This blog is all about the practical aspects of arbitration. Throughout the Arbitration 101 series we’ve tried to answer the most basic and common questions the answers to which are a must have for advocates and law students alike.
Someday, a client might ask you where do you find an arbitrator? That would be the day you’d thank us for writing down the answer to this question. Right now, you probably can’t imagine how annoyed or disappointed your client would be if you would not be able to tell him the answer.
Most advocates and lawyers who have some experience might find the above question too simple or even a waste of time. But the fact is that a lot of law schools are incompetent at imparting a legal education.
Table of Contents
- Where to find an Arbitrator
- Powers and roles of an arbitrator
- Liabilities of an arbitrator
- Grounds for challenging the appointment of arbitrator
Where to find an Arbitrator
- One can find an arbitrator via net search on some of the arbitration providing institutions such as the Indian Council of Arbitration.
- A party can approach the Court for the appointment of an arbitrator.
The number of arbitrators is always an odd number:
- Each party picks one arbitrator and then those arbitrators together appoint one principal arbitrator for them; or
- Both the parties agree to appoint one arbitrator, failing which the Chief Justice appoints one arbitrator to them. 
Powers and roles of an arbitrator
Section 6 and 26 of the Arbitration and Conciliation Act, 1996 provides power to the Arbitrators.
The Arbitration and Conciliation Act gives broad powers to conduct the proceedings. These include powers to:
- Order interim measures;
- Appoint experts;
- Encourage settlements between the parties;
- Deliver award;
- Rule on existence and validity of an arbitration agreement;
- Decide merits of the case with the help of governmental laws; and
- Decide the admissibility of evidence and witnesses in the case.
They are encouraged to follow the path of natural justice while deciding cases.
Liabilities of an arbitrator
The Arbitration and Conciliation Act, 1996 is silent regarding the issue of immunity and liabilities of arbitrators. However, if a person is approached with the proposal to be appointed as an arbitrator, he should disclose in writing:
- Circumstances that may raise justifiable doubts as to his independence or impartiality in the case [Section12(1)(a)];
- Incapability to complete the arbitration in 12 months. [Section12(1)(b)].
Grounds for challenging the appointment of arbitrator
Section 12 of the Arbitration and Conciliation Act, 1996, states grounds for challenging the appointment of the arbitrator. The Fifth Schedule of the Act enlists grounds that give rise to justifiable doubts as to the independence or impartiality of arbitrators. Some grounds for challenging the appointment includes but are not limited to the following doubts:
- If the arbitrator has any past or present relationship or has any kind of interest in the party; or
- A close family member of the arbitrator has a significant financial interest in the outcome of the dispute; or
- He does not possess the qualification agreed by the parties.
NOTE: Refer to Section 12 and the Fifth Schedule of the Act for more information. You can find the Fifth Schedule below.
Section 12 of Arbitration and Conciliation Act, 1996: Grounds for challenge.—
- When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances likely to give rise to justifiable doubts as to his independence or impartiality.
- 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.
- An arbitrator may be challenged only if—
- circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or
- he does not possess the qualifications agreed to by the parties.
- 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.
Fifth Schedule of the Arbitration and Conciliation Act, 1996
The following grounds give rise to justifiable doubts as to the independence or impartiality of arbitrators:
Arbitrator’s relationship with the parties or counsel
1. The arbitrator is an employee, consultant, advisor or has any 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.
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 if the affiliate is directly involved in the matters in dispute 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.
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 nor his or her firm derives a significant financial income therefrom.