Supreme Court Replaces Arun Mishra in Adani-Rajasthan Power Dispute Arbitration

• The Supreme Court has replaced former judge Justice Arun Mishra as the arbitrator in the Adani-Rajasthan power dispute case.
• Justice Sanjay Kishan Kaul has been appointed as the new sole arbitrator with the consent of both parties.
• The change aims to avoid prolonging Section 34 objections and ensure a smoother arbitration process.
• Lawyers advising clients on joint ventures or arbitration proceedings should be aware of potential Section 34 objections and take steps to mitigate these risks.

Though we do not find the ground urged for change of arbitrator legally sustainable, however, during the course of hearing, the parties have mutually agreed for appointment of Justice Sanjay Kishan Kaul, former Judge of this Court, to be the sole arbitrator.

The Supreme Court has intervened in the ongoing arbitration proceedings between Parsa Kente Collieries Limited (PKCL) and Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL), replacing former Supreme Court judge Justice Arun Mishra as the arbitrator. This decision was made with the consent of both parties, who agreed to appoint Justice Sanjay Kishan Kaul in his place. The change comes after RRVUNL challenged the Rajasthan High Court's initial appointment of Justice Mishra, sparking concerns about potential Section 34 objections. The Supreme Court aimed to avoid prolonging this dispute by allowing questions surrounding Justice Mishra's appointment to persist.

The Supreme Court's decision highlights the growing importance of addressing potential Section 34 objections in arbitration proceedings. These objections can arise when parties challenge the validity or fairness of an arbitrator's appointment, potentially delaying or even derailing the dispute resolution process. In this case, the Supreme Court sought to mitigate these risks by replacing Justice Mishra with a new arbitrator, while also recording that the parties had mutually agreed on the change. This approach underscores the need for clear agreements and procedures in joint ventures and arbitration proceedings to minimize the risk of Section 34 objections.

The dispute between PKCL and RRVUNL stems from a joint venture formed by Adani Enterprises Limited and RRVUNL for coal development, mining, and transportation. The Rajasthan High Court initially appointed Justice Mishra as the sole arbitrator, but RRVUNL challenged this decision, leading to the Supreme Court's intervention. The replacement of Justice Mishra with Justice Sanjay Kishan Kaul brings a new perspective to the arbitration proceedings, which are expected to continue under the guidance of the newly appointed arbitrator.

Lawyers advising clients on joint ventures or arbitration proceedings should be aware of the potential for Section 34 objections and take steps to mitigate these risks, such as ensuring clear agreements and procedures are in place.

Source: Original reporting via Supreme Court orders and Rajasthan High Court decisions