Best Arbitrator Not Neutral? How to Challenge the Arbitrator Lawyer

An arbitration is only as fair as the person deciding it. If the arbitrator is an employee, adviser or regular lawyer of the other side, or was chosen by the other side alone, or has some other link that makes you doubt their independence, the law gives you ways to object. Some links make a person legally ineligible to act at all. Others give rise to justifiable doubts that can be the basis of a challenge.

This page is for parties who have concerns about an arbitrator, whether appointed by the other side, by an institution, or even by agreement. In short: if the arbitrator falls within the Seventh Schedule, the appointment is void unless you expressly waived it in writing after the dispute arose, and you can go to court under Section 14; if the concern is about independence or impartiality more generally, you must challenge before the tribunal within 15 days of learning the grounds under Section 13, and if that fails, raise it in a Section 34 challenge to the award.

Acting promptly and in writing is essential. Silence and participation can be used against you.

Is this your situation?

Two kinds of problem

Ineligibility under Section 12(5)

Section 12(5), added in 2015, says that notwithstanding any prior agreement, any person whose relationship with the parties or counsel or the subject matter of the dispute falls under any of the categories in the Seventh Schedule is ineligible to be appointed as an arbitrator. The proviso allows the parties, after the dispute has arisen, to waive this by an express agreement in writing.

The Seventh Schedule lists relationships such as: being an employee, consultant, adviser or having any other past or present business relationship with a party; being a manager, director or part of the management of a party; regularly advising a party or its affiliate; having a significant financial interest in a party or the outcome; being a close family member of a party; and having previous involvement in the case.

In Bharat Broadband Network v United Telecoms (2019), the Supreme Court held that an ineligible arbitrator's mandate terminates automatically, that participation in the proceedings is not a waiver, and that a waiver must be express and in writing after the dispute. In TRF v Energo (2017) and Perkins Eastman v HSCC (2019), it extended this to appointments made by ineligible persons and by interested parties. In CORE (2024), a five-judge bench confirmed that unilateral control over the tribunal offends equal treatment.

How to challenge an arbitrator

Time and typical cost range

Our fees are agreed in writing at the start, stage by stage, and are not linked to the outcome.

Documents needed

Which route for which problem

Fifth Schedule doubts and the 15-day rule

Not every concern makes an arbitrator ineligible. The Fifth Schedule lists circumstances that may give rise to justifiable doubts about independence or impartiality, such as an arbitrator who has, within the past three years, been appointed as arbitrator on two or more occasions by one of the parties or an affiliate; a close personal friendship with a party or counsel; or prior involvement with the dispute. These are not automatic bars. They are grounds for challenge if they create justifiable doubts.

Section 13(2) requires a party who intends to challenge to send a written statement of reasons to the tribunal within 15 days of becoming aware of the constitution of the tribunal or of the circumstances. The tribunal decides the challenge unless the arbitrator withdraws or the other party agrees. If the challenge fails, the tribunal continues and makes its award, and the challenging party can apply under Section 34 to set aside the award on that ground.

Because of the 15-day limit, read disclosures carefully as soon as they arrive, and act promptly when new information comes to light.

Loan and standard-form contracts

The largest number of arbitrator challenges in India arise from loan agreements and standard-form contracts in which the lender or company appoints the arbitrator. Many such appointments are of advocates who act regularly for the same lender, sometimes in hundreds of cases. Such an advocate may fall within the Seventh Schedule as having a business relationship with the party, and the appointment by the lender alone is invalid under Perkins Eastman.

In September 2026, in Arth Micro Finance v Shivalik Small Finance Bank, the Supreme Court refused to accept a lender's assertion that the borrowers had consented to its chosen tribunal without proof, declared the arbitration of no legal effect, set aside interim orders, and appointed a new arbitrator. For borrowers, the message is clear: object in writing, do not sign consent forms, and do not assume that taking part waives your objection. See bank and NBFC loan arbitration.

