{"id":756,"date":"2022-01-31T15:23:43","date_gmt":"2022-01-31T09:53:43","guid":{"rendered":"https:\/\/www.centurylawfirm.in\/blog\/?p=756"},"modified":"2026-10-17T22:43:41","modified_gmt":"2026-10-17T17:13:41","slug":"arbitration-latest-supreme-court-judgement","status":"publish","type":"post","link":"https:\/\/www.centurylawfirm.in\/blog\/arbitration-latest-supreme-court-judgement\/","title":{"rendered":"Arbitration Latest Supreme Court Judgement"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Supreme Court of India in Perkins Eastman Architects DPC &amp; Anr Versus HSCC (India) Ltd., ARBITRATION APPLICATION NO. 32 OF 2019, has held that the person who has interest in the outcome of the decision of the dispute must not have the power to appoint a Sole Arbitrator.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><br>Court looked into a number of judgements and law commission reports regarding &#8216;Neutrality of Arbitrators&#8217;, &#8216;party autonomy&#8217; and &#8216;independence and impartiality of the Arbitrator&#8217;. And held that party autonomy cannot override the requirement of independence and impartiality of the Arbitrator, which is a hallmark of any arbitration proceedings.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This judgement has plugged a big loop hole in the justice system.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Understand in detail by watching this video:<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Unilateral Appointment of Arbitrator against Natural Justice | Latest Supreme Court Judgement\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/K3Dt0f3xDp8?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You can read the complete Supreme Court of India Judgement here:<\/p>\n\n\n\n<div data-wp-interactive=\"core\/file\" class=\"wp-block-file\"><object data-wp-bind--hidden=\"!state.hasPdfPreview\" hidden class=\"wp-block-file__embed\" data=\"https:\/\/www.centurylawfirm.in\/blog\/wp-content\/uploads\/2022\/01\/Unilateral-appointment-of-Arbitrator.pdf\" type=\"application\/pdf\" style=\"width:100%;height:600px\" aria-label=\"Embed of Embed of Unilateral-appointment-of-Arbitrator..\"><\/object><a id=\"wp-block-file--media-7d9d166a-4699-4c54-b861-1c7e01e88d2d\" href=\"https:\/\/www.centurylawfirm.in\/blog\/wp-content\/uploads\/2022\/01\/Unilateral-appointment-of-Arbitrator.pdf\">Unilateral-appointment-of-Arbitrator<\/a><a href=\"https:\/\/www.centurylawfirm.in\/blog\/wp-content\/uploads\/2022\/01\/Unilateral-appointment-of-Arbitrator.pdf\" class=\"wp-block-file__button\" download aria-describedby=\"wp-block-file--media-7d9d166a-4699-4c54-b861-1c7e01e88d2d\">Download<\/a><\/div>\n\n\n\n<span class=\"clf-expanded\" hidden><\/span>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Reviewed and updated by Century Law Firm, Delhi \u2013 October 2026. Statutory references are to the Acts as in force on that date.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Unilateral appointment of arbitrators: from Perkins Eastman to the 2024 Constitution Bench<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Perkins Eastman Architects DPC v. HSCC (India) Ltd.<\/em> (2019) built on <em>TRF Ltd. v. Energo Engineering Projects Ltd.<\/em> (2017), where the Supreme Court had held that a person who is himself ineligible to act as arbitrator under Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996 \u2013 typically the managing director of a party \u2013 cannot nominate another person as arbitrator either. <em>Perkins<\/em> extended the logic: even where the clause does not name the managing director as arbitrator but gives him the sole power to appoint one, the appointment is invalid, because a party interested in the outcome cannot have exclusive control over the composition of the tribunal. The Court then appointed an independent arbitrator under Section 11(6).<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Section 12(5) and the Seventh Schedule<\/strong> (inserted by the 2015 amendment) make a person whose relationship with the parties or the dispute falls within the Schedule \u2013 employee, consultant, adviser or other past or present business relationship \u2013 <em>de jure<\/em> ineligible, &#8220;notwithstanding any prior agreement to the contrary&#8221;.<\/li>\n\n\n<li><strong>Waiver only after the dispute.<\/strong> The proviso to Section 12(5) permits waiver only by an express agreement in writing made after the dispute has arisen; participation in the proceedings is not waiver (<em>Bharat Broadband Network Ltd. v. United Telecoms Ltd.<\/em>, 2019).<\/li>\n\n\n<li><strong>Panels maintained by one party.<\/strong> In <em>Voestalpine Schienen GmbH v. DMRC<\/em> (2017) the Court allowed appointment from a broad-based panel, but in <em>Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV)<\/em> (Constitution Bench, 8 November 2024) it held, by majority, that a clause allowing a public-sector party to appoint the arbitrator unilaterally, or to force the other party to choose from a panel it curates, violates the principle of equal treatment in Section 18 and the independence requirements of Section 12(5), and is invalid \u2013 prospectively, for appointments made after that date.<\/li>\n\n\n<li><strong>Practical effect.<\/strong> Government <a href=\"https:\/\/www.centurylawfirm.in\/blog\/the-indian-contract-act-1872-types-of-contracts-validity-and-drafting\/\">contracts<\/a>, PSU tenders and many commercial agreements with &#8220;the Chairman shall appoint the sole arbitrator&#8221; clauses are now unenforceable on that point; the parties must agree on an arbitrator or approach the High Court (or the Supreme Court for international arbitrations) under Section 11 for appointment, and courts routinely appoint retired judges or institutional arbitrators instead.<\/li>\n\n\n<li><strong>Challenging an existing appointment.<\/strong> An award by an ineligible arbitrator is open to challenge under Section 34 for lack of jurisdiction; the challenge should be raised before the tribunal under Section 13 at the earliest, and the ineligibility is not cured by the other party&#8217;s silence.