A Party To Dispute Cannot be Appointed as Arbitrator Even If The Arbitration Agreement Allows It: Kerala High Court

The Kerala High Court has held that neither a party to an Arbitration Agreement nor a person nominated by it can be nominated an arbitrator, even if the agreement expressly allows the same. With this notion, the Court went on to disregard the stipulations of the arbitration clause to the extent to which it allowed the lessor(respondent) to nominate the Arbitrator when the parties failed to arrive at a consensus nominee. “….subsequent to the amendments to the Act in the year 2016 – through which sub-section (5) was inserted into Section 12 – notwithstanding any agreement to the contrary, any person whose relationship with the parties falls under any of the categories in the seventh Schedule of the Act, is rendered ineligible to be appointed as an Arbitrator.” Justice Devan Ramachandran relied on the Supreme Court’s dictum in TRF limited v. Engineering projects Ltd. wherein the Apex Court had considered the effect of Section 12(5) of the Act and had unreservedly declared that neither a party to the disputes nor a person nominated by it can be appointed as an Arbitrator.