The judgment established the importance of full disclosure in arbitration proceedings and emphasized the distinction between ineligibility and justifiable doubts as to independence or impartiality, as interpreted by the Supreme Court.

NAVIN CHAWLA, J.

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Allowed, subject to all just exceptions.

1. These petitions under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred as to the ‘Act’) have been filed by the petitioners seeking appointment of a Sole Arbitrator for adjudicating the disputes that have arisen between the parties in relation to the Apartment Buyer’s Agreement and Sales Deed executed between the parties. The dispute involved is with respect to the demand of payment of Value Added Tax (VAT) raised by the respondent on the petitioners.

2. In terms of the Arbitration Agreement, the respondent has appointed Justice M.L. Mehta (Retd.) as an Arbitrator in all these petitions as a common question of law and facts is involved in all these cases.

3. The petitioners had challenged the appointment before the Sole Arbitrator in the form of an application under Section 12 read with Section 13 of the Act and upon rejection of the said application, they have filed the present petitions.

4. The challenge to the authority of the Arbitrator is premised on the fact that in his disclosure dated 31.03.2017 (in all matters the date for disclosure is same), the Arbitrator had disclosed the following in compliance with Section 12 of the Act:

“2. Whereas the undersigned having accepted to act as Sole Arbitrator, makes the following declaration regarding impartiality and independence in terms of Schedule V, VI and VII of Section 12 of the Arbitration and Conciliation Act, 1996 ( as amended in 2015):

“I, Justice M.L. Mehta (Retd.) Former Judge of Delhi High Court do hereby disclose and declare that 1 have never been associated (past or present) in any capacity, personally or otherwise with either of the parties and no circumstances exit under schedule V, VI & VII which may give rise to any justifiable doubt my independence or impartiality. I also declare that I do not have any financial, personal or any other kind of interest, direct or indirect, in the Arbitration proceedings or the outcome of the Award.

Further, I disclose and declare that 1 have judicial experience of about 36 years, having worked in different positions through subordinate courts to High Court of Delhi. Though, at present I am having good number of arbitrations matters, but there does not exist any circumstance likely to affect my ability to devote sufficient time to the present Arbitration or finish the same within twelve months and render award within three months.”

5. It is further contended that as the petitioners came to know that the same Arbitrator has been appointed in various other matters of the respondents, they filed an application under Section 12 read with Section 13 of the Act before the Sole Arbitrator praying to him to recuse himself from the proceedings. It is contended that only after filing of the said application, the Sole Arbitrator tendered yet another disclosure dated 15.05.2017, which reads as under:

“3. In furtherance to the same, I additionally declare as under:-

i. There does not exist any circumstance of my having any relationship, past or present, with any of the parties, or interest in any of the parties or relation with the subject matter in dispute