Mar 31, 2019

SC Clarifies Regarding Appointment of an ‘Independent Arbitrator’

SC, in its decision dated March 29, 2019 in Union of India v. Parmar Construction Company[1], has held that with respect to appointment of an independent arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (‘A&C Act’), there should be emphasis to act on the agreed terms and to first resort to the procedure in the arbitration agreement, which should be given effect to as closely as possible. Therefore, an independent arbitrator should be appointed by the Court under Section 11(6) of the A&C Act after the remedies provided for in the agreement had been exhausted. The SC also held that the Arbitration and Conciliation (Amendment Act), 2015, which came into force on October 23, 2015, would not apply to arbitral proceedings which had commenced (in accordance with Section 21 of the A&C Act) before the coming into force of such amendment, unless the parties had otherwise agreed.

[1] Union of India v. Parmar Construction Company, Civil Appeal No(s). 3303 of 2019 (arising out of SLP(C) No(s). 6312 of 2018).

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