the party challenging the arbitrator's
E appointment on grounds contained in the Fifth Schedule may make an
application for setting aside the arbitral award in accordance with Section
34 on the aforesaid grounds. It is clear, therefore, that any challenge
contained in the Fifth Schedule against the appointment of Justice Doabia
and Justice Lahoti cannot be gone into at this stage, but will be gone into
F only after the Arbitral Tribunal has given an award. Therefore, we
express no opinion on items contained in the Fifth Schedule under which
the appellant may challenge the appointment of either arbitrator. They
will be free to do so only after an award is rendered by the Tribunal. ·
14. Confining ourselves to ineligibility; it is important to note that
the Law Commission by its 246'h Report of August, 2014 had this to say
G in relation to the amendments made to Section 12 and the insertion of
the Fifth and Seventh Schedules:
"59. The Commission has proposed the requirement of having
specific disclosures by the arbitrator, at the stage of his possible
appointment, regarding existence of any relationship or interest of
H
HRD CORPORATION v. GAIL (INDIA) LIMITED 879
[R. F. NARIMAN, J.]

any kind which is likely to give rise to justifiable doubts. The A
Commission has proposed the incorporation of the Fourth Schedule,
which has drawn from the Red and Orange lists of the IBA
Guidelines on Conflicts oflnterest in International Arbitration, and
which would be treated as a "guide" to determine whether
circumstances exist which give rise to such justifiable doubts. On B
the other hand, in terms of the proposed section 12 (5) of the Act
and the Fifth Schedule which incorporates the categories from
the Red list of the IBA Guidelines (as above), the person proposed
to be appointed as an arbitrator shall be ineligible to be so ; ·
appointed, notwithstanding any prior agreement to the contrary.
In the event such an ineligible person is purported to be appointed C
as an arbitrator, he shall be de jure deemed to be unable to perform
his functions, in terms of the proposed explanation to section 14.
Therefore, while the disclosure is required with respect to a
broader list of categories (as set out in the Fourth Schedule, and
as based on the Red and Orange lists of the IBA Guidelines), the D
ineligibility to be appointed as an arbitrator (and the consequent
de jure inability to so act) follows from a smaller and more serious
sub-set of situations (as set out in the Fifth Schedule, and as based
on the Red list of the IBA Guidelines).
60. The Commission, however, feels that real and genuine party
E
autonomy must be respected, and, in certain situations, parties
should be allowed to waive even the categories of ineligibility as
set in the proposed Fift.h Schedule. This could be in situatio~s of
family arbitrations or other arbitrations where a person commands
. the blind faith and trust of the parties to the dispute, despite the
existence of objective "justifiable doubts" regarding his F
independence and impartiality; To deal with such situations, the
Commission has proposed the proviso to section 12 (5), where
parties may, subsequent to disputes having arisen between
them, waive the applicability of the proposed Section 12 (5) by an
express agreement in writing. In all other cases, the general rule
in the proposed section 12 (5) must be followed. In the event the G
High Court is approached in connection with appointment of an
arbitrator, the Commission has proposed seeking the disclosure in
term~'of section 12 (1) and in which context the High Court or the
designate is to have "due regard" to the contents of such disclosure
in appointing the arbitrator." H
-
880 SUPREME COURT REPORTS [2017] 11 S.C.R.

