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Chief Justice Can Appoint Independent Arbitrator Though An Arbitrator Is Named In Agreement

The Supreme Court, in Union of India vs. Besco Ltd, has held that even if an arbitrator is specified in the agreement for arbitration, the chief justice or the designated judge is free to appoint an independent arbitrator, having due regard to the qualification, if circumstances so warrant.

A bench comprising Justice Kurian Joseph and Justice R Banumathi upheld a high court judgment which had nominated an independent arbitrator, on the ground that petitioner (before the high court) had lost the mandate to appoint an arbitrator since it failed to appoint the arbitrator within the permitted time.

Referring to some decisions in this aspect, the court observed: “Though an arbitrator is specified in the agreement for arbitration, if circumstances so warrant, the Chief Justice or the designated Judge is free to appoint an independent arbitrator, having due regard to the qualification, if any, and other aspects as required under Section 11(8) of the Act.”

The court also, in the facts of the case, observed that, there is no stipulation for the appointment of a railway officer and it can be any person. The designated Judge of the High Court has only exercised his powers in terms of the agreement by nominating an independent arbitrator, the court observed.
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