De Jure Ineligibility of Arbitrators for prior rulings on the same issue

Judgment dated 13.10.2026 of the High Court of Delhi in OMP (COMM) No.20 / 2023 of Steel Authority of India Vs.  British Marine PLC with connected matters.

Petitioner is a Public Sector Undertaking under the Ministry of Steel, Government of India and owns and operates multiple integrated steel plants and units. Petitioner avers that it is India’s largest steel producer company and in the ordinary course of its business imports coking coal from various overseas locations for purposes of manufacturing steel. Respondent is an International Ocean Freight Transportation Company which operates and manages a portfolio of owned and chartered-in vessels of Supramax, Handymax (H-MAX) and Panamax (P-MAX) types.

3. At the relevant time, Petitioner’s shipping requirement for imported coal from various locations, under the procedure established by Government of India was arranged by Transchart, a division of Ministry of Shipping. All PSUs and Government of India departments sent their requirements to Transchart, who entered the shipping/freight market on behalf of the PSUs or Government Departments to arrange the ships on their behalf. Transchart entered the market through approved ship brokers to invite the offers for required shipments.

Appointments of the Presiding Arbitrator, Capt. Berry and Co-Arbitrator, Mr. Chakraborty as also their continuance was untenable in law. Both had taken a specific view regarding interpretation of Clause 62 of COA in another arbitral proceeding between the SAIL and M/s SeaSpray Page 11 of 107 O.M.P. (COMM) 20/2023 and connected matter Shipping Company Ltd. (‘SeaSpray’), which gave rise to justifiable doubts on their independence and impartiality. Respondent invoked the instant arbitration on 31.03.2014 in terms of Clause 60 of COA and on 25.06.2014, Arbitral Tribunal comprising of Capt. Berry, Mr. Chakraborty and Mr. Ashok Sharma was constituted, whereafter SoC was filed on 03.03.2016. At this stage, a separate arbitration involving the Petitioner and SeaSpray was ongoing before ICA, where Capt. Berry and Mr. Chakraborty were Co Arbitrators and on 01.09.2014, the said Arbitral Tribunal passed the final award. Upon analysis of the award, Petitioner realised that the Arbitral Tribunal had taken a view regarding interpretation of Clause 62 of COA, which did not favour the Petitioner and there was high probability that the two Arbitrators would take the same view in the instant arbitration and therefore, Petitioner raised an objection on ground of ‘issue conflict’. It is only natural that having taken a view on interpretation of Clause 62, the two Arbitrators would confirm to their view and the likelihood of the award being passed against the Petitioner could not be ruled out. Ideally, the two Arbitrators ought to have recused themselves on ground of issue conflict, but they did not do so even on an objection being raised and this resulted in the inevitable consequence of the award being passed against the Petitioner since interpretation of Clause 62 was the backbone of the argument of the Petitioner. Thus the award deserves to be set aside on the sole ground that Capt. Berry and Mr. Chakraborty were de jure disqualified in terms of Section 14(1)(a) of 1996 Act applying the doctrine of issue conflict and this ineligibility goes to the root of the matter.

The de jure ineligibility of Capt. Berry and Mr. Chakraborty to continue as Arbitrators also has its roots in Entry 24 of the Fifth Schedule to 1996 Act, which provides: “The arbitrator currently serves, or has served Page 19 of 107 O.M.P. (COMM) 20/2023 and connected matter within the past three years, as arbitrator in another arbitration on a related issue involving one of the parties or an affiliate of one of the parties”. Having interpreted Clause 62 in the SeaSpray Arbitration, the two Arbitrators had within the past three years decided on a related issue involving one of the parties and their appointment and continuation was thus hit by Section 12(1) of 1996 Act.

Notably, obligation to make the disclosure is also mandatory under the Maritime Arbitration Rules, 2012, which incorporate a provision similar to Section 12(2) of 1996 Act i.e., duty to disclose circumstances giving rise to justifiable doubts as to independence or impartiality at the time of appointment and throughout the arbitral proceedings. Maritime Rules specifically provide Guidelines for Arbitrators and parties and both are Page 21 of 107 O.M.P. (COMM) 20/2023 and connected matter expected to follow them to ensure economic and expeditious disposal of arbitration cases. In particular, Guideline 4 lays emphasis on disclosures to be rendered by the Arbitrator as follows:- “4. When giving notice of his acceptance, the arbitrator shall disclose in writing in the printed format as under: – any relationship with the parties or their counsel which may affect his independence and impartiality; – any personal or economic interest, either direct or indirect, in the subject matter of the dispute; – any prejudice or reservation as to the subject matter of the dispute which may affect his impartiality. – Where necessary due to supervening facts, this Statement shall be repeated in the course of the entire arbitral proceedings until the award is filed.” 24. (emphasis supplied) Additionally, Guideline 5 underscores the importance of disclosure required under Guideline 4 and also provides consequences of failure and subsequent discovery of facts not disclosed. Guideline 5 is as follows:- “5. Where facts that should have been disclosed are subsequently discovered, the arbitrator may either withdraw or be challenged or the Indian Council of Arbitration may refuse to appoint him in other arbitral proceedings on this ground” (emphasis supplied.