A 15. The enumeration of grounds given in the Fifth and Seventh .
Schedules have been taken from the IBA Guidelines, particularly from
the Red and Orange Lists thereof. The aforesaid guidelines consist of
three lists. The Red List, consisting of non-waivable and waivable
guidelines, covers situations which are "more serious" and "serious",
the "more serious" objections being non-waivable. The Orange List, on
B
the other hand, is a list of situations that may give rise to doubts as to the
arbitrator's impartiality or independence, as a consequence of which the
arbitrator has a duty to disclose such situations. The Green List is a list
of situations where no actual conflict of interest exists from an objective
point of view, as a result of which the arbitrator has no duty of disclosure.
C These guidelines were first introduced in the year 2004 and have
thereafter been amended, after seeing the experience of arbitration
worldwide. In Part 1 thereof, general standards regarding impartiality,
independence and disclosure are set out. General principle 1 reads as
follows:
D "IBA Guidelines on Conflicts of Interest in International
Arbitration
( 1) General Principle:
Every arbitrator shall be impartial and independent of the parties
at the time of accepting an appointment to serve and shall remain
E so until the final award has been rendered or the proceedings
have otherwise finally terminated."
On "conflicts of interest", guidelines laid down are as follows:
"(2) Conflicts of Interest
F (a) An arbitrator shall decline to accept an appointment or, if the
arbitration has already been commenced, refuse to continue to
act as an arbitrator, if he or she has any doubt as to his or her
ability to be impartial or independent.
(b) The same principle applies if facts or circumstances exist, or
G have arisen since the appointment, which, from the point of view
of a reasonable third person having knowledge of the relevant
facts and circumstances, would give rise to justifiable doubts as
to the arbitrator's impartiality or independence, unless the parties
have accepted the arbitrator in accordance with the requirements
set out in General Standard 4.
H
HRD CORPORATION v. GAIL (INDIA) LIMITED 881
[R. F. NARIMAN, J.]

(c) Doubts are justifiable if a reasonable third person, having A
knowledge of the relevant facts and circumstances, would reach
the conclusion that there is a likelihood that the arbitrator may be
influenced by factors other than the merits of the case as presented
by the parties in reaching his or her decision.
(d) Justifiable doubts necessarily exist as to the arbitrator's B
impartiality or independence in any of the situations described in
the Non-Waivable Red List."
16. In Voestalpine Schienen GmbH v. Delhi Metro Rail
Corporation Ltd., (2017) 4 SCC 665 at 687-689, in the context of a
Section 11 application made under the Act, this Court had occasion to c
delve into the independence and impartiality· of arbitrators and the
guidelines that are laid down in the Fifth and Seventh Schedule. This
Court stated:
"20. Independence and impartiality of the arbitrator are the
hallmarks of any arbitration proceedings. Rule against bias is one D
of the fundamental principles of natural justice which applied to
all judicial and quasi-judicial proceedings. It is for this reason that
notwithstanding the fact that relationship between the parties to
the arbitration and the arbitrators themselves are contractual in
nature and the source of an arbitrator's appointment is deduced
from the agreement entered into between the parties, P
notwithstanding the same non-independence and non-impartiality
of such arbitrato((though contractually agreed upon) would render
him ineligible to conduct the arbitration. The genesis behind this
rational is that even when an arbitrator is appointed in terms of
contract and by the parties to the contract, he is independent of F
the parties. Functions and duties require him to rise above the
partisan interest of the parties and not to act in, or so as to further,
the particular interest of either parties. After all, the arbitrator has
adjudicatory role to perform and, therefore, he must be independent
of parties as well as impartial. The United Kingdom Supreme
Court has beautifully highlighted this aspect in Hashwani v. Jivraj G
[Hashwani v. Jivraj, (2011) 1 WLR 1872 : 2011 UKSC 40] in
the following words: (WLR p. 1889, para 45)
"45 . ... the dominant purpose of appointing an arbitrator or
arbitrators is the impartial resolution of the dispute between
H
882 SUPREME COURT REPORTS [2017] l l S.C.R.

A the parties in accordance with the terms of the agreement
and, although the contract between the parties and the
arbitrators would be a contract for the provision of personal
services, they were not personal services under the direction
of the parties."
B 21. Similarly, Cour de Cassation, France, in a judgment delivered
in 1972 in Consorts Ury [Fouchard, Gaillard, Goldman on
lntemational Commercial Arbitration 562 (Emmanuel GaiJlard
& John Savage eds., 1999) {quoting Cour de cassation [Cass.]
[Supreme Court for judicial matters] Consorts Ury v. S.A. des
Galeries Lafayette, Cass. 2e civ., 13-4-1972, JCP, Pt. II, No.
c 17189 (1972) (France)}], underlined that:
"an independent mind is indispensable in the exercise of judicial
power, whatever the source of that power may be, and it is
one of the essential qualities of an arbitrator."