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Related reading: <a href=\"https:\/\/www.centurylawfirm.in\/blog\/arbitration\/\">Arbitration and Conciliation Act, 1996 explained<\/a>, <a href=\"https:\/\/www.centurylawfirm.in\/blog\/arbitration-and-judicial-intervention-limits-necessity-complete-legal-guide-2025\/\">arbitration and judicial intervention<\/a>, <a href=\"https:\/\/www.centurylawfirm.in\/blog\/commercial-courts-act-2015-ultimate-guide-for-businesses-legal-professionals\/\">Commercial Courts Act, 2015<\/a> and <a href=\"https:\/\/www.centurylawfirm.in\/blog\/resolving-contract-disputes-practical-tips-for-small-businesses\/\">resolving contract disputes<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently asked questions<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-q-1\"><strong class=\"schema-faq-question\">Can one party to a contract appoint the sole arbitrator?<\/strong> <p class=\"schema-faq-answer\">No. Following TRF (2017), Perkins Eastman (2019) and the Constitution Bench decision in CORE v. ECI-SPIC-SMO-MCML (2024), a clause giving one party \u2013 or its officer \u2013 the sole power to appoint the arbitrator is invalid; the arbitrator must be appointed by agreement, by a neutral institution, or by the court under Section 11.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-q-2\"><strong class=\"schema-faq-question\">What happens to an arbitration clause that names the company&#8217;s managing director as arbitrator?<\/strong> <p class=\"schema-faq-answer\">The managing director is ineligible under Section 12(5) read with the Seventh Schedule, and under TRF he cannot nominate anyone else either. The rest of the clause survives, and either party may apply to the court for appointment of an independent arbitrator.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-q-3\"><strong class=\"schema-faq-question\">Can the parties agree to let one side appoint the arbitrator anyway?<\/strong> <p class=\"schema-faq-answer\">Only by an express written agreement made after the dispute has arisen (proviso to Section 12(5)); a clause in the original contract does not count, and merely participating in the arbitration is not a waiver.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"clf-related\" style=\"margin:28px 0 8px;padding:16px 20px;border:1px solid #e3e3e3;border-radius:6px;background:#fafafa\">\n<p style=\"margin:0 0 8px;font-weight:700\">Related reading<\/p>\n<ul style=\"margin:0;padding-left:20px\">\n<li><a href=\"https:\/\/www.centurylawfirm.in\/blog\/arbitration-and-judicial-intervention-limits-necessity-complete-legal-guide-2025\/\">Arbitration and Judicial Intervention: Limits &amp; Necessity &#8211; Complete Legal Guide 2025<\/a><\/li>\n<li><a href=\"https:\/\/www.centurylawfirm.in\/blog\/arbitration\/\">Arbitration and Conciliation Act, 1996 | Best Lawyer for Arbitration Case<\/a><\/li>\n<li><a href=\"https:\/\/www.centurylawfirm.in\/blog\/anticipatory-bail\/\">Anticipatory Bail<\/a><\/li>\n<\/ul>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India in Perkins Eastman Architects DPC &amp; Anr Versus HSCC (India) Ltd., ARBITRATION APPLICATION NO. 32 OF 2019, has held that the person who has interest in the outcome of the decision of the dispute must not have the power to appoint a Sole Arbitrator. Court looked into a number of judgements [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_monsterinsights_skip_tracking":false,"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[3],"tags":[302,26,1549],"class_list":["post-756","post","type-post","status-publish","format-standard","hentry","category-latest-news","tag-advocate-for-138-case","tag-cheque-bounce-in-delhi","tag-lawyers-delhi"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - 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ECI-SPIC-SMO-MCML (2024), a clause giving one party \u2013 or its officer \u2013 the sole power to appoint the arbitrator is invalid; the arbitrator must be appointed by agreement, by a neutral institution, or by the court under Section 11.","inLanguage":"en"},"inLanguage":"en"},{"@type":"Question","@id":"https:\/\/www.centurylawfirm.in\/blog\/arbitration-latest-supreme-court-judgement\/#faq-q-2","position":2,"url":"https:\/\/www.centurylawfirm.in\/blog\/arbitration-latest-supreme-court-judgement\/#faq-q-2","name":"What happens to an arbitration clause that names the company's managing director as arbitrator?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"The managing director is ineligible under Section 12(5) read with the Seventh Schedule, and under TRF he cannot nominate anyone else either. The rest of the clause survives, and either party may apply to the court for appointment of an independent arbitrator.","inLanguage":"en"},"inLanguage":"en"},{"@type":"Question","@id":"https:\/\/www.centurylawfirm.in\/blog\/arbitration-latest-supreme-court-judgement\/#faq-q-3","position":3,"url":"https:\/\/www.centurylawfirm.in\/blog\/arbitration-latest-supreme-court-judgement\/#faq-q-3","name":"Can the parties agree to let one side appoint the arbitrator anyway?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Only by an express written agreement made after the dispute has arisen (proviso to Section 12(5)); a clause in the original contract does not count, and merely participating in the arbitration is not a waiver.","inLanguage":"en"},"inLanguage":"en"}]}},"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false},"uagb_author_info":{"display_name":"admin","author_link":"https:\/\/www.centurylawfirm.in\/blog\/author\/admin\/"},"uagb_comment_info":0,"uagb_excerpt":"Supreme Court of India in Perkins Eastman Architects DPC &amp; Anr Versus HSCC (India) Ltd., ARBITRATION APPLICATION NO. 32 OF 2019, has held that the person who has interest in the outcome of the decision of the dispute must not have the power to appoint a Sole Arbitrator. 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