Mere Professional Engagement by Party’s Law Firm Does Not Disqualify Arbitrator Under Schedule VII: High Court

The High Court held that mere professional engagement of the arbitrator by the party’s law firm does not amount to disqualification under Schedule VII of the Arbitration and Conciliation Act, 1996.

On 9 June 2025, the Calcutta High Court, in a single-judge bench decision by Justice Shampa Sarkar, adjudicated an arbitration application wherein the petitioner sought termination of the mandate of the arbitrator on the ground that he was de jure unable to act. The Court held that mere professional engagement of the arbitrator by a law firm representing one of the parties in unrelated matters does not constitute a disqualifying relationship under Categories 3 and 4 of Schedule VII of the Arbitration and Conciliation Act, 1996. Such engagement does not render the arbitrator de jure unable to act, and therefore, the mandate of the arbitrator was not liable to be terminated.

The High Court dealt with an application filed under Section 14(2) read with Section 15 of the Arbitration and Conciliation Act, 1996, wherein the petitioner sought termination of the mandate of the learned Arbitrator on the ground that he was de jure unable to act. The petitioner further sought appointment of a neutral substitute arbitrator and, pending such appointment, prayed for a stay of the arbitral proceedings. The matter was taken up for final hearing with the consent of both parties. Counsel for the respondent, Mr. Datta, submitted that the issue was purely legal in nature and did not require a counter-affidavit.

Mr. Samrat Sen, senior counsel for the petitioner, submitted that the learned Arbitrator had made a disclosure as mandated under Schedule VI of the Act, stating that he had no relationship with the parties or their lawyers. However, the petitioner was dissatisfied with the disclosure and, by a letter dated August 22, 2024, had requested the Arbitrator to disclose whether he had ever been engaged by the claimant's advocate-on-record, M/s. Choudhury & Co. Advocates. No response was received. Later, by letter dated December 17, 2024, the petitioner renewed the request, but the Arbitrator declined to furnish further details. Based on these facts, the petitioner invoked disqualification grounds under Categories 3 and 4 of Schedule VII and prayed for termination of the Arbitrator’s mandate.

The petitioner alleged that the Arbitrator had been engaged on various occasions by the claimant's law firm, creating a professional relationship which was prohibited under the said Schedule. The petitioner further contended that the Arbitrator’s refusal to allow the sur-rejoinder, which attempted to introduce additional facts, was overly technical and inconsistent with the flexible nature of arbitration. Mr. Sen argued that participation in the proceedings was without prejudice and the plea of de jure inability could be raised at any stage.

The respondent countered by stating that the disqualifications in Schedule VII did not apply in this case, and that the application was not maintainable at such an advanced stage of the proceedings. The Court examined the contentions and observed that the Arbitrator's disclosure was sufficient. It clarified that a general professional engagement by a law firm in unrelated matters did not constitute a bar under Categories 3 or 4 of Schedule VII. It emphasised that representation by a law firm in other unrelated proceedings, even if the Arbitrator was briefed by such a firm, did not make the Arbitrator ineligible unless he had directly represented the law firm or had a personal relationship with it.

The Court held that mere briefing of an advocate by a law firm in unrelated matters did not amount to representation of the law firm itself, nor did it indicate a disqualifying relationship under the statutory scheme. It further stated that accepting briefs from various law firms was part of a lawyer's professional practice and did not impair independence or impartiality. Hence, there was no valid basis to terminate the Arbitrator’s mandate on the ground of de jure inability.

Accordingly, the High Court dismissed the application, holding that the Arbitrator had not violated any disqualification norms under Schedule VII and had adequately complied with the disclosure requirements. The arbitral proceedings were directed to continue from the last recorded stage, and the petitioner was granted liberty to pursue any grievance regarding the rejection of the sur-rejoinder before the appropriate forum.

Mr. Samrat Sen, Sr. Advocate with Mr. Somdutta Bhattacharyya and Mr. Aritra Deb, Advocates, represented the Petitioner.

Mr. Rajarshi Datta, Mr. Neelesh Chowdhury and Ms. Anuradha Poddar, Advocates, appeared for the Respondent.

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REEDLAW 2025 Cal 06002