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Court can substitute arbitrator

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If an arbitrator nominated by the contesting parties withdraws from the proceedings, the court can select a substitute arbitrator of its own choice. “It is the courts duty to give effect to the policy of law, that is to promote efficacy of arbitration,” the Supreme Court has stated in its judgment, Shailesh vs Mohan. In this case, the parties selected a retired judge of the Supreme Court from a panel of names but she resigned midway. The parties could not agree on a new name and the matter went back to the Bombay high court. It substituted one of its retired judges in her place. This was opposed by one of the parties, which argued that once the arbitrator withdraws, the agreement ended and the court could not name another. Rejecting this argument, the Supreme Court stated that under Section 15( 2) of the Arbitration and Conciliation Act, when the mandate of an arbitrator terminates, a substitute arbitrator “ shall” be appointed. Arbitration must go on. For example, in a family dispute, the warring members might name the grand uncle as the only arbitrator as they repose faith in him. If he is not available, quits or dies, arbitration does not end; the court can nominate another person of its choice. If the parties specifically prohibit asubstitute arbitrator, a new person cannot enter.
Business Standard, New Delhi, 2nd Nov. 2015

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