ALLAHABAD HIGH COURT: ALLEGATIONS ON ARBITRATOR'S INDEPENDENCE UNDER ITEM 24 OF 5TH SCHEDULE OF ARBITRATION ACT IS NOT AUTOMATICALLY A GROUND FOR DISQUALIFICATION

The Allahabad High Court in the case Gepdec Infratech Limited Thru Authorized Representative vs U.P.Power Transmission Corporation Ltd. Thru Superintending Engineer Lucknow observed and has held that the allegation under Item No. 24 of the Fifth Schedule of the Arbitration and Conciliation Act, 1996 does not automatically disqualify the arbitrator without disclosing any specific relationship between the arbitrator and the party.

The Item No.24 of the Fifth Schedule states that doubts about an arbitrator's independence or impartiality can arise if they currently serve or have served as an arbitrator in another arbitration on a related issue which involves one of the parties or an affiliate of one of the parties within the past three years.

FACTS OF THE CASE:

The Allahabad High Court, High Court in an order, suggested by the Former judge of this court, Justice V.C. Gupta as an arbitrator to resolve the dispute between the parties.

Justice V.C. Gupta, in compliance with this order, conveyed his consent through a letter in accordance with the law.

The Respondent in the case approached the High Court and contended that the proposed arbitrator, Justice V.C. Gupta, is currently engaged in arbitrating a case between the Respondent, U.P. Power Transmission Corporation

Ltd., and SEW Infrastructure Ltd. thus, the said appointment was made by the High Court through an order in Civil Misc. Arbitration Application.

Further, the respondent argued that as per Item 24 of the Fifth Schedule of the Arbitration and Conciliation Act, 1996, Arbitration Act, the appointment of Justice V.C. Gupta may lead to justifiable doubts about his independence or impartiality.

The Appellant stated that the argument put forth by the Respondent was misconceived and untenable.