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Supreme Court of India 2017-08-31

HRD Corporation (Marcus Oil and Chemical Division) vs GAIL (India) Limited (Formerly Gas Authority of India Ltd.)

Bench: 2 — R.F. Nariman

In Brief

A retired judge, appointed as presiding arbitrator in the fourth arbitration between HRD Corporation and GAIL, faced challenges on two grounds: (1) he had given a legal opinion to GAIL in an unrelated matter in 2014, and (2) he had previously rendered an award in an earlier arbitration between the same parties. The Supreme Court held that neither circumstance rendered him ineligible. A single professional opinion given at arm's length does not constitute the "business relationship" required by the Seventh Schedule. Prior arbitration between the same parties on a different period does not, without more, create bias. The Court clarified that the Seventh Schedule creates absolute ineligibility (determinable before award), while the Fifth Schedule creates justifiable doubts (determinable only after award). Appeals were dismissed.

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Arbitration law Arbitrator independence and impartiality Arbitration and Conciliation Act, 1996 Conflict of interest Arbitrator qualification and disqualification

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