Supreme Court Judgement On Unilateral Arbitrator Appointments: Implications For Financial Institutions And The Way Forward

The Supreme Court of India, in its recent judgment on Central Organisation for Railway Electrification v. M/s ECI SPIC SMO MCML (JV) (November 8, 2024), addressed the legality of arbitration clauses allowing unilateral appointments of arbitrators by public and private sector entities. The Court reinforced the importance of independence and impartiality in arbitration, striking down clauses that permitted one party to have exclusive control over arbitrator appointments, which it considered a violation of equality principles under Article 14 of the Constitution.

Key Findings and Majority Opinion

The judgment, delivered by Chief Justice D.Y. Chandrachud, Justice Pardiwala, and Justice Manoj Mishra, centred on promoting fair play in the arbitration appointment process. Key conclusions of the majority opinion include: