Appointment of Arbitrators
Appointment of Arbitrators
1. What is an Arbitrator?
An arbitrator is a neutral third party appointed by the disputing parties (or an authority) to adjudicate their dispute and provide a binding decision called an arbitral award.
2. Modes of Appointment
The method of appointing arbitrators depends on the arbitration agreement between the parties and the applicable law. Generally, the following modes exist:
a) By Agreement of the Parties
The parties usually specify in their contract how arbitrators are to be appointed.
The agreement may provide for:
Single arbitrator appointed by mutual consent.
Multiple arbitrators (often three), where each party appoints one arbitrator and the two appointed arbitrators select a third arbitrator (usually the chairperson).
The parties are free to decide the procedure and qualifications of arbitrators.
b) Default Appointment Mechanism (Statutory Provisions)
If parties fail to agree on the appointment or the arbitration agreement is silent, the law provides a default mechanism.
Under Section 11 of the Arbitration and Conciliation Act, 1996 (India):
If the parties fail to appoint an arbitrator within 30 days of a request by one party, a party can approach the appointing authority.
The appointing authority is:
The Chief Justice of the High Court or his designate (for domestic arbitration).
The Supreme Court of India (for international commercial arbitration seated in India).
The appointing authority will then appoint the arbitrator(s).
c) Appointment by Arbitration Institution
If the arbitration is institutional (administered by an institution like ICC, LCIA, SIAC, or Indian Arbitration Council), the institution itself may appoint arbitrators as per its rules.
3. Number of Arbitrators
Unless agreed otherwise, there is typically a sole arbitrator.
Parties may agree on three or more arbitrators for complex disputes.
Odd number preferred to avoid deadlocks.
4. Qualifications and Independence
Arbitrators must be impartial, independent, and have the requisite expertise.
They must disclose any circumstances likely to cause justifiable doubts about their impartiality (Section 12 of the Act).
Failure to disclose may lead to challenge or removal.
5. Challenging the Appointment
Under Section 13, a party may challenge an arbitrator if:
There are justifiable doubts about independence or impartiality.
The arbitrator lacks qualifications agreed by the parties.
Challenges must be made within 15 days of becoming aware of the grounds.
6. Removal or Replacement
An arbitrator may be removed for misconduct, incapacity, or failure to act without undue delay (Section 14).
The parties may agree on removal procedures or approach courts.
7. Important Case Law
a) S.B.P. & Co. v. Patel Engineering Ltd., AIR 2005 SC 2427
Supreme Court held that the appointment of arbitrators must strictly follow the agreed procedure.
Courts must intervene only when parties fail to act or an appointing authority is required.
b) M/S N. Radhakrishnan v. Maestro Engineers & Ors., (2010) 1 SCC 72
Appointment of arbitrators must be done without delay.
Courts must facilitate appointment to avoid obstruction.
c) Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49
Emphasized that courts should not interfere unnecessarily in appointment except in clear cases.
8. Summary Table
| Aspect | Details |
|---|---|
| By Agreement | Parties mutually appoint or agree procedure |
| Statutory Appointment | Court or appointing authority if parties fail |
| Institutional Appointment | Arbitration institution appoints arbitrators per rules |
| Number | Usually one or three (odd number preferred) |
| Qualifications | Impartiality, independence, expertise required |
| Challenge | Allowed on grounds of bias or lack of qualification |
| Removal | For misconduct, incapacity, or delay |
In brief:
The appointment of arbitrators is foundational to a fair arbitration process. It starts with party autonomy but has structured safeguards through law and courts to ensure timely and impartial appointments, preventing delays or abuses.
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