Presiding Arbitrator Has No Noteworthy Superior Role Over Other Arbitrators Except On Procedure: Kerala HC

The Kerala High Court on Friday observed that a presiding arbitrator has no noteworthy superior role over the other members of an arbitral tribunal except in matters of procedure where authorised by the parties or the tribunal.

Justice S. Manu observed, “It is clear from the arbitration clause that the third arbitrator nominated by the two arbitrators chosen by the parties shall preside the tribunal. The learned counsel for the petitioner is correct in contending that the presiding arbitrator has no noteworthy superior role compared to the other arbitrators except in the matter of deciding the questions of procedure, provided he is authorized by the parties or all the members of the tribunal in that regard.”

The observation came while the Court was resolving a deadlock over the appointment of a third arbitrator in a dispute between Ambica Constructions & Contractors and BMH Care Hospital Ltd. arising from the construction of a hospital building at Perumbavoor.

The dispute reached the High Court after the parties failed to agree on a sole arbitrator. In an earlier proceeding, the Court constituted a three-member arbitral tribunal by appointing an engineer suggested by the contractor and a former Chief Justice of the Kerala High Court suggested by the hospital company.

The two arbitrators were directed to appoint the third arbitrator. However, they were unable to reach a consensus. The engineer-arbitrator favoured the appointment of another engineer, while the former Chief Justice preferred a former Chief Justice of a High Court or a retired Supreme Court judge.

The contractor argued that the disputes were predominantly technical in nature and required engineering expertise for proper adjudication. According to it, the existing presence of a former Chief Justice on the tribunal was sufficient to address legal issues and the third arbitrator should therefore be an engineer.

The hospital company contended that legal issues were also involved in the dispute and opposed the insistence on appointing a technical expert as the third arbitrator. It also pointed out that the contractor had initially proposed a retired judge as the sole arbitrator.

The Court referred to the Supreme Court's decision in National Highways Authority of India v. Bumihiway DDB Ltd. (JV) and held that there was no requirement that the presiding arbitrator be a retired Chief Justice or retired judge merely because another member of the tribunal possessed such qualifications.

The Court also noted that the engineer who was originally nominated as arbitrator had suggested the names of retired judges for appointment as the third arbitrator. These circumstances weighed with the Court while considering the contractor's objections.

The Court further observed:

“I am of the view that a former Judge can be nominated as the third arbitrator and the apprehension of the petitioner that highly technical issues and disputes will crop up for determination by the tribunal can be addressed by leaving it open to the arbitral tribunal to seek assistance of suitable experts, if required.”

Holding that concerns regarding technical issues could be addressed through expert assistance, the Court directed the Kerala High Court Arbitration Centre to nominate a former judge from Panel I as the third arbitrator.

The Court further clarified that the arbitral tribunal would be at liberty to seek the assistance of any expert if required to decide the disputes and issues arising between the parties.

For Petitioner: Advocates K Latha, Lalitha A, Gayathri Narendranath and B.G Bhaskar

For Respondent: Senior Advocate Santhosh Mathew, Advocate Anil Sebastian Pulickel, Arun Thomas, Veena Raveendran, Karthika Maria, Shinto Mathew Abraham, Leah Rachel Ninan, Mathew Nevin Thomas, Karthik Rajagopal, Kurian Antony Mathew, Aparnna S, Noel Ninan Ninan, Adeen Nazar, Arun Joseph Mathew and Rohan Mathew