Choice of arbitrators must be wider
The independence and impartiality of arbitrators have been a contentious issue between feuding parties for long. This is even more intense when the government or its entities make the opposite party sign agreements, in which the arbitrators would be their own officers. Two years ago, the Arbitration and Conciliation Act was amended to quell such preliminary disputes so that arbitration gets going. The Act now contains lists of persons who are ineligible to be arbitrators, like those who have conflict of interest. This has not totally stopped litigation over choice of arbitrators, as shown by the long judgment of the Supreme Court in the case, Voestalpine Schienen GMBH Vs Delhi Metro Corporation. Disputes arose between them over payments for supplying rails. The agreement provided a panel of names chosen by the Metro, from which the Austrian counterpart was to choose. However, the foreign firm argued it had justifiable doubts about the neutrality of the persons, because they were mostly retired engineers and officers of the government or its corporations. The court ruled that merely because they had worked at one time for government entities, they could not be suspected of bias. If the court is convinced that there is likelihood of bias, it can name arbitrators. But, this was not such a case. However, the court found the Metro had offered a small list of five persons. So, it asked the Metro to make the panel broad-based, including experts from the private sector, as well as legal and accountancy personnel.