43. ‘Issue conflict’ is a species of ‘impartiality’ and no doubt a recognized doctrine. The concept essentially means and connotes pre-judging legal issues based on previous opinions/judgments of Arbitrators. In other words, if an Arbitrator has decided an issue in one arbitration and is called upon to decide the same issue in another arbitration, there is a likelihood that his vision on that issue will be coloured by the view taken earlier and a party to the second arbitration may perceive this to be an obstruction in the ability of the Arbitrator to decide with an open mind, since there will be a tendency to confirm to the earlier opinion or view. Distinct from independence of an Arbitrator, ‘partiality’ is defined in the IBA Rules of Ethics for International Arbitrators 1987 as : “Partiality arises where an arbitrator favours one of the parties, or where he is prejudiced in relation to the subject-matter of the dispute.” Impartiality is therefore, related to the mind of an Arbitrator and under Article 12(1) of UNCITRAL Arbitration Rules 2013, appointment of Page 34 of 107 O.M.P. (COMM) 20/2023 and connected matter an Arbitrator can be challenged if circumstances exist that give rise to justifiable doubts as to Arbitrator’s impartiality or independence and to the same effect is Section 12(1) of 1996 Act. 44. Issue Conflict has been broadly identified in three categories: (i) where Arbitrator serves or has served as a counsel or expert in matters dealing with issues similar to those arising in the concerned arbitration, commonly referred to as ‘double-hatting’; (ii) where Arbitrator makes professional statements on similar issues; or (iii) where Arbitrator has decided similar/same issues in previous arbitration(s). Present case, as per the Petitioner falls in the third category. There are different views with respect to issue conflict. One view is that if an Arbitrator has decided a similar issue, there is apprehension that his commitment to the position adopted will cloud his open-mindedness but the other view is that in certain fields there is a relatively smaller and restricted pool of Arbitrators owing to the technicalities involved, such as in Charterparty agreements and thus it is important to draw a line between harmless predisposition of an Arbitrator and a case of apparent partiality or bias arising from pre-judgment of the issue leading to disqualification or ineligibility of the Arbitrator.

From a conspectus of the aforesaid judgments, it is palpably clear that merely because an Arbitrator has decided an issue in another arbitration where one party may be common to the arbitration in question, is by itself not a ground to hold that there are justifiable doubts on the impartiality of the Arbitrator rendering him ineligible under Section 12 of the 1996 Act. It must be shown that Arbitrator’s ability to decide the issue arising in the second case is clouded and that he will not be able to approach the issue with an open mind so as to do justice to the party. It is not uncommon in arbitration regime for same Arbitrators to be appointed in multiple Page 46 of 107 O.M.P. (COMM) 20/2023 and connected matter references involving same or common parties with same or similar questions of law. It is equally not uncommon that parties prefer to appoint same Arbitrators for different contracts involving similar questions or in fresh arbitrations, where there are pending arbitrations involving similar issues. The reason to make such a choice is the familiarity of the Arbitrator with the background, technical details and nuances as also complicated legal issues, which in turn leads to more informed, efficient and expeditious adjudication. In many International Institutional arbitrations under ICC, SIAC etc., it is a common practice for Arbitrators to preside over multiple related disputes involving the same issues and parties, particularly, where Arbitrator is chosen for its subject-matter expertise or where the disputes arise in related contracts where arbitrations are ongoing in respect of master contracts. Illustratively, in a number of standard format contracts or contracts arising under framework agreements such as Franchise Agreements, EPC Contracts, Power Purchase Contracts, invariably Arbitrators rule on aspects of delay, force majeure, liquidated damages etc., and in my view, the mere fact that an Arbitrator has rendered a particular interpretation on any of these aspects, cannot automatically lead to his disqualification to decide a similar issue in a subsequent arbitration, unless it is substantially demonstrated that the Arbitrator will be unable to decide objectively, impartially or independently. Law does not treat mere prior knowledge of a subject or decision on the issue as per se bias, unless it is coupled with proof that having prejudged the issue, the Arbitrator will decide the same with closed mind and subjectively or that on an earlier occasion the Arbitrator was not impartial or independent.