D 22. Independence and impartiality are two different concepts. An
arbitrator may be independent and yet, lack impartiality, or vice
versa. Impartiality, as is welJ accepted, is a more subjective concept
as compared to independence. Independence, which is more an
objective concept, may, thus, be more straightforwardly ascertained
by the parties at the outset of the arbitration proceedings in 1ight
E of the circumstances disclosed by the arbitrator, while partiality
will more likely surface during the arbitration proceedings.
23. It also cannot be denied that the Seventh Schedule is based on
IBA guidelines which are clearly regarded as a representation of
international based practices and are based on statutes, case law
F and juristic opinion from a cross-section on jurisdiction. It is so
mentioned in the guidelines itself.
24. xxx xxx xxx
25. Section 12 has been amended with the objective to induce
neutrality of arbitrators viz. their independence and impartiality.
G
The amended provision is enacted to identify the "circumstances"
which give rise to 'justifiable doubts" about the independence or
impartiality of the arbitrator. If any of those circumstances as
mentioned therein exists, it wilJ give rise to justifiable apprehension
of bias. The Fifth Schedule to the Act enumerates the grounds
H
HRD CORPORATION v. GAIL (INDIA) LIMITED 883
[R. F. NARIMAN, J.]

which.may give rise to justifiable doubts of this nature. Likewise, A
the Seventh Schedule mentions those circumstances which would
attract the provisions of sub-section (5) of Section 12 and nullify
any prior agreement to the contrary. In the context of this case, it
is relevant to mention that only if an arbitrator is an' employee, a
consultant, an advisor or has any past or present business B
relationship with a party, he is rendered ineligible to act as an
arbitrator. Likewise, that person is treated as incompetent to
perform the role of arbitrator, who is a manager, director or part
of the management or has a single controlling influence in an
affiliate of one of the parties if the affiliate is directly inv,olved in
the matters in dispute in the arbitration. Likewise, persons who C
regularly advised the appointing party or affiliate of the appointing
party are incapacitated. A comprehensive list is enumerated in
Schedule 5 and Schedule 7 and admittedly the persons empanelled
by the respondent are not covered by any of the items in the said
· list."
D
17. It will be noticed that Items 1 to 19 of the Fifth Schedule are
identical with the aforesaid items in the Seventh Schedule. The only
reason that these items also appear in the Fifth Schedule is for purposes
of disclosure by the arbitrator, as unless the proposed arbitrator discloses
in writing his involvement in terms ofltems 1to34 of the Fifth Schedule,
such disclosure would be lacking, in which case the parties would be put E
at a disadvantage as such information is often within the personal
knowledge of the arbitrator only. It is for this reason that it appears that
Items 1 to 19 also appear in the Fifth Schedule.
18. Shri Divan is right in drawing our attention to the fact that the
246'h Law Commission Report brought in amendments to the Act F
narrowing the grounds of challenge co-terminus with seeing that
independent, impartial and neutral arbitrators are appointed and that,
therefore, we must be careful in preserving such independence,
impartiality and neutrality of arbitrators. In fact, the same Law
. Commission Report has amended Sections 28 and 34 so as to narrow G
grounds of challenge available under the Act. The judgment in ONGC
v. Saw Pipes Ltd, (2003) 5 SCC 705, has been expressly done away
with. So has the judgment in ONGC v. Western Geco International
Ltd., (2014) 9 SCC 263. Both Sections 34 and 48 have been brought
back to the position of law contained in Renusagar Power Plant Co
H
884 SUPREME COURT REPORTS [2017] 11 S.C.R.

A Ltd. v. General Electric Co., (1994) Supp (1) SCC 644, where "public
policy" will now include only two of the three things set out therein, viz.,
"fundamental policy oflndian law" and "justice or morality". The ground
relating to "the interest oflndia" no longer obtains. "Fundamental policy
of Indian law" is now to be understood as laid down in Renusagar
(supra). "Justice or morality" has been tightened and is now to be
B
understood as meaning only basic notions of justice and morality i.e.
such notions as would shock the conscience of the Court as understood
in Associate Builders v. Delhi Development Authority, (2015) 3
SCC 49. Section 28(3) has also been amended to bring it in line with the
judgment of this Court in Associate Builders (supra), making it clear
c that the construction of the terms of the contract is primarily for the
arbitrator to decide unless it is found that such a construction is not a
possible one.
19. Thus, an award rendered in an international commercial
arbitration - whether in India or abroad - is subject to the same tests
D qua setting aside under Section 34 or enforcement under Section 48, as
the case may be. The only difference is that in an arbitral award governed
by Part I, arising out of an arbitration other than an international
commercial arbitration, one more ground of challenge is available viz.
patent illegality appearing on the face of the award. The ground of patent
illegality would not be established, if there is merely an erroneous
E application of the law or a re-appreciation of evidence.

