Retired Employees As Arbitrators? Supreme Court To Decide

Recently on 30th August 2024, a 5-judge Constitution Bench of the Hon'ble Supreme Court (SC) in Central Organisation for Railway Electrification v. M/s. ECI SPIC SMO MCML (JV) (CORE 2)¹ reserved its judgment on the issue whether a person who is ineligible to be an arbitrator under the Arbitration and Conciliation Act, 1996 (Act), can otherwise appoint an arbitrator.

The reference

On 17 December 2019, the SC in Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV) (CORE 1)² was hearing a challenge to the Allahabad High Court's order appointing a sole arbitrator who was not part of the panel agreed between the parties in the underlying arbitration agreement. The terms of the contract between the parties stipulated that any dispute would be decided by a panel of 3 arbitrators, who must be 3 retired railway officers not below the rank of a senior railway officer. The HC held that the Court's power to appoint arbitrators under Section 11 of