TMI Blog2019 (1) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... ” with the party is also disqualified. The word “other” used in Entry 1, would indicate a relationship other than an employee, consultant or an advisor. The word “other” cannot be used to widen the scope of the entry to include past/former employees. It is also relevant to state that the appointment had been made prior to the 2015 Amendment Act when the Fifth Schedule was not inserted. Hence, the objection raised by the ICA was untenable on that ground also. The mandate of the three-member arbitral tribunal constituted under the ICA Rules on 05.12.2015 stands terminated. The Sole Arbitrator shall proceed in continuation of the previously constituted arbitral tribunal. The material already on record shall be deemed to have been received by the Sole Arbitrator - appeal disposed off. - Civil Appeal No. 27/2019 (Arising out of S.L.P.(C) No. 20201 of 2018) - - - Dated:- 3-1-2019 - Abhay Manohar Sapre And Indu Malhotra, JJ. JUDGMENT Indu Malhotra, J. Leave granted. 1. The present Civil Appeal has been filed by the Appellant State of Haryana to challenge the Order dated 01.03.2018 passed by the High Court of Punjab and Haryana at Chandigarh in C.R. No. 3279/2017. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no rule which prohibited a former employee from being an arbitrator, and there could not be any justifiable doubt with respect to his impartiality since the nominee arbitrator had retired over 10 years ago. On 24.09.2015, Respondent No. 1 - M/s. G. F. Toll Road Pvt. Ltd. raised an objection regarding the independence and impartiality of the Appellant s nominee arbitrator Mr. M.K. Aggarwal. Respondent No. 2 ICA forwarded the said objection to the Appellant State. 2.5. The Respondent No. 2 ICA vide its Letter dated 30.10.2015 reiterated that it has been firmly established that Mr. M.K. Aggarwal had a direct relationship with the Appellant State as its former employee, which may raise justifiable doubts as to his independence and impartiality in adjudicating the dispute. The Respondent No. 2 ICA stated that it was in the process of appointing an arbitrator in place of Mr. M.K. Aggarwal and its decision shall be communicated to the Appellant. 2.6. In response, the Appellant State vide Letter dated 16.11.2015 requested the Respondent No. 2 ICA for a period of 30 days to appoint a substitute arbitrator. In the meanwhile, the Respondent No. 2 ICA vide it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he pleadings. 3.1. The High Court while considering the application under Section 15 failed to take note of the provisions of Section 15(2) of the Act. Section 15(2) provides that a substitute arbitrator must be appointed according to the rules that are applicable for the appointment of the arbitrator being replaced. This would imply that the appointment of a substitute arbitrator must be according to the same procedure adopted in the original agreement at the initial stage. Section 15(2) of the Act reads as under : 15. Termination of mandate and substitution of arbitrator.- (1) (2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. (Emphasis supplied) 3.2. The provisions of Section 15(2) require that when the mandate of an arbitrator terminates either by his withdrawal from office, or pursuant to an agreement by the parties, or for any reason, a substitute arbitrator shall be appointed according to the rules applicable to the appointment of the arbitrator being replaced. This Court in ACC Ltd. v. Global Cemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hings being equal) the objection will be. The Court of Appeal in Re Medicaments and related Classes of Goods (No.2) 2002 (1) All ER 465 while propounding the real danger test for bias held that : The question is whether the fairminded and informed observer, having considered the facts, would conclude that there was a real possibility that the Tribunal was biased. 3.9. The 1996 Act does not disqualify a former employee from acting as an arbitrator, provided that there are no justifiable doubts as to his independence and impartiality. The fact that the arbitrator was in the employment of the State of Haryana over 10 years ago, would make the allegation of bias clearly untenable. 3.10. The present case is governed by the pre-amended 1996 Act. Even as per the 2015 Amendment Act which has inserted the Fifth Schedule to the 1996 Act which contains grounds to determine whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an arbitrator. The first entry to the Fifth Schedule reads as under : Arbitrator s relationship with the parties or counsel 1. The Arbitrator is an employee, consultant, advisor or has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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