Indian Supreme Court Orders Arbitrator Backlog To Be Cleared

The Indian Supreme Court has directed the High Courts to decide within six months applications to appoint arbitrators that have been pending for over a year. While the judgment will help reduce a large backlog, it highlights the importance of designating an arbitral institution to oversee the case and appoint the arbitrators to avoid the risk of delay in India related commercial contracts.

M/s Shree Vishnu Constructions v The Engineer in Chief, Military Engineering Service & Ors., SLP (C) No. 5306/2022.

Background

Sections 11(5) and 11(6) of the Indian Arbitration and Conciliation Act 1996 provide that the court may appoint an arbitrator where (i) the parties cannot agree on a sole arbitrator; or (ii) where there is a failure in an agreed appointment procedure. Both provisions are subject to any other agreement specifying how deadlocks will be resolved. For example, the parties can designate an arbitral institution to appoint the tribunal if the parties fail