In an arbitration arising out of a 20-yearold supply agreement between the GAIL and HRD Corporation (Marcus Oil and Chemical Division-a Houston, Texas based company) (“HRD”), the latter challenged the mandate of the nominee arbitrator of the GAIL and the presiding arbitrator under Sections 12 and 13 of the Arbitration and Conciliation Act, 1996.

After dismissal of the said challenge by the Tribunal, HRD approached the Delhi High Court in petitions under Section 14 and 15 of the Act. The High Court dismissed the petitions holding that a challenge to the appointment of the arbitrators on grounds other than the existence of relationships falling under the categories specified in the 7th Schedule of the Act, could not be entertained in the said proceedings. HRD preferred Special Leave Petitions against such order.

The main issues that were to be decided by the Supreme Court were whether a petition under Section 14 can be maintained against the dismissal of an application filed under Section 13(1) read with Section 12(5) of the Act challenging the impartiality and independence of an arbitrator under Schedule 5 (as amended in October 2015) and whether an arbitrator can be said to be independent and impartial if he has appeared as an arbitrator in a prior arbitration between the same parties with respect to the same contract and involving similar issues.

The Hon’ble Supreme Court held in favour of the GAIL and laid down the principles of law relating to Sections 12, 13 and 14 read with the 5th and the 7th Schedule of the Act post amendment.

Firm successfully represented the GAIL before the Hon’ble Supreme Court, the Delhi High Court and before the Arbitral Tribunal. Argued the matter in-house, advancing detailed arguments on the interpretation of the law which ultimately proved to be of assistance to the Hon’ble Supreme Court in laying down the law on the subject.

Vanita Bhargava (Partner) and Abhisaar Bairagi (Senior Associate) represented the firm.