20. However, to accede to Shri Divan's submission that because
the grounds for challenge have been narrowed as aforesaid, we must
construe the items in the Fifth and Seventh Schedules in the most
expansive manner, so that the remotest likelihood of bias gets removed,
F is not an acceptable way of interpreting the Schedules. As has been
pointed out by us hereinabove, the items contained in the Schedules owe
their origin to the IBA Guidelines, which are to be construed in the light
of the general principles contained therein - that every arbitrator shall
be impartial and independent of the parties at the time of accepting his/
G her appointment. Doubts as to the above are only justifiable if a
reasonable third person having knowledge of the relevant facts and
circumstances would reach the conclusion that there is a likelihood that
the arbitrator may be influenced by factors other than the merits of the
case in reaching his or her decision. This test requires taking a broad
common-sensical approach to the items stated in the Fifth and Seventh
H
fIRD CORPORATION v. GAIL (INDIA) LIMITED 885
[R. F. NARIMAN, J.]

Schedules. This approach would, therefore, require a fair construction A
of the words used therein, neither tending to enlarge or restrict them
unduly. It is with these prefatory remarks that we proceed to deal with
the arguments of both sides in construing the language of the Seventh
Schedule.
21. Coming to the challenge in the present case, Justice Lahoti's B
appointment is challenged on the ground that the arbitrator has been an
advisor to GAIL in another unconnected matter and, therefore, Justice
Lahoti should be removed. In his disclosure statement made on 24.11.2016,
Justice Lahoti had said:
"That on a legal issue between GAIL and another Public Sector c
Undertaking, an opinion was given by me to GAIL, in the year
· 2014, but it has no concern with respect to the present matter. I
am an Arbitrator in a pending matter between M/s. Pioneer Power
· Limited and GAIL (India) Limited,"
22. Shri Divan has pressed before us that since on a legal issue D
between GAIL and another public sector undertaking an opinion had
been given by Justice Lahoti to GAIL in the year 2014, which had no
concern with respect to the present matter, he would stand disqualified
under Item 1 of the Seventh Schedule. Items 8 and 15 were also faintly
argued as interdicting Justice Lahoti's appointment. Item 8 would have
no application as it is nobody's case that Justice Lahoti "regularly" E
advises the respondent. And Item 15 cannot apply as no legal opinion
qua the dispute at hand was ever given. On reading Item 1 of the
Seventh Schedule, it is clear that the item deals with "business
relationships". The words "any other" show that the first part ofltem
1 also confines "advisor" to a "business relationship". The arbitrator F
must, therefore, be an "advisor" insofar as it concerns the business of a
party. Howsoever widely construed, it is very difficult to state that a
professional relationship is equal to a business relationship, as, in its widest
sense, it would include commercial relationships of all kinds, but would
not include legal advice given. This becomes clear if it is read along with
Items 2, 8, 14 and 15, the last item specifically dealing with "legal advice". G
Under Items 2, 8 and 14, advice given need not be advice relating to
business but can be advice of any kind. The importance of contrasting
Item l with Items 2, 8 and 14 is that the arbitrator should be a regular
advisor under items 2, 8 and 14 to one of the parties or the appointing
party or an affiliate thereof, as the case may. be. Though the word H
886 SUPREME COURT REPORTS [2017] l l S.C.R.

