Composition of Arbitral Tribunal (Sections 10–15) →

The legitimacy of every arbitral award rests on a foundation laid long before the merits are ever argued: the lawful constitution of the tribunal. Sections 10 to 15 of the Arbitration and Conciliation Act, 1996 govern this foundation, addressing the number of arbitrators a tribunal may have, the procedure for their appointment, the twin grounds on which their independence and impartiality may be challenged, the consequences of a failure or impossibility to act, and the mechanics of substitution. Read together, these provisions embody the cardinal principle that an arbitrator must be, and must appear to be, independent and impartial. The 2015 Amendment transformed this Block from a relatively soft regime of disclosure into a hard-edged statutory code of ineligibility, and the Supreme Court has, in a string of landmark decisions, given those amendments teeth. This article maps the statutory scheme of Sections 10 to 15 against the controlling case law.

The Statutory Scheme: Party Autonomy as the Starting Point

Part I of the Act devotes a discrete cluster of provisions, Sections 10 to 15, to the composition of the arbitral tribunal. The architecture of these sections is deliberately deferential to the will of the parties: in almost every instance the statute begins by recognising the freedom of the parties to agree on a matter, and supplies a default rule only where that agreement is silent. Section 10 lets the parties fix the number of arbitrators; Section 11 lets them design the appointment procedure; Section 13 lets them agree the challenge procedure. This drafting pattern reflects the consensual genesis of arbitration as a creature of contract. Yet party autonomy is not unbounded. The 2015 Amendment carved out a non-derogable core, principally Section 12(5) read with the Seventh Schedule, which overrides any contrary agreement to protect the structural integrity of the tribunal. Understanding the composition rules therefore means understanding where autonomy ends and mandatory law begins. For the conceptual backdrop, see our note on the introduction to the Act and the definitions of arbitration, arbitral tribunal and court.

The tribunal so constituted is the very entity in which the parties have reposed their dispute-resolution trust, displacing the ordinary jurisdiction of civil courts. Because the courts will later be asked to enforce, or to refuse to set aside, the award that this tribunal produces, the law insists that the tribunal be lawfully composed at its inception. A defect in composition is among the recognised grounds for setting aside an award under Section 34(2)(a)(v), which makes Sections 10 to 15 not a mere procedural prelude but a gateway condition for the validity of the eventual award.

Section 10: Number of Arbitrators and the Odd-Number Rule

Section 10(1) provides that the parties are free to determine the number of arbitrators, with the single proviso that such number shall not be an even number. Section 10(2) supplies the default: failing any determination by the parties, the arbitral tribunal shall consist of a sole arbitrator. The insistence on an odd number is a practical safeguard against deadlock, ensuring that a panel can always reach a decision by majority under Section 29, rather than splitting evenly with no operative outcome.

The most important judicial gloss on this section is M.M.T.C. Ltd. v. Sterlite Industries (India) Ltd., (1996) 6 SCC 716. The arbitration clause there provided that each party would nominate one arbitrator and the two arbitrators would appoint an umpire, a structure that on its face contemplated an even number of arbitrators. M.M.T.C. contended that the agreement was void for offending Section 10(1). The Supreme Court rejected this argument. It held that an arbitration agreement is not rendered invalid merely because it provides for an even number of arbitrators; the validity of the agreement is tested under Section 7 and does not depend on compliance with Section 10. The Court reasoned that the requirement of an odd number is not a condition of validity but a default mechanism, and where parties have agreed on two arbitrators, those two should appoint a third presiding arbitrator, thereby curing the even-number problem and avoiding deadlock. The decision thus harmonised the strict text of Section 10(1) with the pro-arbitration policy of saving, rather than striking down, otherwise valid agreements.

Section 11: Appointment of Arbitrators

Section 11 is the operative engine for constituting the tribunal. Section 11(2) preserves the parties' freedom to agree a procedure for appointing the arbitrator or arbitrators. Where the parties have not agreed, Section 11(3) supplies a default for a three-member tribunal: each party appoints one arbitrator, and the two appointed arbitrators appoint the third, who acts as the presiding arbitrator. If a party fails to appoint its arbitrator within thirty days of receipt of a request from the other party, or if the two party-appointed arbitrators fail to agree on the third within thirty days of their appointment, Section 11(4) permits the aggrieved party to seek appointment by the court. For a sole-arbitrator reference where the parties cannot agree on the arbitrator within thirty days, Section 11(5) likewise routes the matter to the court.

