BCL SECURE PREMISES (P) LTD Vs. METRO RAILWAY

JUDGEMENT

(1.) In this case, we are concerned with the interpretation and application of Section 12(5) of the Arbitration and Conciliation Act, 1996 read with its Seventh Schedule. Section 12 (5) is set out below:

(2.) The Seventh Schedule to the Act specifies certain relationships. If a person who is intended to be appointed as an arbitrator falls in that relationship with a party he is ineligible to be appointed. The exact scope and implication of this provision has been recently explained in detail by the Supreme Court in the case of Voestalpine Schienen Gmbh vs. Delhi Metro Rail Corporation Ltd. decided by it on 10th February, 2017. Delivering the judgement of the Court Mr. Justice A.K.Sikri noted that by their letter dated 8th July, 2016 the respondent, Delhi Metro Rail Corporation Limited forwarded to the petitioner a list of five serving and retired officers belonging to the Delhi Development Authority (DDA) and Central Public Works Department (CPWD), to choose their nominee arbitrator from it. Thereafter, the respondent forwarded a list of about thirty one names which included retired officers of the Indian Railways with technical qualification and experience. The court noted that before amendment of the Arbitration and Conciliation Act, 1996 the Law Commission considered the requirement of neutrality of arbitrators. Arbitrators were required to the independent as well as impartial. The court observed.

(3.) Very often past officers of the government or government organisations with a great deal of technical expertise or professional knowledge are included in the panel so as to effectively arbitrate upon specified disputes.