A "regularly" is missing from Items 1 and 2, it is clear that the arbitrator, if
he is an "advisor", in the sense of being a person who has a business
relationship in Item I, or is a person who "currently" advises a party or
his affiliates in Item 2, connotes some degree of regularity in both items.
The advice given under any of these items cannot possibly be one opinion
given by a retired Judge on a professional basis at arm's length. Something
B
more is required, which is the element of being connected in an advisory
capacity with a party. Since Justice Lahoti has only given a professional
opinion to GAIL, which has no concern with the present dispute, he is
clearly not disqualified under Item I.
23. Coming to Justice Doabia's appointment, it has been vehemently
c argued that since Justice Doabia has previously rendered an award
between the same parties in an earlier arbitration concerning the same
disputes, but for an earlier period, he is hit by Item 16 of the Seventh
Schedule, which states that the arbitrator should not have previous
involvement "in the case". From the italicized words, it was sought to
D be argued that "the case" is an ongoing one, and a previous arbitration
award delivered by Justice Doabia between the same parties and arising
out of the same agreement would incapacitate his appointment in the
present case. We are afraid we are unable to agree with this contention.
In this context, it is important to refer to the IBA Guidelines, which are
the genesis of the items contained in the Seventh Schedule. Under the
E waivable Red List of the IBA Guidelines, para 2.1.2 states:

"The Arbitrator had a prior involvemerit in the dispute."
24. On reading the aforesaid guideline and reading the heading
whiCh appears with Item 16, namely "Relationship of the arbitrator to
F the dispute", it is obvious that the arbitrator has to have a previous
involvement in the very dispute contained in the present arbitration.
Admittedly, Justice Doabia has no such involvement. Further, Item 16
must be read along with Items 22 and 24 of the Fifth Schedule. The
disqualification contained in Items 22 and 24 is not absolute, as an
arbitrator who has, within the past three years, been appointed as arbitrator
G on two or more occasions by one of the parties or an affiliate, may yet
not be disqualified on his showing that he was independent and impartial
on the earlier two occasions. Also, if he currently serves or has served
within the past three years as arbitrator in another arbitration on a related
issue, he may be disqualified under Item 24, which must then be contrdsted
H with Item 16. Item 16 cannot be read as including previous involvements
HRD CORPORATION v. GAIL (INDIA) LIMITED 887
[R. F. NARIMAN, J.]

in another arbitration on a related issue involving one of the parties as A
otherwise Item 24 will be rendered largely ineffective. It must not be
forgotten that Item 16 also appears in the Fifth Schedule and has,
therefore, to be harmoniously read with Item 24. It has also been argued
by learned counsel appearing on behalf of the respondent that the
expression "the arbitrator" in Item 16 cannot possibly mean "the B
arbitrator" acting as an arbitrator, but must mean that the proposed
arbitrator is a person who has had previous involvement in the case in
some other avatar. According to us, this is a sound argument as "the
arbitrator" refers to the proposed arbitrator. This becomes clear, when
contrasted with Items 22 and 24, where the arbitrator must have served
"as arbitrator" before he can be disqualified. Obviously, Item 16 refers C
to previous involvement in an advisory or other capacity in the very
dispute, but not as arbitrator. It was also faintly argued that Justice
Doabia was ineligible under Items 1and15. Appointment as an arbitrator
is not a "business relationship" with the respondent under Item 1. Nor is
the delivery of an award providing an expert "opinion" i.e. advice to a D
party covered by Item 15.
25. The fact that Justice Doabia has already rendered an award
in a previous arbitration between the parties would not, by itself, on the
ground of reasonable likelihood of bias, render him ineligible to be an
arbitrator in a subsequent arbitration. As has been stated in H. v. L &
others, [2017] 1 W.L.R. 2280 at 2288-2289: E

"26. If authority were needed it is to be found in AMEC Capital
Projects Ltd v Whitefriars City Estates Ltd [2005] 1 All ER 723.
An adjudicator had decided a case withoutjurisdiction as a result
of defects in the procedural mechanism for his appointment. His
adjudication was set aside and he was then reappointed to decide F
the same dispute, between the same,parties, and decided it in the
same way. At first instance it was held that his second adjudication
should be set aside for apparent bias because, amongst other things, .
he had already decided the same issue. The Court of Appeal
reversed the decision. Dyson LJ said: G
"20. In my judgment, the mere fact that the tribunal has
previously decided the issue is not of itself sufficient to justify
a conclusion of apparent bias. Something more is required.
Judges are assumed to be trustworthy and to understand that
they should approach every case with an open mind. The same H
888 SUPREME COURT REPORTS [2017] 11 S.C.R.

