In Brief
The Supreme Court held that under the Arbitration and Conciliation Act, 1996, a person who falls within categories specified in the Seventh Schedule (such as a director of one of the parties) is ineligible to act as arbitrator, and this ineligibility cannot be removed by prior agreement. An ineligible person cannot appoint another arbitrator; such appointment is void ab initio. When an arbitrator is found ineligible, the mandate terminates automatically under Section 14(1)(a) as the arbitrator becomes de jure unable to perform. The Court rejected the view that waiver of ineligibility could be inferred from appointment letters or participation in proceedings, holding that only an express written agreement made subsequent to disputes, with full knowledge of ineligibility, constitutes valid waiver. The TRF judgment's declaration on ineligibility applies to all similar cases, not just prospectively.
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