Report No. 176
2.9.1 Grounds of challenge to the appointment of arbitrators - more details to be disclosed by proposed arbitrators:
Section 12 Section 12 deals with grounds of challenge to the appointment of an arbitrator while sec. 13 deals with the challenge procedure. Section 12(1) states that a person who is approached in connection with his possible appointment as an arbitrator shall disclose in writing "any circumstances likely to give rise to justifiable doubts as to his independence or impartiality".
Sub-section (2) of sec. 12 lays this responsibility on the arbitrator even during the course of arbitration proceedings. Sub section (3) of sec. 12 enables a party to challenge the arbitrator only if (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. Sub section (4) refers to one's own appointed arbitrator and he can be challenged only for reasons of which he becomes aware after the appointment is made.
While dealing with sec. 10A, the question of disqualification or rather lack of independence of named arbitrators, in cases where both parties are private parties and also where one of the parties is Government or a public sector undertaking or statutory corporation, has been considered separately in relation to clauses which enable the employee or any person having some business connection, to be appointed.