The principle of party autonomy in the choice of the procedure for appointing an Arbitrator, as well as the burden of ensuring the appointed Arbitrator's neutrality and impartiality, were central legal points established in the judgment.

NAVIN CHAWLA, J.

1. These petitions have been filed under Section 14(2) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) praying for termination of the mandate of the Sole Arbitrator appointed by the Managing Director of the respondent.

2. Learned counsel for the petitioner, relying upon the judgment of the Supreme Court in TRF Limited v. Energo Engineering Projects Ltd., (2017) 8 SCC 377 has submitted that the Arbitration Agreement between the parties in so far as that it provides that the Sole Arbitrator shall be nominated by the Managing Director of the respondent, would no longer be enforceable in view of the Section 12(5) of the Act. Though, various other pleas have also been raised in the petition to challenge the Arbitrator so appointed, the learned counsel for the petitioner fairly submits that as these are not relatable to Section 12(5) of the Act, in view of the judgment of the Supreme Court in HRD Corporation v. GAIL (India) Limited, MANU/SC/1066/2017, the petitioner would not press the same in the present petition, reserving its right to agitate the same in its application under Section 34 of the Act, if required.

3. I may at the outset note that the plea that has been raised by the petitioner is no longer res-integra and recently a Coordinate Bench of this Court in D.K. Gupta & Anr. v. Renu Munjal, 2017 SCC Online Del 12385, considering the effect of Section 12(5) of the Act and the judgment of the Supreme Court in TRF (supra) has held as under:

“8. However the arbitration clause pertaining to this case is on a different note. Here an arbitrator so appointed is not an employee of a party to the agreement. The arbitration clause herein rather gives a choice to one of the parties viz a lender to appoint an arbitrator. Thus perhaps is a striking difference between the two arbitration clauses viz., clause 33 of TRF Ltd. (supra) and clause 8.9.4 of the agreement dated 02.09.2013 herein. In TRF Ltd. (supra) the Managing Director of the buyer, being an employee of the buyer in a way represents the buyer itself, which is not the case here. Admittedly there exist no bar under the Act which restrains a party to appoint an Arbitrator. Rather section 11(2) of the Arbitration and Conciliation Act, 1996 empowers the parties to agree on a procedure for appointment of an arbitrator, which exactly is the situation here. Section 11(2) is reproduced as under:-

“11. Appointment of arbitrators - …

(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.”

9. When there exists no prohibition in the Act for a party to appoint an arbitrator, then a lender or a buyer, per any agreement, may have a right to choose an arbitrator, as even noted in para 17 of TRF (supra) as under : -

“17. First we shall address the issue whether the Court can enter into the arena of controversy at this stage. It is not in dispute that the Managing Director, by virtue of the amended provision that has introduced sub-section (5) to Section 12, had enumerated the disqualification in the Seventh Schedule. It has to be clarified here that the agreement had been entered into before the amendment came into force. The procedure for appointment was, thus, agreed upon. It has been observed by the designated Judge that the amending provision does not take away the right of a party to nominate a sole arbitrator, otherwise the legislature could have amended other provisions. He has also observed that the grounds including the objections under the Fifth and the Seventh Schedules of the amended Act can be raised before the Arbitral Tribunal and further when the nominated arbitrator has made the disclosure as required under the Sixth Schedule to the Act, there was no justification for interference. That apart, he has also held in his conclusion that besides the stipulation of the agreement governing the parties, the Court has decided to appoint the arbitrator as the sole ar