In a recent judgment, in the case of J. S. R. Constructions v/s National Highways Authority of India and Anr; ARB.P. 753/2023, the Delhi High Court addressed the issue of unilateral appointment of a presiding arbitrator in the context of the failure of nominee arbitrators to reach a consensus.
The Petitioner, J. S. R. Constructions, sought the appointment of a presiding arbitrator to adjudicate upon their claims based on a contract agreement dated April 1, 2005. The Petitioner specifically requested the court to appoint a presiding arbitrator to preside over the arbitral tribunal. Additionally, the Petitioner also sought to declare the appointment of the presiding arbitrator by the Respondent as null and void and to quash and set aside the same.
The judgment highlighted the importance of the procedure for the appointment of arbitrators and the need for consensus among the parties involved. It emphasized that a party cannot unilaterally appoint the presiding arbitrator upon the failure of the nominee arbitrators to reach a consensus. The Hon’ble Court’s decision underscored the significance of upholding certain minimum standards of independence and impartiality in the arbitral process, especially in cases where one party has the right to appoint a sole arbitrator.
The Hon’ble Court also referenced previous rulings and observations by the Supreme Court, emphasizing that the authority to nominate arbitrators cannot be questioned when there is a clause requiring the parties to nominate their respective arbitrators. However, it was noted that the procedural compliance and the eligibility of the arbitrator must align with the norms provided under the Arbitration and Conciliation Act, 1996.
Furthermore, the judgment highlighted the distinction between independence and impartiality of arbitrators, emphasizing that an arbitrator may be independent but lack impartiality, or vice versa. It stressed the need to send positive signals to the international business community by creating a healthy arbitration environment and conducive arbitration culture.
Author of this article:
Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate
Connect with Mr. Bhatt on Linkedin: https://www.linkedin.com/in/adit-ravishbhatt/
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