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Report No. 176

2.40.3 Removal of arbitrators:

Suggestion rejected.

It has been suggested that the Act does not contain a provision for 'removal' of an arbitrator. Such a power it is said is necessary in case of purely domestic and ad hoc international arbitrations (i.e. non-institutional). A separate provision, it is suggested, is necessary for institutional arbitrations. We consider these procedures are suitable only for purely domestic arbitrations.

Section 24(1) of the English Act deals with removal of the arbitrator by the Court on the following grounds:

"(a) that circumstances exist that give rise to justifiable doubts as to his impartiality.

(b) that he does not possess the qualifications required by the arbitration agreement

© that he is physically or mentally incapable of conducting proceedings or there are justifiable doubts as to his capacity to do so;

(d) that he has refused or failed:

(i) properly to conduct the proceedings, or

(ii) to use all reasonable dispatch in conducting the proceedings or making the award, and that substantial injustice has been or will be caused to the applicant, if he is not removed."

A separate procedure, it is suggested, is necessary so far as institutional arbitration (domestic) is concerned. In these types of cases, unless the remedy before the concerned institution as per its rules are exhausted, remedy by Court cannot be permitted. Sec. 24(2) of the English Act covers such cases and reads as follows:

"Sec. 24: If there is an arbitral or other institution or person vested by the parties with power to remove the arbitrator, the Court shall not exercise its powers of removal unless satisfied that the applicant has first exhausted any available recourse to that institution or person."

Again Sec. 24(3) of the English Act enables the arbitration proceedings to go on pending an application. Sec. 24(4) deals with the fee payable to the arbitrator in case of such removal. The ICC Rules, 1998 too make a provision for 'removal' by the ICC Court (which provision is not there in the Model Law), apart from removal upon challenge by the parties.

While rule 12(i) deals with challenge by parties, Rule 12(ii) deals with the ICC Courts' power of removal. These provisions read as follows: Rule 12:

(i) An arbitrator shall be replaced upon his death, upon the acceptance by the Court by the arbitrator's resignation, upon acceptance by the Court of a challenge or upon the request of all the parties.

(ii) An arbitrator shall also be replaced on the Court's own initiative when it decides that he is prevented by de jure or de facto from fulfilling his functions, or that he is not fulfilling his functions in accordance with the rules or within prescribed time limit".

It may be noted that clause (i) of the ICC Rules above mentioned also refers also to a situation where all the parties request for a change of the arbitrators. Fouchard etc. (1999), support a provision for removal strongly in para 998 as follows:

"Although it is rarely applied, this provision is a powerful deterrent, and is perfectly justified. Although in their capacity as private Judges, arbitrators may enjoy a form of immunity vis-à-vis the parties, they remain contractually reliable for the proper performance of their functions to the institution which appointed them or confirmed their appointment. That institution could incur liability towards the parties if it were established that it had been at fault or negligent in organizing and supervising the arbitration."

We do not think any special provision for removal of arbitrators is necessary. Where a provision for challenge before the arbitral tribunal and then before the court is not there, such a provision may be necessary. But where, as in the 1996 Act, there is a provision of challenge before the Tribunal and then before the Court, there is no need to duplicate the procedure by including another procedure for removal.

The Arbitration and Conciliation (Amendment) Bill, 2001 Back

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