During an ongoing arbitration between M/s. C Ltd and M/s. T Ltd., one of the members of the Arbitral Tribunal passed away and was substituted, and the proceedings continued with the reconstituted Arbitral Tribunal. There

The facts of the given situation are similar to the case of Chennai Metro Rail Ltd. v. Transtonnelstroy Afcons (JV) . In the matter, Supreme Court while analysing Sections 12, 13, 14 and 15 of the Arbitration and Conciliation Act, 1996 (Act) pointed out that the use of the term 'bias' has been deliberately avoided in the Act and the expression such as 'justifiable doubts about the ... impartiality' of an Arbitral Tribunal has been used instead. The Supreme Court clarified that: 35.... However, when the grounds enumerated in the Seventh Schedule occur or are brought to the notice of one party unless such party expressly waives its objections, it is ipso facto sufficient for that party, to say that the Tribunal's mandate is automatically terminated and as such, an aggrieved party can directly challenge the mandate of the Arbitral Tribunal before the courts under Section 14 of the Act. In the event a party raises claims of justifiable doubts with respect to the independence or impartiality of an Arbitral Tribunal on grounds enumerated in the Fifth Schedule, the remedy then available with a party is to first apply to the Arbitral Tribunal as per Section 13(2) of the Act. In the event such party is unsuccessful, the Arbitral Tribunal is duty-bound to continue the proceedings, and only once the award is made, the aggrieved party can challenge the award under Section, 34 of the Act. While referring to the judgment in ONGC, the Supreme Court reiterated that undoubtedly the Arbitral Tribunal's fee cannot be revised unless the parties have agreed to such revision; and in the event that there is an objection by either party, the Arbitral Tribunal ought to either revert to the previously agreed fee or decline to act as the Arbitral Tribunal. That being said, the Supreme Court took into consideration the principles laid down in ONGC, and noted that the insistence of retaining the revised fee, however, would not render the Arbitral Tribunal as ineligible, and thus would not terminate the mandate of the Arbitral Tribunal. In conclusion and while dismissing the present appeal by Chennai Metro, the Supreme Court noted that the de jure ineligibility because of existence of justifiable doubts on unenumerated grounds [or other than those specifically provided in Section 12(5)] could not be a gateway to allow challenges against the Arbitral Tribunal, during the course of the proceedings. The Supreme Court recognised that the consequences of granting any exception to Chennai Metro's plea in the present case could 'well be an explosion in the court docket' and could lead to other unforeseen results. The Supreme Court also noted that any deviation from the strictly prescribed statutory route with respect to the grounds laid down in the Fifth and Seventh Schedules, could 'cast yet more spells of uncertainty upon the arbitration process'. In view of the above, it may be said that the objections of C Ltd. may not be sustainable as objection to such revision doesn't fall under the purview of section 12 or Seventh Schedule of the Act.