The referee was originally the Chief Justice or a person or institution designated by him. The 2015 Amendment recast this language: the appointing authority is now the Supreme Court (in international commercial arbitration) or the High Court (in other cases), or any person or institution designated by such Court. Section 11(8) directs the appointing authority to have due regard to the qualifications required of the arbitrator by the agreement and to other considerations likely to secure an independent and impartial arbitrator, while Section 11(6A), inserted in 2015, confined the court's examination at the appointment stage to the existence of an arbitration agreement. The relationship between an appointment under Section 11 and the upstream question of whether a court should refer parties to arbitration is treated separately in our note on the power of the court to refer parties to arbitration.

The Nature of the Section 11 Power: From Administrative to Judicial

The character of the power exercised under Section 11 has had a turbulent history. In Konkan Railway Corpn. Ltd. v. Rani Construction (P) Ltd., (2002) 2 SCC 388, a Constitution Bench had held that the function of the Chief Justice in appointing an arbitrator was purely administrative, leaving all jurisdictional questions to be decided by the tribunal itself under Section 16. This view was decisively overruled by a seven-judge bench in SBP & Co. v. Patel Engineering Ltd., (2005) 8 SCC 618. The Supreme Court held that the power exercised by the Chief Justice or his designate under Section 11(6) is a judicial power and not an administrative one. As a consequence, the Chief Justice was entitled to decide preliminary issues such as the existence and validity of the arbitration agreement, whether the claim was a live claim, and whether the conditions for the exercise of the appointment power were satisfied. By judicialising the appointment, the Court sought to lend greater sanctity and finality to the process.

The expansive scope of judicial inquiry sanctioned by SBP & Co. generated its own problems of delay and over-intervention, which the legislature addressed through Section 11(6A) in 2015, narrowing the court's enquiry at the appointment stage to the existence of an arbitration agreement. The 2019 Amendment went further still, contemplating a shift towards appointment by arbitral institutions designated by the Supreme Court and High Courts, though that provision's commencement has been entangled in transitional difficulties. The trajectory of the law has thus been one of expansion and then deliberate contraction of judicial intervention, in the service of speed without sacrificing the integrity of the appointment.

Independence and Impartiality: The Core Value

Running through the whole of this Block is the non-negotiable requirement that an arbitrator be independent and impartial. Independence speaks to the absence of any relationship with a party that could colour the arbitrator's judgment; impartiality speaks to the absence of bias towards either side or the subject-matter. The Act enforces this value through a positive duty of disclosure and a negative regime of challenge and ineligibility. The standard is objective: as the Supreme Court has repeatedly emphasised, not every subjective apprehension of bias will disqualify an arbitrator. The test is whether a reasonable, fair-minded and informed person, viewing the circumstances, would entertain justifiable doubts about the arbitrator's independence or impartiality. Mere whims, suspicion or strategic dissatisfaction by a losing party are insufficient.

This objective standard mirrors the international benchmarks set by the IBA Guidelines on Conflicts of Interest, whose red, orange and green lists informed the Indian Law Commission's design of the Fifth and Seventh Schedules introduced in 2015. The disclosure obligation is continuous, attaching at the time of appointment and persisting throughout the proceedings, so that a relationship arising mid-arbitration must be disclosed as it arises.

Section 12: Grounds for Challenge and the Disclosure Duty

Section 12 establishes the framework for challenging an arbitrator. Section 12(1), as amended in 2015, casts on a person approached in connection with a possible appointment a duty to disclose in writing any circumstances likely to give rise to justifiable doubts as to independence or impartiality, and any circumstances likely to affect his ability to devote sufficient time and complete the arbitration within twelve months. The disclosure must be made in the form specified in the Sixth Schedule. Section 12(2) extends this duty for the entire duration of the proceedings.

Section 12(3) sets out the two grounds on which an arbitrator may be challenged: first, that circumstances exist which give rise to justifiable doubts as to his independence or impartiality; and second, that he does not possess the qualifications agreed to by the parties. The first ground is fleshed out by the Fifth Schedule, which catalogues the relationships and circumstances that may give rise to justifiable doubts, ranging from financial or business relationships with a party to prior involvement in the dispute. Importantly, the Fifth Schedule is a guide to challenge, not an automatic bar. Section 12(4) restricts a party from challenging an arbitrator it has itself appointed, or in whose appointment it has participated, except for reasons of which it becomes aware after the appointment, a sensible rule preventing a party from sandbagging the tribunal with objections it knew of all along.

Section 12(5) and the Seventh Schedule: Mandatory Ineligibility

The most consequential innovation of the 2015 Amendment is Section 12(5), which introduces a regime of mandatory ineligibility. It provides that, notwithstanding any prior agreement to the contrary, any person whose relationship with the parties, counsel or the subject-matter of the dispute falls within any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator. The Seventh Schedule lists the most serious conflicts, including where the arbitrator is an employee, consultant, advisor or has a past or present business relationship with a party, or has a controlling influence over a party. Unlike the Fifth Schedule, which merely opens a person up to challenge, the Seventh Schedule operates as an absolute disqualification operating by force of law.

The crucial distinction between the two schedules was authoritatively explained in HRD Corporation (Marcus Oil and Chemical Division) v. GAIL (India) Ltd., (2018) 12 SCC 471. The Supreme Court, per Nariman J., held that the existence of a circumstance within the Seventh Schedule renders a person ineligible to act as an arbitrator at once and by operation of law, terminating his mandate de jure, whereas a circumstance within the Fifth Schedule only gives rise to justifiable doubts that must be adjudicated on the facts through the Section 13 challenge procedure. A Seventh Schedule disqualification therefore cannot be cured by the tribunal rejecting a challenge; it goes to the arbitrator's very capacity to act.

The proviso to Section 12(5) supplies the only escape route: the parties may waive the applicability of the subsection, but only by an express agreement in writing entered into after the disputes have arisen. This requirement of an express written, post-dispute waiver is strict and admits of no implication from conduct.

The TRF-Perkins Line: Ineligibility Disables the Power to Appoint

The Supreme Court has drawn out the structural logic of Section 12(5) in two seminal decisions that have reshaped Indian arbitral practice. In TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377, the arbitration clause empowered the Managing Director of one party, or his nominee, to act as the sole arbitrator. The Managing Director was plainly ineligible under the Seventh Schedule because he was an employee of a party. The Court held that once a person is statutorily ineligible to act as an arbitrator, he is equally disabled from nominating another person to be the arbitrator. The Court reasoned that it would be incongruous to permit a person who cannot himself perform the function to delegate it; as it pithily observed, the stream cannot rise higher than the source. The nomination by the ineligible Managing Director was therefore void.

The principle was extended and refined in Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760. Here the clause did not name the interested officer as arbitrator but only as the appointing authority, a distinction the respondent urged took the case outside TRF. The Supreme Court rejected the distinction. It held that a person who has an interest in the outcome of the dispute must not have the power to appoint a sole arbitrator, because the very purpose of the exercise would be to nominate someone of his choosing, and that interest infects the appointment regardless of whether the interested person is himself named arbitrator. The Court held such a unilateral appointment by an interested party to be impermissible. Together, TRF and Perkins have effectively invalidated the once-ubiquitous clauses in government and public-sector contracts that vested unilateral appointment power in one party's officer.

Panel Appointments and the Broad-Based Panel Requirement

A recurring practical question is whether a party may require the other to choose an arbitrator from a panel that the first party itself maintains. The Supreme Court addressed this in Voestalpine Schienen GmbH v. Delhi Metro Rail Corpn. Ltd., (2017) 4 SCC 665. The arbitration clause required Delhi Metro to forward a list of five names drawn from its own panel, from which the contractor had to choose its nominee. The Court upheld the panel mechanism in principle but laid down important safeguards. It held that for such a panel to be valid it must be sufficiently broad-based, drawn from diverse fields and not confined to serving or retired employees of the maintaining party, and the restrictive five-name shortlist requirement was read down. The Court emphasised that the counterbalancing of one party's power to constitute a panel by the other party's genuine freedom of choice is what preserves the appearance of impartiality. Voestalpine remains the touchstone for testing institutional and panel-based appointment clauses against the independence requirement, though its observations on panel breadth have been the subject of later debate at the High Court level.

Section 13: The Challenge Procedure

Section 13 prescribes the procedure for a challenge, again subject to any contrary agreement of the parties. Under Section 13(2), a party intending to challenge an arbitrator must, within fifteen days of becoming aware of the constitution of the tribunal or of any circumstance giving rise to a challenge under Section 12(3), send a written statement of the reasons for the challenge to the tribunal. Section 13(3) provides that, unless the challenged arbitrator withdraws or the other party agrees to the challenge, the arbitral tribunal itself shall decide on the challenge.

A distinctive and much-criticised feature of the scheme is that the challenged arbitrator participates in deciding the challenge against himself, and an unsuccessful challenge does not give an immediate right of recourse to court. Instead, Section 13(4) directs that where a challenge fails, the tribunal shall continue the proceedings and make an award; the aggrieved party's remedy is to apply to set aside that award under Section 34, raising the failed challenge at that stage (Section 13(5)). This deferred-review model is designed to prevent dilatory tactics, but it means a party may have to litigate the entire arbitration before vindicating a meritorious challenge. The position differs critically where the ground is Seventh Schedule ineligibility under Section 12(5): there the arbitrator's mandate is terminated de jure, and the proper route is Section 14, not the Section 13 challenge mechanism, because there is nothing for the tribunal to decide. A party's failure to raise a known objection in time also engages the principles discussed in our note on the waiver of the right to object.

Section 14: Failure or Impossibility to Act

Section 14 deals with the termination of an arbitrator's mandate for reasons distinct from a Section 12 challenge. Under Section 14(1)(a), the mandate of an arbitrator terminates and he is to be substituted if he becomes de jure or de facto unable to perform his functions, or for other reasons fails to act without undue delay. Under Section 14(1)(b), the mandate also terminates if the arbitrator withdraws from office or the parties agree to the termination. Where a controversy remains concerning any of the grounds in clause (a), Section 14(2) permits a party to apply to the court to decide on the termination of the mandate.

The interaction between Sections 12(5) and 14 is of great practical importance. In Bharat Broadband Network Ltd. v. United Telecoms Ltd., (2019) 5 SCC 755, the Supreme Court held that where an arbitrator is ineligible under Section 12(5) read with the Seventh Schedule, he becomes de jure unable to perform his functions within the meaning of Section 14(1)(a), so that his mandate terminates and the appropriate remedy is an application under Section 14, rather than a Section 13 challenge to be decided by the very arbitrator who is disqualified. The case is also the leading authority on waiver under the proviso to Section 12(5): the Court held that the appointment of an arbitrator by a person who is himself ineligible under Section 12(5) is void, and that the ineligibility can be waived only by an express agreement in writing made after the disputes have arisen. Mere participation in the proceedings or failure to object does not amount to waiver, because a waiver is the intentional relinquishment of a known right and cannot be implied from conduct in the teeth of the statutory requirement of an express written agreement.

Section 15: Substitution of Arbitrators

Section 15 completes the scheme by addressing what happens once an arbitrator's mandate ends. Section 15(1) provides that, in addition to the circumstances in Sections 13 and 14, the mandate of an arbitrator terminates where he withdraws from office for any reason or by or pursuant to the agreement of the parties. Section 15(2) then lays down the cardinal rule of substitution: where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. This ensures continuity of the appointment mechanism, so that, for instance, a party-appointed arbitrator who must be replaced is replaced by the same party following the same procedure.

Section 15(3) addresses the fate of the proceedings already conducted. Unless otherwise agreed by the parties, where an arbitrator is replaced, any hearings previously held may be repeated at the discretion of the tribunal. The newly constituted tribunal thus has a controlled discretion to decide whether, and to what extent, prior proceedings must be repeated, balancing the substitute arbitrator's need to be satisfied of the evidence against the cost and delay of re-hearing. Section 15(4) preserves the validity of any order or ruling made by the tribunal prior to the replacement, save where the substituted arbitrator's participation would render it inappropriate. The Supreme Court has read these provisions purposively to keep arbitrations alive across a change in the tribunal's membership rather than forcing a fresh start.

