Once Person Empowered To Nominate Arbitrator Becomes Ineligible U/S 12(5), Matter Shall Not Be Referred To Arbitration: Patna High Court
3 months, 1 week ago

Once Person Empowered To Nominate Arbitrator Becomes Ineligible U/S 12(5), Matter Shall Not Be Referred To Arbitration: Patna High Court

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The Patna High Court bench of Chief Justice K Vinod Chandran has held that once the person empowered to nominate an arbitrator under an arbitration clause becomes ineligible to nominate the arbitrator, the matter shall not referred to the Arbitration. On the other hand it is the case of the respondent that the Patna High Court in State of Bihar v. Kashish Developers Limited, 2024 while interpreting the clause of a same nature held that the matter shall not be referred to Arbitration as per the language employed in clause 25 of the agreement particularly after the amendment of 2016. Observations: The court referred to Kashish Developers wherein it was observed that in TRF Ltd. v. Energo Engineering Projects Ltd.,, the Supreme Court has held that Managing Director of a party is ineligible to act or appoint an arbitrator due to section 12 of the Arbitration Act. Coming to the present case, the court observed that by reason of substitution of Section 12 by Act 3 of 2016, the arbitration clause enabling settlement of dispute through arbitration becomes otiose since the Engineer-in-Chief or the administrative head of the Public Works Division is dis-entitled from appointing an arbitrator.

History of this topic

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