Supreme Court Interprets Legislative Intent To Appoint ‘Neutral', ‘Impartial' And ‘Independent' Arbitrators

On 10 February 2017, the Hon'ble Supreme Court of India, in the matter Voestalpine Schienen GmBH (VSG) v. Delhi Metro Rail Corporation Limited (DMRC) (ARBIT. CASE (C) No. 50 of 2016) decided on the issue as to whether the arbitration clause providing for appointment of arbitrators from a panel of arbitrators is contrary to the parameters of impartiality and eligibility codified by the Arbitration and Conciliation Amendment Act, 2015 (the Act).

Background

India has been continuing to face criticism in the international arbitration community for existence of one-sided arbitration clauses with Government entities, more particularly when the control over the appointment of the arbitral tribunal is with the Government entity due to the practice of appointment out of a pool of potential arbitrators of retired or serving employees/ consultants/ advisors to the Government.