Applying the aforementioned judgements to the present case and tested on the anvil of the law laid down and observations made, in my view, Capt. Berry and Mr. Chakraborty were not de jure ineligible on the touchstone of doctrine of issue conflict. No doubt both had dealt with interpretation of Clause 62 in the SeaSpray arbitration and taken a particular view, but as elucidated in the aforesaid judgments, this by itself is not a disqualification sans any evidence that the Arbitrators will decide the issue with a closed mind and without any objectivity or were not impartial in the earlier arbitration involving the Petitioner, which I may note, Petitioner has failed to demonstrate. Objection of the Petitioner is mere presence based and no cogent material has been placed which shows that the two Arbitrators Applying the aforementioned judgements to the present case and tested on the anvil of the law laid down and observations made, in my view, Capt. Berry and Mr. Chakraborty were not de jure ineligible on the touchstone of doctrine of issue conflict. No doubt both had dealt with interpretation of Clause 62 in the SeaSpray arbitration and taken a particular view, but as elucidated in the aforesaid judgments, this by itself is not a disqualification sans any evidence that the Arbitrators will decide the issue with a closed mind and without any objectivity or were not impartial in the earlier arbitration involving the Petitioner, which I may note, Petitioner has failed to demonstrate. Objection of the Petitioner is mere presence based and no cogent material has been placed which shows that the two Arbitrators Page 48 of 107 O.M.P. (COMM) 20/2023 and connected matter were partial or decided with a predetermined disposition. This contention is thus rejected. 55. Insofar as the contention that the two Arbitrators did not give a declaration in the format prescribed under Sixth Schedule of the 1996 Act is concerned, be it noted that as a matter of fact, disclosure was given albeit not in the format given in Sixth Schedule since the disclosure was given prior to the amendment in Section 12. The question whether this is enough to hold that the two Arbitrators were de jure ineligible and consequently, the award vitiates on this ground in the present case, is to be answered in the negative both in law and on a factual note Applying the aforementioned judgements to the present case and tested on the anvil of the law laid down and observations made, in my view, Capt. Berry and Mr. Chakraborty were not de jure ineligible on the touchstone of doctrine of issue conflict. No doubt both had dealt with interpretation of Clause 62 in the SeaSpray arbitration and taken a particular view, but as elucidated in the aforesaid judgments, this by itself is not a disqualification sans any evidence that the Arbitrators will decide the issue with a closed mind and without any objectivity or were not impartial in the earlier arbitration involving the Petitioner, which I may note, Petitioner has failed to demonstrate. Objection of the Petitioner is mere presence based and no cogent material has been placed which shows that the two Arbitrators Page 48 of 107 O.M.P. (COMM) 20/2023 and connected matter were partial or decided with a predetermined disposition. This contention is thus rejected. 55. Insofar as the contention that the two Arbitrators did not give a declaration in the format prescribed under Sixth Schedule of the 1996 Act is concerned, be it noted that as a matter of fact, disclosure was given albeit not in the format given in Sixth Schedule since the disclosure was given prior to the amendment in Section 12. The question whether this is enough to hold that the two Arbitrators were de jure ineligible and consequently, the award vitiates on this ground in the present case, is to be answered in the negative both in law and on a factual note Applying the aforementioned judgements to the present case and tested on the anvil of the law laid down and observations made, in my view, Capt. Berry and Mr. Chakraborty were not de jure ineligible on the touchstone of doctrine of issue conflict. No doubt both had dealt with interpretation of Clause 62 in the SeaSpray arbitration and taken a particular view, but as elucidated in the aforesaid judgments, this by itself is not a disqualification sans any evidence that the Arbitrators will decide the issue with a closed mind and without any objectivity or were not impartial in the earlier arbitration involving the Petitioner, which I may note, Petitioner has failed to demonstrate. Objection of the Petitioner is mere presence based and no cogent material has been placed which shows that the two Arbitrators Applying the aforementioned judgements to the present case and tested on the anvil of the law laid down and observations made, in my view, Capt. Berry and Mr. Chakraborty were not de jure ineligible on the touchstone of doctrine of issue conflict. No doubt both had dealt with interpretation of Clause 62 in the SeaSpray arbitration and taken a particular view, but as elucidated in the aforesaid judgments, this by itself is not a disqualification sans any evidence that the Arbitrators will decide the issue with a closed mind and without any objectivity or were not impartial in the earlier arbitration involving the Petitioner, which I may note, Petitioner has failed to demonstrate. Objection of the Petitioner is mere presence based and no cogent material has been placed which shows that the two Arbitrators Page 48 of 107 O.M.P. (COMM) 20/2023 and connected matter were partial or decided with a predetermined disposition. This contention is thus rejected. 