BOMBAY HIGH COURT: WAIVER OF ARBITRATOR'S INELIGIBILITY MUST BE MADE BY AGREEMENT IN WRITING, SECTION 12(5) DOES NOT PROVIDE FOR DEEMED CONSENT

The Bombay High Court in the case Riak Insurance and Financial Services & Ors. vs HDFC Bank Limited observed and has held that the ineligibility of the arbitrator could only be waived if both parties agree by an express agreement in writing as per Section 12(5) of the Arbitration Act.

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The Parties' consent cannot be implied otherwise.

The single bench of Justice RI Chagla was hearing the present case.

Facts of the Case: The Petitioners entered into a User Car Dealer/DSA Agreement, the Agreement with HDFC Bank Limited i.e., the respondent. The Clause 22 of the Agreement had an arbitration clause. It has been stipulated that the disputes between the parties were to be referred to a Sole Arbitrator nominated by the Respondent.

The Respondent demanded certain payments allegedly due under the Agreement and in case of failure to pay, the Respondents were intimidated that they'd be constrained to appoint a sole arbitrator as per the agreement. Thus, the Petitioners replied by disputing the amount owed and requesting a copy of the Agreement.