Arbitration, Mediation and Conciliation · Challenge to Award and Appeals

Grounds for Challenge to an Arbitrator under Section 12

Updated 11 October 2026 · Fact-checked

Section 12 requires a prospective arbitrator to disclose in writing any circumstance that raises justifiable doubts about independence or impartiality, or affects time to finish within twelve months. An arbitrator can be challenged only on those doubts or for lacking agreed qualifications. A Seventh Schedule relationship makes the person ineligible.

Understand Grounds for Challenge to an Arbitrator (Section 12)

Arbitration works only if the parties trust the arbitrator. Section 12 protects that trust. It does two things: it forces disclosure before appointment, and it limits the grounds on which an arbitrator can later be challenged.

Under section 12(1), when a person is approached to be an arbitrator, he must disclose in writing any circumstance that (a) is a direct or indirect past or present relationship with or interest in any party or the subject-matter, financial, business, professional or other, likely to give rise to justifiable doubts about independence or impartiality, and (b) is likely to affect his ability to devote sufficient time, especially to finish the arbitration within twelve months. The disclosure is made in the form of the Sixth Schedule. The Fifth Schedule guides whether such doubts exist.

Section 12(3) then limits challenge to two grounds only: justifiable doubts about independence or impartiality, or the arbitrator not having the qualifications the parties agreed. Nothing else is a ground under this section.

Section 12(4) deals with a party who challenges its own appointee. It may do so only for reasons it becomes aware of after the appointment. This stops a party from appointing someone and then attacking him over facts it already knew.

Section 12(5) is stricter. A person whose relationship with the parties, counsel or the subject-matter falls in the Seventh Schedule is ineligible, even if the agreement says otherwise. The only escape is a waiver: the parties, after disputes have arisen, may waive it by an express agreement in writing. The Fifth Schedule creates grounds for doubt that must be examined. The Seventh Schedule makes the person ineligible outright.

Key rules to remember

Disclosure duty, s 12(1): Approached for appointment → disclose in writing (Sixth Schedule form) → doubts on independence/impartiality + ability to finish within 12 months; Duty arises when the person is approached, before appointment.
Grounds for challenge, s 12(3): Challenge only if (a) justifiable doubts as to independence or impartiality, or (b) lacks qualifications agreed by parties; These are the only two grounds. The word is 'justifiable' doubts.
Challenge of own appointee, s 12(4): Own appointee: challenge only for reasons learnt after appointment; Applies to an arbitrator appointed by the party or in whose appointment it participated.
Ineligibility, s 12(5): Seventh Schedule relationship → ineligible, notwithstanding any prior agreement; Waiver only by express written agreement made after disputes have arisen.
Role of Schedules: Fifth Schedule = guide to justifiable doubts (Explanation 1); Sixth Schedule = disclosure form (Explanation 2); Seventh Schedule = ineligibility; Do not mix up the three.

How to solve Grounds for Challenge to an Arbitrator (Section 12) questions

Use this order for any problem on challenging or appointing an arbitrator under section 12.

1Identify the stage: is the person only approached, newly appointed, or already acting?
2Check whether the relationship falls in the Seventh Schedule. If it does, the person is ineligible under section 12(5).
3If ineligible, check whether the parties gave an express written waiver after the dispute arose. An earlier agreement or mere silence is not a waiver.
4If not in the Seventh Schedule, ask whether circumstances give rise to justifiable doubts about independence or impartiality, using the Fifth Schedule as a guide. Also check the agreed qualifications.
5Check disclosure: did the person disclose in writing in the Sixth Schedule form, including time availability for the twelve-month period?
6If a party challenges its own appointee, check that the reason arose or became known only after appointment (section 12(4)).
7State the procedure briefly: the parties may agree one, failing which a written statement within fifteen days under section 13(2).
8Conclude clearly: ineligible, challengeable, or no valid ground.

Quickest way: Three-gate test

When to use it: When a case question gives facts about an arbitrator's links to a party and asks if he can be challenged.

Gate 1: Seventh Schedule link? If yes, ineligible; look for a written post-dispute waiver.
Gate 2: Otherwise, does the link create justifiable doubts (Fifth Schedule guide) or breach agreed qualifications?
Gate 3: Was the point disclosed, and if the challenger is the appointing party, was it learnt only after appointment?
Write the conclusion in one line, then add the section 13 procedure.