Laws that apply

How we work

We are a litigation and advisory practice led by Advocate BK Singh, with offices in Dwarka (New Delhi) and Vaishali (Ghaziabad). This is what you can expect:

• Prompt action: challenges filed within the 15-day window.
• Proper investigation: relationships checked before alleging bias.
• Right forum: tribunal challenge, Section 14 or Section 11, as the facts require.
• No accidental waivers: objections recorded at every stage.
• Written fee terms: agreed stage by stage, never linked to the outcome.

Mistakes in challenging arbitrators

What happens to the proceedings after a successful challenge

When an arbitrator withdraws, is removed, or their mandate terminates, Section 15 provides that a substitute arbitrator shall be appointed according to the rules that applied to the original appointment. If the original appointment was by the other side alone and was invalid, the substitute must be appointed in a valid way, by agreement, by an institution, or by the court under Section 11.

Section 15(3) says that, unless otherwise agreed, any hearings previously held may be repeated at the discretion of the new tribunal. Section 15(4) says that orders or rulings made before the replacement are not invalid solely because of the change. In Ankhim Holdings v Zaveri Construction (February 2026), the Supreme Court held that earlier proceedings do not automatically become a nullity on substitution, and that the substitute should continue from the stage reached. Where the original arbitrator was ineligible from the start, however, earlier orders may be open to question, and parties should ask the new tribunal to decide what stands.

Challenging institutional appointments

Arbitrators appointed by institutions such as DIAC, IIAC, MCIA or SIAC are usually independent of both parties, but challenges can still arise if the arbitrator has an undisclosed relationship. Institutional rules usually provide their own challenge procedure, with a time limit and a decision by the institution's court or council, which applies in place of Section 13's default procedure where the parties have agreed to the rules. Ineligibility under Section 12(5) still applies to India-seated arbitrations regardless of institutional rules.

Read the institution's rules on challenges as soon as the tribunal is constituted, so that you know the deadline and the procedure.

Arbitrator conduct during the case

Sometimes concerns arise not from a relationship but from the arbitrator's conduct: refusing reasonable adjournments to one side while granting them to the other, receiving documents from one side without sharing them, holding private communications with one party, or making remarks that suggest prejudgment. These can give rise to justifiable doubts about impartiality.

Record each incident in writing at the time, through a letter to the tribunal copied to the other side. If the pattern continues, a Section 13 challenge may be justified. Conduct-based challenges must still be made within 15 days of the conduct that gives rise to the doubt. After the award, the same conduct may support a Section 34 challenge on the grounds that you were unable to present your case or that the award conflicts with the basic notions of justice.

If you are the party who appointed the arbitrator

If you appointed or agreed to an arbitrator and the other side challenges, take the challenge seriously. If the arbitrator falls within the Seventh Schedule and there was no written waiver after the dispute, the appointment cannot stand, and defending it only delays the case and risks the award being set aside later. It is usually better to agree to a substitute promptly.

If the challenge is based on Fifth Schedule circumstances that do not create justifiable doubts, such as a remote or historic connection, respond with the facts and the arbitrator's disclosure. Tribunals and courts reject challenges that are tactical or unsupported.

Repeat appointments and the "three-year" rule

One Fifth Schedule ground that arises often is that the arbitrator has, within the past three years, been appointed as arbitrator on two or more occasions by one of the parties or an affiliate. This is common where a lender, a PSU or a large company uses the same arbitrators repeatedly. The ground is not an automatic bar, but it can support a challenge if, taken with other facts, it creates justifiable doubts.

Where the number of appointments is large, the arbitrator's dependence on the appointing party for income becomes a real concern. In loan arbitrations, where an advocate may have been appointed by the same lender in hundreds of cases, this point is often decisive, and may also amount to a "business relationship" under the Seventh Schedule. Ask the arbitrator, in writing, how many times they have been appointed by the other side and its affiliates in the past three years.

Fees, and arbitrators who will not step down

Occasionally, an arbitrator whose independence has been challenged declines to withdraw and continues to demand fees. You are entitled to continue objecting, and to refuse to pay fees to an arbitrator you contend is ineligible, though non-payment may be used by the other side as a reason to proceed in your absence. The safer course is often to apply to the court under Section 14 promptly for a decision on termination of the mandate, and under Section 11 for a substitute, so that the dispute moves forward before a properly constituted tribunal.