NO SINGLE PARTY CAN BE ALLOWED TO UNILATERALLY APPOINT A SOLE ARBITRATOR 

The Delhi High Court again repeated that a party's unilateral appointment of an arbitrator is not allowed in law. Such appointment has to be made with the agreement of the parties involved or by the Court. Justice Suresh Kumar Kait dismissed the unilateral arbitral clause set by the National Thermal Power Corporation Limited (NTPC) against the petitioner-company, under which the appointment of the sole arbitrator was made.

FACTS

A dispute arose between the petitioner and the respondent. The petitioner was serving a notice dated December 27, 2021, upon the respondent, seeking the appointment of an arbitrator as per the terms and provisions under clause 56 of the agreement. 

As per clauses 56 and 57 of the agreement, "any disputes shall be referred to the sole arbitration of the General Manager (GM) of National Thermal Power Corporation Limited, and if GM is unable to act, some other person appointed by the Chairman and Managing Director, NTPC Limited, willing to act as such Arbitrator."

At the outset, the Court relied on the Top Court decision in Perkins Eastman Architects DPC & Anr. vs. HSCC (India) Ltd. and its decision, the Court noted that "the arbitrator either has to be appointed with the consensus of both the parties or by the Court." "No single party is allowed to appoint the arbitrator by himself as it would vanquish the purpose of unbiased adjudication of the dispute."

In view of the same, the High Court appointed Justice (Retd.) SK Katriar is the sole arbitrator to adjudicate the dispute.

Author: Papiha Ghoshal