TRF LTD. versus ENERGO ENGINEERING PROJECTS LTD.

TRF LTD. versus ENERGO ENGINEERING PROJECTS LTD.

Once the arbitrator (Managing Director) has become ineligible by operation of law under Section 12(5), he cannot nominate another as arbitrator; statutory ineligibility extinguishes power to nominate, hence order appointing arbitrator based on such nomination is unsustainable.

Parties
Appellant: TRF LTD.; Respondent: Energo Engineering Projects Ltd.
Jurisdiction
India
Judgment Date
03 July 2017
Procedural Posture
Civil Appeal / Appeal From Judgment and Order of the Delhi High Court in Arbitration Petition No. 89 of 2016
Outcome
Appeals allowed; orders of High Court set aside; matters remitted to High Court for fresh consideration.
Legal Topics
Arbitrator Eligibility, Nomination Power After Statutory Ineligibility, Section 12(5) Arbitration and Conciliation Act 1996
Arbitration Law Arbitrator Eligibility Nomination Power After Statutory Ineligibility Section 12(5) Arbitration and Conciliation Act 1996

Case Brief

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Parties

TRF LTD.

Appellant

Energo Engineering Projects Ltd.

Respondent

Procedural Posture

Civil Appeal / Appeal From Judgment and Order of the Delhi High Court in Arbitration Petition No. 89 of 2016

Legal Issues

  1. 1 Whether a person statutorily ineligible to act as arbitrator (under Section 12(5) and Seventh Schedule of Arbitration and Conciliation Act, 1996) can nominate another person as arbitrator.
  2. 2 Whether the statutory disqualification of the nominated arbitrator can be raised before the Court in a Section 11(6) application.

Ratio Decidendi

Once the arbitrator (Managing Director) has become ineligible by operation of law under Section 12(5), he cannot nominate another as arbitrator; statutory ineligibility extinguishes power to nominate, hence order appointing arbitrator based on such nomination is unsustainable.

Court Disposition

Appeals allowed; orders of High Court set aside; matters remitted to High Court for fresh consideration.

Orders

  • Order appointing arbitrator set aside.
  • Matters remitted to High Court for fresh consideration regarding appointment of an arbitrator.