Bombay High Court: Unilateral Arbitrator Appointments Pre-2015 Valid in Law

• The Bombay High Court has ruled that unilateral arbitrator appointments made before October 23, 2015, remain valid unless they lacked contractual consent.
• The ruling applies to arbitration agreements entered into before the 2015 amendments to the Arbitration and Conciliation Act, 1996.
• Lawyers advising clients on pre-2015 arbitration agreements should review the contractual language to determine if unilateral arbitrator appointments were permitted.
• The decision highlights the importance of ensuring the impartiality of arbitrators in arbitration proceedings.

Unilateral appointment of an arbitrator prior to 23 October 2015, where the arbitration clause provides for a named arbitrator, an arbitrator by designation, or authorises one of the parties to appoint an arbitrator, will not be without jurisdiction and, consequently, the proceedings arising therefrom would not be void ab initio, except where there is no contractual clause naming a particular arbitrator or conferring on one of the parties the right to unilaterally appoint an arbitrator, but an appointment is nevertheless made by one party in the absence of the other party's consent.

The Bombay High Court has made a significant ruling regarding unilateral arbitrator appointments. In an August 4 decision, Justice Jitendra Jain clarified that such appointments made before October 23, 2015, remain valid unless they lacked contractual consent. The ruling came in the case of Paisalo Digital Ltd v Star Bazaar Pvt Ltd and connected petitions, where Star Bazaar objected to the enforcement of an award on the grounds that the sole arbitrators had been appointed unilaterally prior to the 2015 amendments to the Arbitration and Conciliation Act, 1996. The Court's observation has implications for arbitration agreements entered into before 2015.

The ruling is significant because it clarifies the validity of unilateral arbitrator appointments made before the 2015 amendments to the Arbitration and Conciliation Act, 1996. The amendments were introduced to ensure the impartiality of arbitrators, but the Court's decision suggests that such appointments remain valid unless they lacked contractual consent. This means that lawyers advising clients on pre-2015 arbitration agreements should review the contractual language to determine if unilateral arbitrator appointments were permitted. The ruling is also relevant in light of the 2015 amendments, which introduced provisions for ensuring the impartiality of arbitrators.

The Bombay High Court's ruling has important implications for arbitration agreements entered into before 2015. Lawyers advising clients on such agreements should review the contractual language to determine if unilateral arbitrator appointments were permitted. If they were, then such appointments remain valid unless they lacked contractual consent. This means that parties involved in pre-2015 arbitration agreements may need to revisit their contracts and consider the implications of the Court's ruling. The decision also highlights the importance of ensuring the impartiality of arbitrators, which is a key principle underlying the Arbitration and Conciliation Act, 1996.

Lawyers advising clients on pre-2015 arbitration agreements should review the contractual language to determine if unilateral arbitrator appointments were permitted, as a Bombay High Court ruling has clarified that such appointments remain valid unless they lacked contractual consent.

Source: Original reporting via [Source]