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Relevance of judgment in Perkins Eastman Architects DPC. v. HSCC (India) Limited to ongoing arbitrations
Relevance of judgment in Perkins Eastman Architects DPC. v. HSCC (India) Limited to ongoing arbitrations
The power of a party to unilaterally appoint a sole arbitrator in India has been a subject matter of a lot of judicial proceedings and discussions for quite a while. The unilateral appointment of an arbitrator refers to a situation during which one party to the arbitration agreement is given sole authority to appoint an intermediary, just in case a relation to arbitration is created by either of the parties.
Such clauses are quite common in government contracts, contracts with monetary establishments etc., wherever a high-ranking official of the tendering authority, says the Chief Engineer, is given the authority to appoint an arbitrator just in case relation to arbitration is created by either the tendering authority or the contractor. Recently, the Supreme Court within the case of Perkins Eastman Architects DPC v. HSCC (India) Ltd[1] (hereinafter said as “Perkins judgment”) has finally ordered to rest this conflict by holding that no party who has any interest within the dispute will unilaterally appoint a sole intermediary.
The Perkins judgment is blemished. Prior to examining the Perkins case, it's pertinent to concisely describe the jurisprudence with regards to the unilateral appointment of an intermediary in India. Before the commencement of the Arbitration and Conciliation (Amendment) Act, 2015, the Arbitration and Conciliation Act, 1996 (the Act)[2] had no restrictions relating to the unilateral appointment of arbitrators by one party. after, the Arbitration and Conciliation modification Act, 2015 amended Section 123 and introduced the Fifth and Seventh Schedules within the Act, to ban the appointment of certain persons as arbitrators. However, the Act remained silent on the unilateral authority of 1 party to appoint an arbitrator. In spite of its varied flaws, it might be prudent to assume that the Perkins judgment is here to remain. Therefore, it's necessary that the impact of this judgment is analyzed because it directly hits arbitration clauses envisaged in government contracts, contracts with monetary establishments etc. the foremost immediate impact of this judgment would get on future arbitrations which might arise from contracts containing unilateral appointment clauses. in this respect, it might be sensible that to avoid proceedings, a freelance and impartial arbitrator is appointed with mutual consent of the parties, till necessary amendments are created in such contracts. this will be done in a variety of the way.
[1] ARBITRATION APPLICATION NO.32 OF 2019
[2] https://legislative.gov.in/sites/default/files/A1996-26.pdf
(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 Foundation shall not be responsible for any errors caused due to human error or otherwise.)
- The power of a party to unilaterally appoint a sole arbitrator in India has been a subject matter of a lot of judicial proceedings and discussions for quite a while.
- The unilateral appointment of an arbitrator refers to a situation during which one party to the arbitration agreement is given sole authority to appoint an intermediary
- it's necessary that the impact of this judgment is analyzed because it directly hits arbitration clauses envisaged in government contracts, contracts with monetary establishments etc.
