Section 12 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 12 protects the independence and impartiality of the tribunal. It requires a person approached to act as arbitrator to disclose in writing certain circumstances, keeps that duty alive throughout the proceedings, limits the grounds on which an arbitrator can be challenged, and makes certain persons ineligible to be appointed.
A person approached as arbitrator must disclose in writing any circumstances that are likely to give rise to justifiable doubts as to independence or impartiality and any that are likely to affect his ability to devote sufficient time, in particular to complete the arbitration within a period of twelve months. The duty continues from appointment and throughout the proceedings. An arbitrator may be challenged only on two grounds. A person in a category under the Seventh Schedule is ineligible, unless the parties waive this by express agreement in writing made after disputes have arisen. This is as per the India Code consolidated text consulted.
About the text consulted
We read section 12 from the India Code consolidated text, where it stands in Chapter III of Part I, "Composition of arbitral tribunal". Section 12 refers to three Schedules: the Fifth Schedule (Explanation 1), the Sixth Schedule (Explanation 2) and the Seventh Schedule (sub-section (5)). Each of the three has its own article in this series: the Fifth Schedule, the Sixth Schedule and the Seventh Schedule. This article therefore lists nothing from them. Read them before you rely on any disclosure or ineligibility point.
The footnotes show that sub-section (1) was substituted, and sub-section (5) inserted, by s. 8 of Act 3 of 2016, with effect from 23-10-2015. If you are choosing or being asked to accept an arbitrator, arbitration support can help you check the disclosure and the eligibility questions before the appointment is final.
Sub-section (1): disclosure by a person approached
When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances:
- (a) such as the existence, direct or indirect, of any past or present relationship with or interest in any of the parties or in relation to the subject-matter in dispute, whether financial, business, professional or of any other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality; and
- (b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of twelve months.
The two clauses are joined by "and" in the text. Two Explanations follow:
- Explanation 1. The grounds stated in the Fifth Schedule "shall guide" in determining whether circumstances exist which give rise to justifiable doubts as to independence or impartiality.
- Explanation 2. The disclosure shall be made in the form specified in the Sixth Schedule.
On the history, the footnote says only that sub-section (1) was substituted "for sub-section (1)"; the earlier wording is not reproduced, so no comparison is made here. Note the structure of what is printed: clause (a) gives examples of relationships and interests ("financial, business, professional or other kind"), clause (b) adds a separate limb about time, and the two Explanations tie the sub-section to the Fifth and Sixth Schedules.
The twelve-month figure in clause (b) is the same period that section 29A(1) uses for making the award; see section 29A.
Sub-section (2): the duty continues
An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall, without delay, disclose to the parties in writing any circumstances referred to in sub-section (1), unless they have already been informed of them by him.
So disclosure is not a one-time act. A relationship that arises mid-way, for example a new business tie with a party's affiliate, must be disclosed without delay. For a party, it is worth keeping the written record of each disclosure, because section 4 can treat silence after knowledge as a waiver; see sections 3 and 4.
Sub-section (3): the two grounds of challenge
An arbitrator may be challenged only if:
| Ground | Text |
|---|---|
| (a) | Circumstances exist that give rise to justifiable doubts as to his independence or impartiality |
| (b) | He does not possess the qualifications agreed to by the parties |
The word "only" matters: these are the grounds in this section. How and when the challenge is made is in section 13, explained in our article on the challenge procedure.
Sub-section (4): challenging your own choice
A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made. If you knew of the problem when you appointed or helped appoint the arbitrator, this sub-section does not give you that ground afterwards.
A worked example
Chopra Realty nominates Mr. Anand as its arbitrator. A month later, Chopra learns that Mr. Anand's firm advises a major lender of the opposing party. Under sub-section (4), Chopra may challenge only for a reason it became aware of after appointment, so the date of its knowledge matters; it should write down when and how it learned. Under sub-section (2), Mr. Anand should have disclosed the relationship in writing without delay if it arose or existed after appointment and the parties had not already been informed.
Sub-section (5): ineligibility
"Notwithstanding any prior agreement to the contrary", any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator. The categories are set out in our article on the Seventh Schedule, so none is listed here.
The proviso: the parties may, subsequent to disputes having arisen between them, waive the applicability of sub-section (5) by an express agreement in writing. A waiver in the original contract, before any dispute, does not satisfy the proviso as printed.
How section 12 connects to other sections
- Appointment. Appointment itself is dealt with in section 11; see our post on section 11. Section 10 fixes the number; see section 10.
- Challenge and failure to act. Challenge procedure is in section 13, and termination of the mandate in sections 14 and 15; see sections 14 and 15.
- Mediation Act, 2023. Section 17 of the Mediation Act, 2023 provides that a mediator shall not act as an arbitrator, or as a representative or counsel of a party, in any arbitral or judicial proceeding in respect of a dispute that is the subject matter of the mediation proceedings. Its commencement is by notification, date not in the sources consulted, so we do not say whether it is in force. See the Mediation Act cluster article on the role of the mediator.
Practical steps for a business
- Ask any proposed arbitrator for the written disclosure before agreeing to the name.
- Read the Fifth, Sixth and Seventh Schedules alongside the disclosure, using the articles linked above and the official text.
- Record the date each fact becomes known to you.
- Put a clause in the agreement requiring continuing disclosure, consistent with sub-section (2).
- If a challenge may be needed, move to section 13 without delay.
Need help with an arbitrator's disclosure or a challenge?
An arbitrator's independence can decide whether an award stands. Our arbitration support team can review the disclosure, the eligibility position and your options with you.
Key takeaways
- A person approached must disclose in writing circumstances that give rise to justifiable doubts as to independence or impartiality, and circumstances affecting time, including completion within twelve months.
- The duty to disclose continues from appointment throughout the proceedings.
- An arbitrator may be challenged only if there are justifiable doubts or if he lacks the qualifications agreed by the parties.
- You may challenge your own appointee only for reasons you learn of after the appointment.
- Seventh Schedule categories are ineligible; a waiver needs an express agreement in writing after disputes have arisen.
- The Fifth, Sixth and Seventh Schedules are explained in separate articles of this series.
Read next
- Section 13: challenge procedure for an arbitrator
- Sections 14 and 15: failure to act, termination of mandate and substitution
- Appointment of arbitrator: section 11
- Mediation Act, 2023: role of the mediator
Disclaimer: Based on the India Code consolidated text of the Arbitration and Conciliation Act, 1996, whose footnotes show amendments up to Act 3 of 2021 and a latest date of 12 October 2023, as consulted on 2 October 2026. Rules, regulations and notifications under the Act, later amendments and the commencement of the Mediation Act, 2023 should be checked. This article is general information, not legal advice; check the official text before acting.