Unilateral Arbitrator Appointment Clauses in Public-Private Contracts are Unconstitutional

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Jan 23, 2025

Unilateral Arbitrator Appointment Clauses in Public-Private Contracts are Unconstitutional

In Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV) A Joint Venture Company,^[1] the SC, inter alia, held that: (i) the principle of equal treatment of parties applies at all stages of arbitration proceedings, including the stage of appointment of arbitrators; (ii) a clause that allows one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts as to the independence and impartiality of the arbitrator; and (iii) unilateral appointment clauses in public-private contracts are violative of Article 14 of the Constitution.

[1] Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV) A Joint Venture Co., 2024 SCC OnLine SC 3219.

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