Introduction
The appointment of arbitrators is a crucial procedural step in arbitration. It ensures a neutral and fair adjudication of disputes between parties. In India, the appointment process is governed by Section 11 of the Arbitration and Conciliation Act, 1996, which outlines the procedure, qualifications, and powers involved in appointing arbitrators.
The Act supports party autonomy by allowing the parties to agree upon their own procedure. However, in the absence of agreement or failure of the agreed procedure, courts may intervene to appoint arbitrators.
Statutory Framework
Section 11 – Appointment of Arbitrators
- Parties are free to determine the procedure for appointing an arbitrator or arbitrators.
- If the parties fail to agree, or if the procedure fails:
- In arbitration with three arbitrators:
- Each party appoints one arbitrator.
- The two arbitrators then appoint a third arbitrator (the presiding arbitrator).
- In arbitration with a sole arbitrator:
- If the parties do not agree, a party can apply to the court for appointment.
- In arbitration with three arbitrators:
Other Relevant Provisions
- Section 12: Grounds for challenge (bias, conflict of interest).
- Schedule V and VII: List of circumstances that give rise to justifiable doubts about independence or impartiality.
- 2015 Amendment: Judicial power delegated to the High Courts and Supreme Court for domestic and international arbitrations, respectively.
Number of Arbitrators – Section 10
- Parties can decide the number (must be an odd number).
- In absence of agreement, the tribunal shall consist of a sole arbitrator.
Party Autonomy and Court Assistance
- Party Autonomy: Primacy is given to the agreement between the parties regarding the number, qualifications, and appointment procedure.
- Judicial Intervention: When parties fail or dispute arises, parties may approach:
- High Court (domestic arbitration) or
- Supreme Court (international commercial arbitration)
Qualifications and Independence
Section 12(1):
An arbitrator must disclose:
- Any past or present relationship with parties or counsel.
- Any interest in the subject matter.
Section 12(5):
A person whose relationship falls under Schedule VII shall be ineligible to be appointed as arbitrator.
Schedules V and VII:
- Drawn from IBA Guidelines on Conflicts of Interest.
- Schedule V: Grounds that may give rise to doubts.
- Schedule VII: Grounds rendering a person ineligible.
Important Judicial Decisions
- TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377
- A person who is ineligible to be an arbitrator cannot nominate another arbitrator.
- Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2019) 9 SCC 449
- A party interested in the outcome of a dispute cannot unilaterally appoint a sole arbitrator.
- Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV), (2020) 14 SCC 712
- Reaffirmed party autonomy but clarified that fairness and neutrality are critical.
Recent Developments
- Arbitration and Conciliation (Amendment) Act, 2019: Introduced the Arbitration Council of India (yet to be operationalized), which may eventually play a role in institutional arbitration and maintain panels of qualified arbitrators.
- Increased emphasis on institutional arbitration where appointments are handled by designated institutions (e.g., MCIA, DIAC).
Mind Map (Text Format)
pgsqlCopyEdit Appointment of Arbitrators
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Section 11 Number of Judicial Role Challenges Schedules
(Procedure) Arbitrators in Appointment to Appointment V & VII
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Party Autonomy Odd number High Court / Section 12(5) Ineligibility
Failure = Court Sec 10 ACA Supreme Court Bias / Disclosure
Intervention
Situation-Based Questions and Answers
Q1. Party A and Party B agree to appoint a sole arbitrator. Party A nominates an employee of their company as arbitrator. Is this valid?
Answer: No. As per Perkins Eastman case, a party interested in the dispute cannot unilaterally appoint a sole arbitrator.
Q2. Two arbitrators fail to agree on the third arbitrator. What is the remedy?
Answer: An application can be filed under Section 11(4) to the relevant High Court for appointment of the presiding arbitrator.
Q3. Can a person listed in Schedule VII be appointed if both parties agree after the dispute arises?
Answer: No. Under Section 12(5), even mutual agreement is not valid post-dispute if the person is ineligible under Schedule VII.
Frequently Asked Questions (FAQs)
Q1. What happens if parties fail to appoint an arbitrator within the stipulated time?
The aggrieved party can approach the High Court or Supreme Court under Section 11 for court-assisted appointment.
Q2. Is there a fixed time limit for appointment of arbitrators?
No statutory time limit, but delays can frustrate the process. Courts usually expect a response within 30 days.
Q3. Can a retired judge be appointed as an arbitrator?
Yes. Parties are free to appoint anyone, including retired judges, unless disqualified under Schedule VII.
Q4. Can courts reject an application under Section 11?
Yes, if there is no valid arbitration agreement or if the claim is barred by limitation.
Q5. Are institutional arbitrations different in appointment?
Yes. Institutions (like ICA, MCIA, SIAC) maintain their own panels and rules for appointment.
Q6. Can an arbitrator appoint a substitute arbitrator?
No. The power lies with the parties or court, not with the arbitrator themselves.
References
- The Arbitration and Conciliation Act, 1996 – https://legislative.gov.in
- Law Commission of India Report No. 246
- Supreme Court decisions on appointment of arbitrators – https://indiankanoon.org
- Indian Bar Association Guidance – https://www.ibanet.org (for context on impartiality standards)