Unilateral Appointment of Arbitrator
Unilateral Appointment of Arbitrator
What Does Unilateral Appointment Mean?
Unilateral appointment of arbitrator occurs when one party appoints an arbitrator without the consent or participation of the other party.
This often happens when the arbitration agreement provides for the appointment of arbitrators by each party individually, and one party fails or refuses to appoint their arbitrator.
The question arises whether such unilateral appointment is valid or whether the other party’s consent or participation is mandatory.
Legal Context under Arbitration and Conciliation Act, 1996
Provisions Regarding Appointment of Arbitrators
Section 10: Appointment of arbitrators by parties.
Section 11: Appointment of arbitrator by the Court if parties fail to agree.
Unilateral Appointment in Multi-Arbitrator Panel
Often, arbitration agreements provide for a tribunal of three arbitrators, with each party appointing one arbitrator, and the two arbitrators appointing the third.
If one party fails to appoint an arbitrator, the other party may try to unilaterally appoint the arbitrator.
Is Unilateral Appointment Valid?
Yes, but with conditions.
If the arbitration agreement empowers each party to appoint one arbitrator, then one party can appoint their arbitrator unilaterally.
However, this arbitrator will be part of the tribunal only if the entire tribunal is properly constituted eventually, either by the other party appointing their arbitrator or by the court stepping in under Section 11.
Case Law on Unilateral Appointment of Arbitrator
1. Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705
Facts: Arbitration agreement provided for appointment of three arbitrators: each party to appoint one, and those two to appoint the third.
One party refused to appoint arbitrator.
The other party appointed an arbitrator unilaterally.
Issue: Whether unilateral appointment of arbitrator by one party is valid.
Held: The appointment of an arbitrator by one party without the other party’s consent is valid as per the arbitration agreement.
Significance: Unilateral appointment is valid if the agreement allows it. The tribunal can be constituted by the court if the other party fails to appoint their arbitrator.
2. Union of India v. Ranjit Singh, AIR 1964 SC 1127
The Supreme Court held that a party is entitled to appoint an arbitrator unilaterally if the arbitration clause or agreement confers such right.
3. State of Madhya Pradesh v. Bhagwati Prasad, AIR 1962 SC 1265
Confirmed that where arbitration agreement provides for separate appointments by parties, each party’s appointment is valid independently.
Practical Position
Unilateral appointment is generally accepted when the arbitration agreement explicitly provides for each party to appoint their arbitrator.
If the other party does not cooperate, the aggrieved party can approach the court for appointment under Section 11.
The arbitrator appointed unilaterally has jurisdiction to act once the tribunal is properly constituted.
Summary Table
| Aspect | Explanation |
|---|---|
| What is it? | One party appoints arbitrator without consent of the other party. |
| Validity | Valid if the arbitration agreement allows separate appointments by parties. |
| If other party doesn’t appoint | The court may appoint arbitrator under Section 11. |
| Jurisdiction | Arbitrator’s jurisdiction is effective once the tribunal is properly constituted. |
| Key Case Law | ONGC v. Saw Pipes Ltd., Union of India v. Ranjit Singh |
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