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The Procedure For Appointment Of Arbitrator By SC Changes
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The Procedure For Appointment Of Arbitrator By SC Changes

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Before the much talked about Ordinance to amend the Arbitration and Conciliation Act could complete a month, questions arose regarding the meaning, scope and applicability of the Ordinance.

 

The Ordinance was promulgated on 23rd October, 2015. Subsequently, Reliance Industries filed an application with the Supreme Court of India for the appointment of the third arbitrator in the arbitration pending between RIL and the Government of India over the KG Basin.

 

The Ordinance has amended the procedure for the appointment of the arbitrator by the Court and the provision now reads:

 

Appointment of arbitrators: “if …. the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High Court, or any person or institution designated by such Court.”

 

Conversely, the erstwhile law provided that the appointment shall be made by the Chief Justice or any person or institution designated by him. Thus, there was confusion on two points:

 

  • Who will make the appointment – Justice Gogoi who was the Judge designated by the CJI or the “Supreme Court”?
  • Whether this Ordinance shall apply to an arbitration which has been initiated before the Ordinance was passed?

 

Furthermore, adding to this confusion is the possibility that the Ordinance may lapse in a few weeks. All an all, not the best situation to promote investor sentiment in the country, which was the aim of the Ordinance to begin with.

 

Nevertheless, the Supreme Court has now issued clear directions regarding the appointment of an arbitrator as per the Ordinance. Justice Gogoi, before whom the RIL matter was pending has transferred the matter along with 23 other matters relating to the appointment of an arbitrator, to the Chief Justice of India (“CJI”). The CJI will constitute a Bench which will subsequently decide these matters.

 

Thus, Section 6 of the Ordinance (amending the procedure for the appointment of an arbitrator by the Court) applies to arbitrations which were initiated before the Ordinance was passed.

 

By : Adv. Niharika Dhall
info@lawsenate.com