55. Insofar as the contention that the two Arbitrators did not give a declaration in the format prescribed under Sixth Schedule of the 1996 Act is concerned, be it noted that as a matter of fact, disclosure was given albeit not in the format given in Sixth Schedule since the disclosure was given prior to the amendment in Section 12. The question whether this is enough to hold that the two Arbitrators were de jure ineligible and consequently, the award vitiates on this ground in the present case, is to be answered in the negative both in law and on a factual note Applying the aforementioned judgements to the present case and tested on the anvil of the law laid down and observations made, in my view, Capt. Berry and Mr. Chakraborty were not de jure ineligible on the touchstone of doctrine of issue conflict. No doubt both had dealt with interpretation of Clause 62 in the SeaSpray arbitration and taken a particular view, but as elucidated in the aforesaid judgments, this by itself is not a disqualification sans any evidence that the Arbitrators will decide the issue with a closed mind and without any objectivity or were not impartial in the earlier arbitration involving the Petitioner, which I may note, Petitioner has failed to demonstrate. Objection of the Petitioner is mere presence based and no cogent material has been placed which shows that the two Arbitrators Page 48 of 107 O.M.P. (COMM) 20/2023 and connected matter were partial or decided with a predetermined disposition. This contention is thus rejected. 55. Insofar as the contention that the two Arbitrators did not give a declaration in the format prescribed under Sixth Schedule of the 1996 Act is concerned, be it noted that as a matter of fact, disclosure was given albeit not in the format given in Sixth Schedule since the disclosure was given prior to the amendment in Section 12. The question whether this is enough to hold that the two Arbitrators were de jure ineligible and consequently, the award vitiates on this ground in the present case, is to be answered in the negative both in law and on a factual note Applying the aforementioned judgements to the present case and tested on the anvil of the law laid down and observations made, in my view, Capt. Berry and Mr. Chakraborty were not de jure ineligible on the touchstone of doctrine of issue conflict. No doubt both had dealt with interpretation of Clause 62 in the SeaSpray arbitration and taken a particular view, but as elucidated in the aforesaid judgments, this by itself is not a disqualification sans any evidence that the Arbitrators will decide the issue with a closed mind and without any objectivity or were not impartial in the earlier arbitration involving the Petitioner, which I may note, Petitioner has failed to demonstrate. Objection of the Petitioner is mere presence based and no cogent material has been placed which shows that the two Arbitrators Page 48 of 107 O.M.P. (COMM) 20/2023 and connected matter were partial or decided with a predetermined disposition. This contention is thus rejected. 55. Insofar as the contention that the two Arbitrators did not give a declaration in the format prescribed under Sixth Schedule of the 1996 Act is concerned, be it noted that as a matter of fact, disclosure was given albeit not in the format given in Sixth Schedule since the disclosure was given prior to the amendment in Section 12. The question whether this is enough to hold that the two Arbitrators were de jure ineligible and consequently, the award vitiates on this ground in the present case, is to be answered in the negative both in law and on a factual notePage 48 of 107 O.M.P. (COMM) 20/2023 and connected matter were partial or decided with a predetermined disposition. This contention is thus rejected. 55. Insofar as the contention that the two Arbitrators did not give a declaration in the format prescribed under Sixth Schedule of the 1996 Act is concerned, be it noted that as a matter of fact, disclosure was given albeit not in the format given in Sixth Schedule since the disclosure was given prior to the amendment in Section 12. The question whether this is enough to hold that the two Arbitrators were de jure ineligible and consequently, the award vitiates on this ground in the present case, is to be answered in the negative both in law and on a factual notePage 48 of 107 O.M.P. (COMM) 20/2023 and connected matter were partial or decided with a predetermined disposition. This contention is thus rejected. 55. Insofar as the contention that the two Arbitrators did not give a declaration in the format prescribed under Sixth Schedule of the 1996 Act is concerned, be it noted that as a matter of fact, disclosure was given albeit not in the format given in Sixth Schedule since the disclosure was given prior to the amendment in Section 12. The question whether this is enough to hold that the two Arbitrators were de jure ineligible and consequently, the award vitiates on this ground in the present case, is to be answered in the negative both in law and on a factual note