SC judgment: Govt cannot unilaterally appoint arbitrators

THE JUDGMENT, AUTHORED BY THE CJI, REFLECTED THE COURT'S RESOLVE TO MAKE THE ARBITRATION PROCESS MORE IMPARTIAL

- Utkarsh Anand

The Supreme Court on Friday ruled that government entities and public sector units (PSUs) cannot unilaterally appoint arbitrators in public-private arbitration agreements because such clauses violate the principle of equality under Article 14 of the Constitution.

In a decision seen as a move towards ensuring greater impartiality and fairness in arbitration proceedings involving government contracts, the top court ensured equality in public-private contract disputes and upholds a core tenet of the Arbitration Act that arbitration should be conducted by an independent, impartial body.

The bench, led by Chief Justice of India (CJI) Dhananjaya Y Chandrachud and including justices Hrishikesh Roy, PS Narasimha, Pankaj Mithal and Manoj Misra, grappled with pressing questions about unilateral arbitrator appointments by PSUs, as raised in a bundle of matters that sought an authoritative decision on contours defining the independence and impartiality of arbitral tribunals under the Arbitration and Conciliation Act, 1996.