Constitution bench reserves judgment in arbitration case
Hindustan TimesNew Delhi A Constitution bench of the Supreme Court on Friday reserved its judgment on the complex legal question of whether one party in an arbitration can unilaterally appoint a panel of arbitrators and require the other party to select arbitrators from that panel. During the proceedings, the bench highlighted the critical importance of maintaining integrity in arbitration, particularly in cases involving government entities and PSUs. During the proceedings on Thursday, the bench highlighted the critical importance of maintaining integrity in arbitration, particularly in cases involving government entities and PSUs. While government entities like the Railways have argued that the Arbitration and Conciliation Act permits unilateral appointments, the court has expressed strong reservations against blending public law principles with private contractual agreements, which could blur legal boundaries and draw global criticism of the Supreme Court of India. The bench also expressed concern over the practice of financial companies, particularly non-banking financial companies, unilaterally appointing sole arbitrators in disputes involving vulnerable individuals, such as taxi and truck drivers -- a practice the court views as distorting the purpose of arbitration.