In Brief
Aravali Power Company challenged a High Court order that set aside the appointment of its Chief Executive Officer as sole arbitrator in a construction dispute with Era Infra Engineering Ltd. under an agreed arbitration clause. The Supreme Court held that before the Arbitration and Conciliation (Amendment) Act, 2015 took effect, an employee arbitrator is not automatically disqualified merely for being employed by one party; disqualification arises only upon 'justifiable apprehension' of bias if the person was the controlling authority over the subject contract or a direct subordinate to the impugned decision-maker. Since the respondent failed to challenge the arbitrator within prescribed time and procedure and had participated in proceedings without objection, the High Court had no jurisdiction to intervene. The Court allowed the appeal and restored the arbitration process.
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