The de jure or de facto termination of mandate of an arbitrator under section 14 of Arbitration and Conciliation Act, 1996 must not only be assessed in light of the proviso to section 12(5) but also with reference to the express agreement entered into between the parties subsequent to the dispute having arisen between the parties – McLeod Russel India Ltd. & Anr. Vs. Aditya Birla Finance Ltd. & Ors. – Calcutta High Court
March 9, 2023
Hon’ble High Court held that the proviso to section 12(5) which allows the parties to a dispute to waive the applicability of section 12(5) by an express agreement in writing would hence take from and be confined to section 12(5). In other words, the express agreement of the parties to get around the disqualification under the categories mentioned in section 12(5) can only be in relation to the Seventh Schedule. This is clear from the words “... waive the applicability of this sub-section ...” in the proviso (underlined for emphasis). The de jure or de facto termination of mandate of an arbitrator under section 14 must not only be assessed in light of the proviso to section 12(5) but also with reference to the express agreement entered into between the parties subsequent to the dispute having arisen between the parties. The proviso to section 12(5) must be read in sync with the momentum of the 1996 Act. The proviso to section 12(5) is not a speed-breaker in the momentum to be achieved through arbitration but an accelerator to the process so that parties may resolve any lingering ineligibility issues and put such matters at rest once and for all. The proviso is not to be treated as an escape-route to a disgruntled party who is dissatisfied with a decision of an arbitrator and decides to do a volte-face after participating in the proceedings for a considerable length of time.