The has appointed former High Court Judge Justice Mauna M. Bhatt as the to resolve a long-standing partnership dispute between the of late Sanjay Pravinchandra Shah and the surviving partner, Jasmin Pravinchandra Shah. The appointment comes in the wake of significant judicial observations calling for a broader, more inclusive approach to the selection of arbitrators, emphasizing the urgent need to incorporate qualified women and technical experts into arbitral panels.
The dispute stems from the operations of M/s. Corus Metal, a partnership firm originally established in with equal profit-sharing between the two partners. Following the sudden death of Sanjay Pravinchandra Shah in , the firm effectively . The petitioners, representing the interests of the late partner, alleged that the respondent had unilaterally sold industrial land owned by the firm in Dholka, Ahmedabad, for approximately ₹1.81 crore, without distributing the deceased partner's 50% share of the sale proceeds. Faced with the respondent’s refusal to settle accounts or participate in the arbitration process as mandated by their original agreement, the petitioners moved the High Court under .
Addressing the Diversity Deficit
During the proceedings, Justice D.N. Ray underscored that the process of selecting an arbitrator serves as an opportunity to modernize the framework of dispute resolution. The Court turned its attention to empirical data regarding the composition of arbitral bodies, specifically citing a study conducted by the . The findings, which analyzed court-made appointments across constitutional courts in , revealed that of the appointments where gender was documented, less than 30% involved female arbitrators. Perhaps more strikingly, the study indicated that technical experts, whose specialized knowledge is often crucial in commercial and industrial disputes, accounted for a mere 3.10% of total appointments.
In his oral judgment, Justice Ray argued that while the core pillars of arbitration—competence, independence, and integrity—must never be compromised, the current underrepresentation of diverse professionals in the field is a matter requiring active intervention. The Court stated,
"Without derogating from the primacy of competence, integrity and independence, this Court is of the considered view that such under-representation merits due attention. Parties, counsel and arbitral institutions are, therefore, encouraged to widen the pool from which arbitrators are drawn, so as to include duly qualified women and technical experts."
Legal Precedent and Judicial Mandate
The decision to broaden the scope of prospective arbitrators is rooted in the statutory framework provided by , which mandates that courts consider factors likely to secure the appointment of an independent, impartial, and suitably qualified arbitrator. Justice Ray drew significant guidance from the ’s ruling in . In that landmark judgment, the apex court stressed that institutional panels should be "broadbased" and comprise not only members of the judiciary and the bar but also seasoned professionals from engineering and other specialized sectors, whose expertise can streamline the adjudication of technical commercial matters.
By integrating these principles into his order, Justice Ray highlighted that technical proficiency does not merely enhance the efficiency of proceedings but also improves the quality of arbitral awards, particularly in disputes involving industrial property, accounts, and complex balance sheets. The appointment of Justice Mauna M. Bhatt, a retired High Court judge, aligns with these standards, ensuring both legal rigour and impartiality in the impending resolution of the M/s. Corus Metal dispute.
Resolution of Procedural Objections
The respondent had initially resisted the move toward arbitration by raising objections centered on the doctrine of " ," suggesting that the issues raised were beyond the scope of arbitration. However, the High Court found these contentions to be legally unsustainable. Relying on recent Supreme Court guidance, including the ruling in , the Court clarified that the procedural threshold for referring a dispute to an arbitrator is to ensure the existence of a valid , which was explicitly present in .
With the legal objections dismissed, the Court finalized the appointment of Justice Bhatt, confirming that the proceedings will be governed by the Arbitration Centre (Domestic and International), Rules, 2021. This framework provides the necessary regulatory environment for the parties to finally address the valuation of the firm’s assets, including the contested capital contribution of over ₹74 lakh recorded in the audited balance sheet of .
The appointment signifies a definitive step forward in a conflict that had remained stalled since the dissolution of the firm. By adopting a, forward-looking stance on the composition of the arbitral tribunal, the Court has not only facilitated a mechanism for the petitioners to seek their rightful share of the firm's assets but has also sent a clear message to the legal community regarding the importance of inclusivity and expertise. The Registry has been directed to communicate the order to the arbitrator immediately, setting the stage for the formal commencement of proceedings. Both the lead petition and the connected matters are now placed under the sole jurisdiction of the newly appointed arbitrator, bringing an end to this round of judicial intervention.
arbitral panel diversity - technical expert arbitration