SC reserves verdict on whether person ineligible to be arbitrator can nominate another

New Delhi, Aug 30 (PTI) The Supreme Court on Friday reserved its verdict on the vexed legal question of whether a person ineligible to become an arbitrator can nominate another as one.

Before the arguments concluded, Solicitor General Tushar Mehta told a five-judge constitution bench headed by Chief Justice D Y Chandrachud that the focus should be on ensuring that arbitration as a mechanism to resolve disputes was strengthened.

During the arguments on Friday, the bench heard the submissions of several lawyers including senior advocates Mahesh Jethmalani, N K Kaul and Gourab Banerji.

“This is an issue where our focus on this side should be to ensure that arbitration as a mechanism is strengthened and, therefore, I started by saying that any arguments on either of the extremes would do harm to the cause which we are all concerned with,” Mehta told the bench, also comprising justices Hrishikesh Roy, P S Narasimha, J B Pardiwala and Manoj Misra.

The top court had on August 28 commenced hearing arguments on the complicated legal issue.

During the arguments on Thursday, the solicitor general told the bench that the government was interested in ensuring that arbitration as an alternative dispute resolution mechanism grows and whatever hindrances are present and preventing people from going for arbitration, especially the government agencies, are taken care of.

The bench had observed that there was a vital public and national interest in ensuring that the process of arbitration was fair.

It had heard submissions relating to provisions of the Arbitration and Conciliation Act, 1996, including the one on appointment of arbitrators.

The Law Commission of India’s 246th report which dealt with amendments to the 1996 Act was also referred to during the arguments.

Two references were made by three-judge apex court benches in 2021 for constitution of a larger bench to consider the issue.

The apex court had in 2017 and 2020 held that a person not eligible to become an arbitrator cannot nominate another person as one. However, in another matter in 2020, the top court had allowed the appointment made by a person who was ineligible to become an arbitrator.

On February 21, the Centre had told the apex court that an expert committee headed by former law secretary T K Vishwanathan has submitted its report on proposed reforms in the arbitration sector to the law ministry.

Amid a push for making India a hub of international arbitration, the government had set up an expert panel led by Vishwanathan to recommend reforms in the Arbitration and Conciliation Act in order to reduce the burden on courts.