Between The Lines... July, 2017

I. "ONCE THE ARBITRATOR HAS BECOME INELIGIBLE BY OPERATION OF LAW, HE CANNOT NOMINATE ANOTHER AS AN ARBITRATOR": SUPREME COURT

The Hon'ble Supreme Court of India in the matter of TRF Limited vs. Energo Engineering Projects Ltd. (decided on July 3, 2017) dealt with a case in which an arbitrator under the arbitration clause became ineligible to act as an arbitrator owing to the amendment introduced to the Arbitration and Conciliation Act, 1996 (the "Act") in order to ensure the independence and impartiality of arbitrators. The Supreme Court had to decide whether such an arbitrator was also stripped of his powers to nominate an independent and impartial arbitrator.

Facts:

A purchase order was issued by the Respondent to the Appellant in relation to design, manufacturing, supply, etc. of several articles. An arbitration clause was incorporated in the purchase order. When disputes arose between the parties, the Appellant sought reference of the disputes to an