Arbitration Agreement For Appointment Of Arbitrator
The unbalanced and unilateral option clauses contained in the arbitration agreement as a dispute settlement clause give a party a unilateral right to appoint a single arbitrator or to refer a particular disagreement to an institution. The existence of such clauses in an agreement can be of great use to the party who has the right to appoint a single arbitrator. If an argument arises, such a party would be able to choose the sole arbitrator of its choice or choose the most favourable forum in a given circumstance. In some legal systems, the courts have shown a negative attitude towards such clauses and have even invalidated them on the grounds of “morality,” “good faith,” “fairness” and “unacceptable.” In summary, recent decisions by the highest civil courts in Russia and France have gone in the opposite direction of the cancellation of unilateral option clauses, while India, as a hybrid legal system, decides both. In addition, recent court decisions are rather favourable to the civil system. However, party autonomy is respected when parties have been given a greater choice of arbitrators with neutral credibility, appointing arbitrators by independent institutions and not by unilateral members of the board of directors or by representatives of companies, and by entrusting the management of arbitration to neutral institutions, rather than law firms or home counsel. The way forward for India`s arbitration is by maintaining the right to fair and equitable equality, according to Section 12 (5) read with Calendar VII of the Law, and in harmony with the Supreme Court and Supreme Judgments. With respect to the Indian Arbitration and Conciliation Act of 1996 (“the Act”), the Amendment Act of 2015 introduced several safeguards to address this problem. Prior to the 2015 amendment, even one (s) advisor (s) of one of the parties, particularly government authorities and businesses, could act as an arbitrator, and such an appointment was found to be valid, unless circumstances that revealed legitimate doubts about its impartiality were found. However, in order to ensure the legitimacy of the process, the 2015 amendment set out several conditions that do not call into question an appointment arbitrator, 1 including a collaborator/adviser/adviser to one of the parties. Thus, the law expressly excluded staff members from an arbitration organization in their own litigation in order to ensure compliance with the principles of neutrality. The recent Supreme Court decision of Perkins Eastman Architects DPC – Anr v.
HSCC (India) Ltd (“Perkins Eastman”) 1 caused a sensation. With a rigid reading by Perkins Eastman, arbitration clauses giving a party the right to appoint a single arbitrator would no longer be valid. A recent judgment of the Bombay High Court in Lite Foods Pvt Ltd v. Airports Authority of India2 (the Lite case) was followed by Perkins Eastman. However, in some other cases, the courts have respected the autonomy of the parties in defining the procedure for appointing an arbitrator. To fully understand the controversy, it would be wise to look at the legislation on this aspect. This redefined legal situation, which governs the unilateral appointment of a single arbitrator in India, has significant implications. Speaking of follow-up constraints, unless institutional arbitration enters the Indian arbitration environment, the end of a unilateral appointment is likely to increase the use of the courts for the appointment of arbitrators, because as soon as a dispute arises, the parties often lose confidence and fail to agree on a single arbitrator.