Synthesis: Reading Sections 10-15 as an Integrated Code

Sections 10 to 15 are best understood not as discrete rules but as an integrated code for producing a tribunal in which the parties, and ultimately the courts, can have confidence. Section 10 ensures the tribunal can decide; Section 11 ensures it is lawfully constituted; Section 12 ensures it is independent and impartial, with Section 12(5) carving out a mandatory floor below which party autonomy cannot sink; Section 13 channels challenges; Section 14 removes those who cannot or will not act; and Section 15 ensures continuity through substitution. The post-2015 jurisprudence, anchored by TRF, Perkins, Voestalpine, HRD Corporation and Bharat Broadband, has consistently subordinated contractual freedom to the structural guarantee of an unbiased tribunal wherever the two collide.

For the practitioner, the operative lessons are sharp. Clauses vesting unilateral appointment power in an interested party are now of doubtful validity. Disclosure must be made early, fully and continuously. A Seventh Schedule disqualification is jurisdictional and de jure, to be pursued under Section 14, while a Fifth Schedule concern is a merits question for the Section 13 challenge. And waiver of ineligibility is possible only by an express, post-dispute, written agreement. To place these composition rules in the wider statutory frame, return to the Arbitration and Conciliation Act hub and the related notes on the form and validity of the arbitration agreement.

Frequently asked questions

Can an arbitration agreement that provides for an even number of arbitrators be void?

No. In M.M.T.C. Ltd. v. Sterlite Industries (India) Ltd., (1996) 6 SCC 716, the Supreme Court held that an arbitration agreement is not invalid merely because it stipulates an even number of arbitrators. The validity of the agreement is tested under Section 7, not Section 10. The two arbitrators should appoint a third presiding arbitrator to satisfy the odd-number rule in Section 10(1) and avoid deadlock.

Is the power to appoint an arbitrator under Section 11 administrative or judicial?

Following the seven-judge bench decision in SBP & Co. v. Patel Engineering Ltd., (2005) 8 SCC 618, the power exercised under Section 11(6) is a judicial power, not an administrative one. This overruled the earlier view in Konkan Railway Corpn. Ltd. v. Rani Construction (P) Ltd., (2002) 2 SCC 388. The 2015 Amendment later narrowed the court's enquiry at the appointment stage to the existence of an arbitration agreement through Section 11(6A).

Can a person who is ineligible to be an arbitrator still appoint one?

No. In TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377, the Supreme Court held that a person statutorily ineligible under Section 12(5) and the Seventh Schedule is also disabled from nominating an arbitrator. Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760, extended this to hold that an interested party cannot have the unilateral power to appoint a sole arbitrator at all.

What is the difference between the Fifth Schedule and the Seventh Schedule?

As clarified in HRD Corporation v. GAIL (India) Ltd., (2018) 12 SCC 471, the Seventh Schedule (read with Section 12(5)) renders a person ineligible to act as arbitrator automatically and by operation of law, terminating the mandate de jure. The Fifth Schedule only lists circumstances that give rise to justifiable doubts, which must be adjudicated on the facts through the Section 13 challenge procedure.

How can the ineligibility under Section 12(5) be waived?

Only by an express agreement in writing entered into after the disputes have arisen, as the proviso to Section 12(5) requires. In Bharat Broadband Network Ltd. v. United Telecoms Ltd., (2019) 5 SCC 755, the Supreme Court held that this waiver cannot be implied from conduct or mere participation in proceedings; a waiver is the intentional relinquishment of a known right and must meet the statutory requirement of an express written agreement.

What is the time limit and procedure for challenging an arbitrator under Section 13?

Under Section 13(2), a party must send a written statement of the reasons for the challenge to the tribunal within fifteen days of becoming aware of the tribunal's constitution or of the circumstances justifying the challenge. Unless the arbitrator withdraws or the other party agrees, the tribunal itself decides the challenge under Section 13(3). If the challenge fails, the proceedings continue and the ground is raised when applying to set aside the award under Section 34.