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ARTICLE · 28 JANUARY 2020

End Of The Road For Arbitration Clauses Providing For Unilateral Appointment Of Sole Arbitrator

It is not uncommon for parties to incorporate arbitration clauses that give them the unilateral power to appoint a sole arbitrator.

IndiaLitigation, Mediation & Arbitration

1. INTRODUCTION

It is not uncommon for parties to incorporate arbitration clauses that give them the unilateral power to appoint a sole arbitrator. The parties (particularly companies) do that in order to have a greater role in constituting an arbitral tribunal as also to expeditiously constitute an arbitral tribunal without having to approach the courts for constituting the arbitral tribunal, which can be a time-consuming process. 

The recent judgment of the Supreme Court in Perkins Eastman Architects DPC & Anr v. HSCC (India) Ltd ("Perkins Eastman")1 has created quite a stir. On a rigid reading of Perkins Eastman, arbitration clauses that give the right to one party to appoint a sole arbitrator, would no longer be valid. A more recent judgment of the Bombay High Court in Lite Bite Foods Pvt Ltd v. Airports Authority of India2 (the "Lite case") has followed Perkins Eastman. However, in certain other instances, the courts have respected party autonomy in

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