For the arbitration process to occur smoothly, the appointment of arbitrators must be made in a manner that suits the procedure laid down in the Arbitration and Conciliation Act, 2015. It is a commonly known fact that since the purpose of arbitration is to offer a satisfactory means of settlement to the parties involved, the right to choose and appoint an arbitrator of their own choice is a freedom given to the parties by the law governing the arbitration procedures in the country. This article will briefly mention the legal provision surrounding the process of appointment and nomination of arbitrators.
Section 11 of the Arbitration and Conciliation Act, 2015.
The key features of this particular section include the following points:
- The procedure for the appointment of arbitrators must be decided with the consent of both parties
- The arbitrator’s nationality is not a matter of concern, as long as the parties have not made any special requests for the same
- The arbitration process requires the appointment of two arbitrators (one from each party) and the appointment of a third arbitrator (the presiding arbitrator), who the two arbitrators of the case shall appoint.
- The person being appointed or nominated as an arbitrator to the case must qualify and be eligible to act in that capacity, failing which his appointment may be disqualified, in addition to which, said the procedure of law would also nullify an individual’s appointment of an arbitrator (the presiding arbitrator).
- When there is an absence of a contrary provision in the parties’ agreement, the presiding arbitrator can take the procedure of arbitration into his own hands if there is any disagreement between the other two arbitrators at any point.
- Section 11 empowers the interference of the judiciary, more specifically the Chief Justice, in matters where there is non-performance of agreed-upon terms or failure of appointment of arbitrators within thirty days by any means.
- If there is a dispute between the parties or disagreement about the appointment of an arbitrator, the court can intervene and appoint a sole arbitrator to preside over the case.
- A disagreement between the appointed arbitrators on the topic of the appointment of a presiding arbitrator may also invoke the intervention of the court to carry out such an appointment of the presiding arbitrator.
- The court can also interfere in the appointment of any such arbitrators deemed unsatisfactory or even when such an appointment raises questions of validity under the procedure of law.
Central Organisation for Railway Electrification vs. M/S ECI-SPIC-SMO-MCML (JV) (2020)
The law related to the scope of the appointment of arbitrators has evolved with time, and this case is a testimony about the stance of the court on the subject matter.
The parties to this case were involved in a disagreement about the appointment of an arbitrator for their particular case. As stated in the provision of s.11 of the Act, the Supreme Court intervened on the matter at hand, and the following points made up as the main takeaways from the judgment of the case, vis-à-vis the procedure of appointment of arbitrators in an ADR case.
- The court reiterated the need for the appointment of an arbitrator to be done according to the terms which have been mutually agreed upon by the parties.
- This need for this liberty provided to parties for arbitrator appointments has been put to nullify any misbalance of power among the parties.
- Since there was no meeting of minds between the parties regarding the appointment, the court-appointed a sole arbitrator to preside over the case's proceedings.
The law has ample provisions to ensure that there is no obstruction in the delivery of justice during arbitration dispute proceedings, and precedent judgments can back up the same.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.