Clause Exclusively Empowering Chief Project Manager To Appoint Arbitrator From A Panel Maintained By It, Illegal: Delhi High Court
2 years, 1 month ago

Clause Exclusively Empowering Chief Project Manager To Appoint Arbitrator From A Panel Maintained By It, Illegal: Delhi High Court

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The Delhi High Court has reiterated that when a person has itself become ineligible by operation of law to act as an arbitrator, it cannot nominate another person to act as arbitrator. The bench of Justice Yashwant Varma was dealing with an arbitration clause which exclusively empowered the Chief Project Manager to appoint the arbitrator from a panel which was itself maintained by it. The Court observed that the arbitration clause did not bestow a right on any of the parties to the dispute to independently choose their nominee from the panel maintained by the Chief Project Manager. While holding that the Chief Project Manager could be perceived to be an appointing authority who may have an interest in the outcome of the arbitral proceedings, the Court referred to the decision of the Apex Court in Perkins Eastman Architects DPC vs. HSCC Ltd, where it was held that since the Managing Director itself became ineligible by operation of law to act as an arbitrator, he could not nominate another person to act as arbitrator. It neither permits a party to independently choose or nominate an arbitrator, it also vests the power of constitution exclusively in the hands of the Chief Project Manager,” the Court said.

History of this topic

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