A applies to adjudicators, who are almost always professional
persons. That is not to say that, if it is asked to re-determine an
issue and the evidence and arguments are merely a repeat of
what went before, the tribunal will not be likely to reach the
same conclusion as before. It would be unrealistic, indeed
absurd, to expect the tribunal in such circumstances to ignore
B
its earlier decision and not to be inclined to come to the same
conclusion as before, particularly ifthe previous decision was
carefully reasoned. The vice which the law must guard against
is that the tribunal may approach the rehearing with a closed
mind. If a judge has considered an issue carefully before
c reaching a decision on the first occasion, it cannot sensibly be
said that he has a closed mind if, the evidence and arguments
being the same as before, he does not give as careful a
consideration on the second occasion as on the first. He will,
however, be expected to give such reconsideration of the matter
as is reasonably necessary for him to be satisfied that his first
D
decision was correct. As I have said, it will be a most unusual
case where the second hearing is for practical purposes an
exact rerun of the first.
21. The mere fact that the tribunal has decided the issue before
is therefore not enough for apparent bias. There needs to be
E something of substance to lead the fair-minded and informed
observer to conclude that there is a real possibility that the
tribunal will not bring an open mind and objective judgment to
bear."
27. Those comments apply with as much force to arbitrators in
F international reinsurance arbitration as they do to adjudicators in
building disputes. Just as an arbitrator or adjudicator can be
expected to bring an open mind and objective judgment to bear
when redetermining the same question on the same evidence
between the same parties, it is all the more so where the evidence
G is different and heard in a reference between different parties.
28. The position in Bermuda Form arbitrations is accurately
summarised in a leading textbook, Liability Insurance in
International Arbitration, 2nd ed (2011), at para 14.32 in these
terms:
H
HRD CORPORATION v. GAIL (INDIA) LIMITED 889
[R. F. NARIMAN, J.]

"14.32 Commencing a Bermuda Form Arbitration A

The decision in Locabail (UK) Ltd v Bayfield Properties Ltd
[2000] QB 451, and the foregoing discussion, is also relevant
in the fairly common situation where a loss, whether from boom
or batch, gives rise to a number of arbitrations against different
insurers who have subscribed to the same programme. A B
number of arbitrations may be commenced at around the same
time, and the same arbitrator may be appointed at the outset in
respect of all these arbitrations. Another possibility is that there
are successive arbitrations, for 'example because the
policyholder wishes to see the outcome of an arbitration on the C
first layer before embarking on further proceedings. A
policyholder, who has been successful before one tribunal, may
then be tempted to appoint one of its members (not necessarily
its original appointee, but possibly the chairman or even the
insurer's original appointee) as arbitrator in a subsequent
arbitration. Similarly, if insurer A has been successful in the D
first arbitration, insurer B may in practice learn of this success
and the identity of the arbitrators who have upheld insurer A's
arguments. It follows from Locabail and AMEC Capital
Projects Ltd v Whitefriars City Estates Ltd [2005] 1 All ER
723 that an objection to the appointment of a member of a E
previous panel would not be sustained simply on the basis that
the arbitrator had previously decided a particular issue in favour
of one or other party. It equally follows that an arbitrator can
properly be appointed at the outset in respect of a number of
layers of coverage, even though he may then decide the dispute
under one layer before hearing the case on another layer." F

26. We were, however, referred to Russell on Arbitration (23nt
edition), in which the learned author has referred to the ground of bias in
the context of previous views expressed by an arbitrator. In Chapter 4-
124, the learned author states as follows:
G
"In certain circumstances, previously expressed views of an
arbitrator, which suggest a certain pre-disposition to a particular
course of action, outcome or in favour of a party, can constitute
grounds for removal. One of the Locabail v. Bayfield applications
H
890 SUPREME COURT REPORTS [2017] II S.C.R.

