PSUs in a bind on arbitration powers

The Supreme Court's move to slash the powers of state-run companies to unilaterally appoint arbitrators on Chief Justice D. Y. Chandrachud's last day in office leaves the country's public sector units (PSUs) in a cloud of uncertainty.

- Manas Pimpalkhare & Krishna Yadav

The ruling by a constitution bench, delivered on Friday, follows a finance ministry push to cut PSU arbitration costs.

It puts state-run firms in a bind—if they arbitrate disputes, they lose their advantage of appointing arbitrators; if they don't, India risks losing ground in its mission to become a global arbitration hub.

The ruling was delivered by a five-judge constitutional bench comprising Chandrachud and justices Manoj Mishra, Hrishikesh Roy, Pankaj Mithal and P. S. Narasimha.

Tushar Kumar, an advocate who specializes in arbitration, said, "Together, these measures refine India's business milieu, establishing a framework where contractual commitments are honoured with a robust sense of fairness and dependability."