The Delhi High Court has dismissed Steel Authority of India Limited’s (SAIL) claims of arbitrator bias, ruling that an arbitrator’s previous interpretation of similar contractual clauses in a different maritime case does not inherently create reasonable doubts about their impartiality, as per Section 12 of the Arbitration and Conciliation Act, 1996. The Bench emphasized that in specialized fields with a limited number of experts, imposing strict conflict standards could lead to a shortage of qualified arbitrators, ultimately hindering the goal of efficient dispute resolution.
The court upheld the arbitral award favoring British Marine PLC, stating that an “issue conflict” does not equate to disqualifying bias unless it can be shown that the arbitrator approached the new dispute with a biased mindset. The judges noted that SAIL’s late challenge, raised months after they learned about the arbitrators’ appointments and beyond the stipulated 15-day objection period, constituted a waiver of their right to contest.
The court highlighted the necessity for domain knowledge in maritime contracts, asserting that the presence of an arbitrator with experience in similar disputes does not automatically imply bias. It further noted that the limited pool of qualified arbitrators necessitates a more flexible approach to conflicts of interest to ensure timely dispute resolution. SAIL had previously entered into a Contract of Affreightment with British Marine in 2007, which was later terminated due to alleged breaches, leading to the arbitration process that ultimately favored British Marine.
