Recently, the Calcutta High Court, while dealing with the application filed under Section 14(2) read with Section 15 of the Arbitration and Conciliation Act, 1996 for the termination of the mandate of the learned arbitrator, observed that a counsel/Advocate, having accepted briefs from a law firm for some other client/litigant, cannot be per se be said to be ineligible or disqualified to act as an arbitrator and adjudicate disputes between parties who were never represented by the learned Arbitrator in a court of law and who were not personally known him, even if the lawyer/law firm representing a party may have briefed the learned Arbitrator, in his capacity of an Advocate in other matters.
Brief facts:
The factual matrix of the case is that the Petitioner filed an application under Section 14(2) read with Section 15 of the Arbitration and Conciliation Act, and prayed for the termination of the mandate of the learned Arbitrator, on the ground that the learned Arbitrator is de jure unable to act.
Contentions of the Petitioner:
The learned counsel appearing on behalf of the Petitioner contended that the Petitioner is not satisfied with the disclosure made by the learned Arbitrator as mandated by Schedule VI of the Act. It was furthermore contended that the learned arbitrator was asked to disclose whether the learned Arbitrator had been engaged as a counsel or continued to be engaged as a counsel by the advocate-on-record for the claimant, namely, M/s. Choudhury & Co. Advocates and the learned Arbitrator did not reply to the same. Moreover, it was submitted that there exist sufficient reasons to believe that the learned Arbitrator had been engaged on various occasions as counsel by the advocate-on-record for the claimant.
Observations of the Court:
The Court observed that Section 12(5) of the said Act provides that, notwithstanding any prior agreement to the contrary, any person whose relationship with the parties or counsel or the subject matter of the dispute falls under any of the categories specified in the VIIth schedule, shall be ineligible to be appointed as an arbitrator.
Moreover, the Petitioner challenged the appointment of the arbitrator on the strength of Categories 3 and 4 of the VIIth schedule which provides that the arbitrator shall not represent the lawyer or the law firm, acting as counsel for one of the parties. Which means that the learned Arbitrator should not have represented the law firm as its Advocate or counsel in any legal proceeding. The law firm should not be his client. Category 4 provides that the arbitrator should not be a lawyer of the same law firm which represents one of the parties. Which means, he should not be an employee or a partner, or in-house counsel of the law firm which represents any of the parties to an arbitral proceeding.
The Court furthermore observed that “no Arbitrator should be involved in any manner with one of the parties to the dispute and the arbitrator should neither represent the law firm or its lawyers in any litigation or have any personal relationship with them. A law firm briefing a counsel or an advocate in unrelated matters, stands in a different footing. This is a professional engagement.”
The Court noted that a counsel/Advocate, having accepted briefs from a law firm for some other client/litigant, cannot be per se be said to be ineligible or disqualified to act as an arbitrator and adjudicate disputes between parties who were never represented by the learned Arbitrator in a Court of law and who were not personally known him, even if the lawyer/law firm representing a party may have briefed the learned Arbitrator, in his capacity of an Advocate in other matters.
Based on these considerations, the court was of the opinion that the disclosure made by the learned arbitrator was adequate and sufficient compliance of law.
The decision of the Court:
With the above direction, the Court disposed of the application.
Case title: Damodar Valley Corporation vs. Aka Logistics Private Limited
Coram: Justice Shampa Sarkar
Case No: AP-COM/178/2025
Advocates for the Petitioner: Mr. Samrat Sen, Sr. Adv. Mr. Somdutta Bhattacharyya, Adv. Mr. Aritra Deb, Adv.
Advocates for the Respondent: Mr. Rajarshi Datta, Adv. Mr. Neelesh Chowdhury, Adv. Ms. Anuradha Poddar, Adv.
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