… The agreement included a compromise clause with the arbitration headquarters in Chennai.4. It seems that in the months following the start of the employment contract,…. 3. The petitioner entered into a working agreement with the company of first resort on 10.3.2006. Under this agreement, the petitioner should be appointed Vice-President (M-A Int… To examine some admitted facts. The facts admitted are: – (1) by a working agreement of 10.03.2006, the petitioner has been appointed vice-president with effect… Arbitration agreements allowing a party to unilaterally appoint an arbitrator currently appear to be authorized by Indian law (Voestalpine Schienen GmbH/Delhi Metro Rail Corporation Ltd. [(2017) 4 SCC 665]). However, in July 2017, a bank of three Supreme Court judges (TRF Ltd. v. Energo Engineering, (2017) 8 CSC 377) („TRF) – „as soon as the arbitrator is no longer eligible by law enforcement, he may appoint no arbitrator other than the arbitrator“ under a clause stipulating that disputes between the parties should be referred „to a single arbitration of the purchaser`s general manager or candidate.“ Since the manager cannot be an arbitrator, since he is not eligible under the requirement in paragraph 12, paragraph 5 of the Arbitration and Conciliation Act, his candidate cannot be admitted either.
The decision has caused some confusion as to its importation, i.e. can the judgment report be interpreted in such a way that a party can no longer be the authority vested with the decision-making power of an arbitrator? The question was asked for interpretation in another case before the High Court of Delhi (D.K. Gupta v. Renu Munjal, (2017) SCC OnLine Del 12385).) The High Court held that the TRF (supra) decision did not contain a universal proposition that a party to the arbitration could no longer be an authority with the power of appointment, but was limited to the question that a person, if not entitled to act as an arbitrator, could not appoint another person in his place. While this has helped to calm the case, it is not possible, for the time being, to say with certainty that the case will not be closed until the Supreme Court rules again. And if the Supreme Court does so – perhaps India could lead the way – to begin to end the unilateral appointment of arbitrators, especially in the case of unjustified bargaining power. Party autonomy is the strongest argument in favour of unilateral arbitration clauses. However, there are calls from several scientists around the world – the United Kingdom, the United States and Singapore – to declare these clauses unenforceable. Judge Sunderesh Menon, in his article – Adjudicator, Advocate, Or Something In Between? To accommodate the role of the party-appointed arbitrator, he said: „There is no doubt that the current system of party designations is historically entrenched. However, it does not follow that the logical necessity that it is only because it has always been one of the arbitrators, that it should always be so […] But as we view the system of unilateral appointments as an integral feature of arbitration, I see it as something born of long-term use, not a characteristic rooted in a sound principle. »