Lawstreet Journal

Person Interested In the Outcome Of Dispute Does Not Have Power To Appoint Sole Arbitrator: SC [Read Judgment]

Lawstreet Journal 27 Nov 2019 7:41pm

Image courtesy: Lawstreet Journal Judiciary Person Interested In the Outcome Of Dispute Does Not Have Power To Appoint Sole Arbitrator: SC [Read Judgment]

The Supreme Court on November 26, 2019, in the case of Perkins Eastman Architects DPC v. HSCC (India) Ltd., has held that a person who has an interest in the outcome or decision of the dispute must not have the power to appoint a sole arbitrator.

A Division Bench comprising of Justice Uday Umesh Lalit and Justice Indu Malhotra was hearing an application filed to seek appointment of a sole Arbitrator in accordance with clause 24 of the Contract executed between the parties.

Clause 24 of the Contract empowered the Chairman and Managing Director of the company to make the appointment of a sole arbitrator and said Clause also stipulates that no person other than a person appointed by such Chairman and Managing Director of the respondent would act as an arbitrator.

The court placed reliance on a judgment in TRF Limited v. Energo Engineering Projects Limited, wherein the court had held that the Managing Director became ineligible by operation of law to act as an arbitrator, he could not nominate another person to act as an arbitrator and that once the identity of the Managing Director as the sole arbitrator was lost, the power to nominate someone else as an arbitrator was also obliterated.

Applying the similar invalidity in the present case, the court observed: “the Managing Director was found incompetent, it was because of the interest that he would be said to be having in the outcome or result of the dispute. The element of invalidity would thus be directly relatable to and arise from… Continue Reading...

Tagged: Supreme Court of India   Arbitrator  
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