A ([2000] 1 All E.R. 65 at 92-93) against a judge was successful on
this basis. The judge had written four strongly worded articles
which led the Court to conclude that an objective apprehension of
bias may arise on the part of one of the parties. However, a
challenge against a sole arbitrator in a trade arbitration which
alleged apparent bias because the arbitrator had previously been
B
involved in a dispute with one of the parties failed. The judge
found this on the facts to be no more than "an ordinary incident of
commercial life" occurring in the relatively small field of trade
arbitrations where it was thought the parties and arbitrators were
quite likely to have had prior dealing with each other (Rustal
c Trading Ltd. v. Gill and Duffas SA [2000] 1 Lloyd's Rep. 14).
Similarly, the fact that an insurance arbitrator had previously given
a statement in another arbitration (and may have been called to
give evidence subsequently) about the meaning of a standard form
clause which might have had a tentative bearing on the present
arbitration would not give grounds for removal (Argonaut
D
Insurance Co v. Republic Insurance Co [2003) EWHC 547).''

27. The judgment referred to in Russell is reported in Locabail v.
Bayfield, (2000) 1 All E.R. 65. In paragraph 89 thereof, the Court of
Appeal stated:
E "We have found this a difficult and anxious application to resolve.
There is no suggestion of actual bias on the part of the recorder.
Nor, quite rightly, is any imputation made as to his good faith. His
voluntary disclosure of the matters already referred to show that
he was conscious of his judicial duty. The views he expressed in
F the articles relied on are no doubt shared by other experienced
commentators. We have, however, to ask, taking a broad
commonsense approach, whether a person holding the pronounced
pro-claimant anti-insurer views expressed by the recorder in the
articles might not unconsciously have leant in favour of the claimant
and against the defendant in resolving the factual issues between
G them. Not without misgiving, we conclude that there was on the
facts here a real danger of such a result. We do not think a lay
observer with knowledge of the facts could have excluded that
possibility, and nor can we. We accordingly grant permission to
appeal on this ground, allow the defendant's appeal and order a
H
HRD CORPORATION v. GAIL (INDIA) LIMITED 891
[R. F. NARIMAN, J.]

retrial. We should not be thought to hold any view at all on the A
likely or proper outcome of any retrial."

28. We have not been shown anything to indicate that Justice
Doabia would be a person holding a pronounced anti-claimant view as in
Locabail (supra). Therefore, we are satisfied that there is no real
possibility that Justice Doabia will not bring an open mind and objective B
judgment to bear on arguments made by the parties in the fourth
arbitration, which may or may not differ from arguments made in the
third arbitration.

29. The appointment of Justice Doabia was also attacked on the C
ground that he had not made a complete disclosure, in that his disclosure
sta_tement did not indicate as to whether he was likely to devote sufficient
time to the arbitration and would be able to complete it within 12 months.
We are afraid that we cannot allow the appellant to raise this point at
this stage as it was never raised earlier. Obviously, if Justice Doabia did
not indicate anything to the contrary, he would be able to devote sufficient. D
time to the arbitration and complete the process within 12 months.

30. It was also faintly urged that the arbitrator must without delay
make .a disclosure to the parties in writing. Justice Doabia's disclosure
was by a letter dated October 31, 2016 which was sent to the Secretary
E
General of the International Centre for Alternative Dispute Resolution
(ICADR). It has come on record that for no fault of Justice Doabia, the
ICADR, through oversight, did not handover the said letter or a copy
thereof to the.appellant until November 24, 2016, which is stated in its
letter dated November 29, 2016. This contention also, therefore, need
not detain us. F

31. It was then argued that under Explanation 3 to the Seventh
Schedule, maritime or commodities arbitration may draw arbitrators from
a small, specialized pool, in which case it is the custom and practice for
parties to appoint the same arbitrator in different cases. This is in contrast
to an arbitrator in other cases where he should not be appointed more G
than once. We are afraid that this argument again cannot be
countenanced for the simple reason that Explanation 3 stands by itself
a
_and has to be applied as relevant fact to be taken into account. It has
no indirect bearing on any of the other items mentioned in the Seventh
Schedule. H
892 SUPREME COURT REPORTS [2017] ll S.C.R.

A 32. This being the case, we are satisfied that the learned single
Judge's judgment requires no interference. The appeals are, accordingly,
dismissed.

Nidhi Jain Appeals dismissed.