Can a person ineligible to be an arbitrator nominate someone else? SC to examine in September

Requesting the court to adjourn the matter, Attorney General R Venkataramani said the Centre has set up an expert committee on June 14 to recommend reforms and the matter can be deferred for a while till the committee gives its report. -- Reports ETV Bharat's Sumit Saxena.

New Delhi: The Supreme Court said on Wednesday it will conduct the hearing on the legal question of whether a person who is ineligible to be an arbitrator can nominate another person as arbitrator, in September 2023.

Attorney General R Venkataramani submitted before a five-judge constitution bench headed by Chief Justice of India D Y Chandrachud that the Centre has set up an expert committee to examine the functioning of the arbitration law and it will recommend reforms in the 1996 Arbitration and Conciliation Act.

Requesting the court to adjourn the matter, Venkataramani said the Centre has set up an expert committee on June 14 to recommend reforms and the matter can be deferred for a while till the committee gives its report. Senior advocate Fali S Nariman, representing one of the parties, said deferment of the hearing will be preferable.

The court was considering the legal issue of whether a person who is ineligible to be an arbitrator can nominate another person as an arbitrator. The bench – also comprising justices Hrishikesh Roy, P S Narasimha, Pankaj Mithal, and Justice Manoj Misra – noted that the Attorney General contended that the issues which have been raised before the constitution bench will undoubtedly also come within the remit of the committee.

The bench said the government after examining the report of the committee would take a view on whether modification of legislation is warranted and said, “We direct that the references before the constitution bench be deferred by a period of two months”. After hearing brief submissions, the top court listed the matter for further hearing on September 13 and directed that it should be informed about the progress made on the matter on the next date.

The top court was considering two references, which were made in 2021 by three-judge benches for the constitution of a larger bench to examine the issue. In 2017 and 2020, the apex court held that a person not eligible to become an arbitrator cannot nominate another person as arbitrator. But in 2020, the top court allowed a person, who was ineligible to become an arbitrator, to make an appointment.