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CS Professional · Arbitration, Mediation and Conciliation · Challenge to Award and Appeals

Nirmal Steels Ltd. nominated Mr. Dev Kapoor as its arbitrator. At the time of nomination Nirmal Steels already knew that Mr. Kapoor had once been a consultant to its rival firm. After the proceedings start, Nirmal Steels wants to challenge him on that very ground. What is the position under Section 12(4)?

The challenge fails. A party may challenge an arbitrator it appointed only for reasons it learned of after the appointment was made. Nirmal Steels knew of the consultancy when it nominated Mr. Kapoor, so it cannot rely on that ground now.

  1. AThe challenge fails, because a party can challenge its own appointee only for reasons it became aware of after the appointmentCorrect
  2. BThe challenge succeeds, because any party may challenge any arbitrator at any time
  3. CThe challenge succeeds only if the other party consents
  4. DThe challenge must be made directly to the Supreme Court

Explanation

Section 12(4) allows a party to challenge an arbitrator appointed by it, or in whose appointment it participated, only for reasons of which it becomes aware after the appointment. Nirmal Steels knew of the consultancy before nominating him, so the challenge on that ground is barred.

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