Common mistakes in Grounds for Challenge to an Arbitrator (Section 12)

Treating Fifth and Seventh Schedules as the same list.
Both list relationships with parties, so they look alike.
Fix: Fifth Schedule guides whether doubts exist. Seventh Schedule makes a person ineligible under section 12(5). Say this in the answer.
Saying a prior agreement can allow a Seventh Schedule person to act.
Students assume party autonomy overrides everything.
Fix: Section 12(5) applies notwithstanding any prior agreement. Only an express written waiver after disputes have arisen works.
Adding extra grounds of challenge such as delay or wrong decisions.
Confusing section 12(3) with termination of mandate.
Fix: Section 12(3) allows only two grounds: justifiable doubts, or lack of agreed qualifications.
Allowing a party to challenge its own appointee on facts known earlier.
Missing section 12(4).
Fix: Such a challenge is only for reasons of which the party became aware after the appointment.
Forgetting that disclosure covers time availability.
Students remember only independence and impartiality.
Fix: Section 12(1)(b) also requires disclosure of circumstances affecting ability to devote time and finish within twelve months.
Saying the challenge goes to the court first.
Mixing sections 12 and 13 with court powers.
Fix: Under section 13 the arbitral tribunal decides the challenge, unless the arbitrator withdraws or the other party agrees. Court review comes by setting aside the award under section 34.

Worked examples

Example 1

Rao Infra Ltd and Sen Builders Pvt Ltd have a dispute. Their contract names Mr Iyer, who is a current employee of Rao Infra Ltd, as sole arbitrator. Sen Builders objects. Can Mr Iyer act?

Show the solution

Step 1: Mr Iyer's relationship is that of an employee of one party. Such a relationship with a party is a ground in the Seventh Schedule.
Step 2: Under section 12(5), a person falling in the Seventh Schedule is ineligible to be appointed, notwithstanding any prior agreement to the contrary.
Step 3: The contract naming him is a prior agreement, so it does not save him.
Step 4: Only an express written agreement made after the dispute arose can waive the ineligibility. Sen Builders has objected, so there is no waiver.
Step 5: The objection should be raised promptly, and the appointment cannot stand.

Answer: Mr Iyer is ineligible under section 12(5) because of his employment with a party. The contract clause does not help. Only an express written waiver by the parties after the dispute arose could validate the appointment, and none exists.

Example 2

Meera Textiles appointed Mr Das as its arbitrator. Two months later it learns that Mr Das's firm advised the other party on an unrelated matter last year, which Mr Das had not disclosed. Can Meera Textiles challenge him?

Show the solution

Step 1: Meera Textiles appointed Mr Das, so section 12(4) applies. It may challenge only for reasons it became aware of after the appointment.
Step 2: It learnt of the advisory relationship after appointment, so section 12(4) does not bar it.
Step 3: Ask whether the relationship is a Seventh Schedule matter. If it is, he is ineligible under section 12(5). If not, test it under section 12(3)(a): does it give rise to justifiable doubts about independence or impartiality? The Fifth Schedule is the guide.
Step 4: Note the breach of disclosure under section 12(1), since a past professional relationship with a party had to be disclosed in writing.
Step 5: Procedure: unless the parties agreed another, Meera Textiles must send a written statement of reasons to the tribunal within fifteen days of becoming aware of the circumstances (section 13(2)).

Answer: Meera Textiles may challenge Mr Das. Section 12(4) permits it because the facts became known after appointment. The challenge succeeds if the relationship creates justifiable doubts, or if it falls in the Seventh Schedule. It must send its written statement within fifteen days under section 13(2).

Exam tips

Always name the sub-section: 12(1) disclosure, 12(3) grounds, 12(4) own appointee, 12(5) ineligibility.
In a case question, first test the Seventh Schedule, then the Fifth. This order shows the examiner you know the difference.
Mention the twelve-month time disclosure in 12(1)(b). Many answers miss it.
End with the procedure in section 13 and the remedy of setting aside under section 34 if the challenge fails.
Do not quote individual entries of the Schedules unless you are certain of them. Use the general idea, such as employee, adviser or past involvement.

Practice questions from Challenge to Award and Appeals

Grounds for Challenge to an Arbitrator (Section 12): frequently asked questions

What are the grounds to challenge an arbitrator under Section 12?

Under section 12(3), an arbitrator may be challenged only if circumstances give rise to justifiable doubts about his independence or impartiality, or if he lacks the qualifications the parties agreed. No other ground is allowed under this section.

What is the difference between the Fifth and Seventh Schedules?

The Fifth Schedule guides whether circumstances give rise to justifiable doubts about independence or impartiality. The Seventh Schedule lists relationships that make a person ineligible to be an arbitrator under section 12(5).

Can parties waive the Seventh Schedule ineligibility?

Yes, but only after disputes have arisen between them, and only by an express agreement in writing. An agreement made earlier, such as in the contract, does not waive it.

How do I challenge an arbitrator in India?

The parties may agree on a challenge procedure. If they have not, you send a written statement of reasons to the arbitral tribunal within fifteen days of learning of the constitution of the tribunal or the relevant circumstances, under section 13(2).

What must an arbitrator disclose?

A person approached for appointment must disclose in writing any relationship or interest likely to raise justifiable doubts about independence or impartiality. He must also disclose circumstances that may affect his time and his ability to finish within twelve months.