Monday, 24 January 2022

Arbitrators and their appointment

     ARBITRATORS AND THEIR APPOINTMENT 


Arbitrators are the main person in the Arbitration proceeding, on whose hand the decision making power is in. He has his own powers as such of the Judges. But unlike judges, the parties of arbitration can appoint their own arbitrators or arbitral institutions. Section 10 and 11 of the Arbitration and Conciliation Act, 1996 deals with the Number of arbitrators that should be appointed and the procedure for the appointment of Arbitrators. The parties have no limit in the fixation of the arbitrators, but it cannot be in even numbers. If the parties are fail to fix the number then the Arbitral Tribunal will appoint one Arbitrator which is mandatory and basic. If the parties decided to appoint three arbitrators then each party will appoint one arbitrator and they (the 2 arbitrators) will appoint the third arbitrator who is in common. Under the Old Arbitration Act 1940, the third Arbitrator so appointed was named as ‘Umpire’ but under the present Act, the third Arbitrator is called the ‘Presiding Arbitrator’. The third arbitrators should be appointed within 30 days by the 2 arbitrators. 


Appointment of Arbitrators: 

Section 11 of this Act deals with the procedure to appoint Arbitrators. The Arbitrator can belong to any nation, but they must be with the consent of both the parties. When it comes to the International disputes the Arbitrator must not belong to the nationality of both the parties. For Example, If there is any problem between India and China, then the arbitrator cannot belong to both the nation and he should be the citizen of some other country. The parties are free to agree on a procedure for appointing the Arbitrator or Arbitrators. In arbitration with a sole Arbitrator, if the parties fail to agree on the Arbitrator within 30 days from receipt of a request of a party, by the Chief Justice of any person or institution designated by him. If a party fail to act as required or the Arbitrators fail to do their duties or if the institution does not perform the functions then under such circumstances, the party may request the Chief Justice or any person or institution designated by him to take the necessary measure. Any decision by the Chief justice is the final one. The Chief Justice in appointing an Arbitrator must have due regard to any qualification required of the Arbitrator by the agreement of the parties and other considerations as are likely to secure the appointment of an Independent and impartial Arbitrator. 

CASE LAWS: 

MTC ltd., Vs. Starlite Industries India Ltd., AIR  1997

It was held that the Chief Justice will make the appointment only on receipt of request for this purpose from a party and not otherwise. 


Northern Sanitation Vs. Hotel Corporation of India, AIR 1990

It was provided by the arbitration clause that each party will have a right to appoint Arbitrator but unfortunately the Arbitrators appointed by them were held guilty of misconduct and hence it was held that they exhausted their right to appoint Arbitrators and the Court could appoint Arbitrator. 


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