Appointment of shareholder as arbitrator
A dispute that I had with a company has been referred to arbitration. However, the arbitrator who has been appointed is a shareholder in the company. Is such an appointment illegal?
Such an appointment is illegal according to Section 12(5) of the Arbitration and Conciliation Act, 1996 which states that certain relationships between an arbitrator and party will bar the former from acting as one. The relationships are given in the Seventh Schedule where a scenario as the one you've mentioned is present as well.
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