HC: No party can be permitted to unilaterally appoint an Arbitrator, as the same would defeat the purpose of unbiased adjudication [Read Judgment]

On 11^th August, a bench of Delhi High Court consisting of Justice Suresh Kumar Kait while disposing of a petition for the appointment of an arbitrator observed that  unilaterally appointing a sole arbitrator by one party in case of a dispute is bad in law. The bench further held that no party can be permitted to unilaterally appoint an Arbitrator, as the same would defeat the purpose of unbiased adjudication of dispute between the parties.

Facts of the case:

The petition has been been filed under the provisions of Section 11(6) of Arbitration and Conciliation Act, 1996. Pertinently, the dispute inter se parties pertain to different work orders issued by the respondent to petitioner with regard to different projects. According to petitioner, these work orders contain an arbitration clause in the event of dispute between the parties.

Contention of the petitioner:

The petitioner contented that it invoked the arbitration clause and proposed the name of an Arbitrator, however, respondent went ahead and unilaterally appointed sole Arbitrator, which is bad in law. Hence, the petitioner approached the Court seeking appointment of an Arbitrator.

Observation and judgement of the court:

The hon’ble  bench of the court observed the following:

1. Dispute between the parties and invocation of arbitration by the petitioner vide notice dated 09.02.2021, is not disputed by learned counsel for the respondent.
2. No party can be permitted to unilaterally appoint an Arbitrator, as the same would defeat the purpose of unbiased adjudication of dispute between the parties. It has so been said in view of pertinent observations of the Hon’ble Supreme Court in Perkins Eastman Architects DPC & Anr. vs. HSCC (India) Ltd. 2019 SCC Online SC 1517.

In the view of the above, the petition was allowed and Justice Pratibha Rani was appointed as the sole Arbitrator to adjudicate the dispute between the parties. The court also mentioned that the arbitration shall be conducted under the Delhi International Arbitration Centre (DIAC).

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