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ca.bhupendrashah (FCADISA)     26 June 2008

appointment of arbitrator

can  a company reserve its right in the contract with its supplier to appoint sole arbitrator in case its supllier default?

if yes, who will pay the fees?

can this arbitrator be challenged u/s 12[3][a]?

does he have jurisdiction u/s 16[1]?


 11 Replies

Prakash Yedhula (Lawyer)     27 June 2008

If there is a concluded contract for appointment of a sole arbitrator to be appointed by one party, then the other party cannot question it unless there is an element of fraud, misrepresentation, undue influeinceetc in singing the contract.

podicheti.srinivas (advocate/legal consultant)     27 June 2008

If the terms and conditions of the agreement is silent on the payment of fees to the arbitratior ,the arbitrator will himself fix his fees .in most of the cases i have seen the high court of andhra pradesh was leaving it to the discretion of the arbitrator to fix his fees which the both the parties to the arbitration has to bear. 

If the agreement specifically say that the arbitration fees should not excced certain sum i.e.50,000/-then the arbitrators fees should not exceed  the same .only in international agreements we see such type of clauses,in domestic agreements we will not find such clauses.

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     28 June 2008

Irrespective of the agreement all the appointments of the Arbitrators are covered under the Arbitration act.

One sided agreements have to confirm the provisions of Contract act also. If the agreement is void under the Contract act all other provisions in the agreement will also be void.

Law is nothing but strong common sense. You can apply this dictum to any law. So is the case with the arbitrations. An arbitrator is the person representing both the parties. So both the parties have to agree for appointment and most important thing which most of the people forget is that the reference for arbitration has to be given by both the parties.

Based on this discussion you can provide for a sole arbitrtor in the contract but the same has to be named in the agreement. You can not keep this issue open. Your agreement to appoint any body as a sole arbitrator on a future date will make your agreement one sided . 

There is no consensus ad idem  between the parties making agreement and the whole agreement is void and not enforcable.

mintu (advocate)     14 July 2008

can  a company reserve its right in the contract with its supplier to appoint sole arbitrator in case its supllier default?


Yes, section 11. Appointment of arbitrators. –

(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.

(2) Subject to sub-section (6), the parties are free to agree on a procedure for

appointing the arbitrator or arbitrators.

Supreme court in Appeal (civil)  2386 of 2007 has expressed his view as under:

In the matter of settlement of dispute by arbitration, the agreement executed by the parties has to be given great importance and an agreed procedure for appointing the arbitrators has been placed on high pedestal and has to be given preference to any other mode for securing appointment of an arbitrator.


if yes, who will pay the fees?


If fee of the arbitrator has not been decided at the time of agreement, it can be decided before reference of disputes or arbitrator himself will decide it reasonably.


can this arbitrator be challenged u/s 12[3][a]?

answer: yes

section 12. Grounds for challenge. -

(3) An arbitrator may be challenged only if-

(a) Circumstances exist that give rise to justifiable doubts as to his

independence or impartiality, or

(b) He does not possess the qualifications agreed to by the parties.


does he have jurisdiction u/s 16[1]?


section: 16. Competence of arbitral tribunal to rule on its jurisdictional. -

(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on

any objections with respect to the existence or validity of the arbitration


1 Like

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     17 July 2008

With due respect to above opinon and citation one basic fact remain regarding the appointment of arbitrator that you have to provide the procedure in the agreement.

Suppose you provide for a  " X " person to be sole arbotrator in the agreement signed by both parties, it is valid. But by the time of dispute if  "X" does not survive than who will be the sole arabitrator.

The blank and open provision that in the event of dispute a sole Arbitrator will be appointed by one party is not legal under  contract act as well under  Arbitration act..

The basic concept of Arbitartion is that the arbitrator has to be appointed by the procedure agreed by both parties. You can not bind a party for acceptance. in future.

Abhishek Rajurkar (advocate)     12 May 2011

in the matter of arbitration there is need of only arbitration clause...u can not say void agreement if the name of arbitrator is not there....other party has the right to challange the arbitrator...high court can appoint the arbitrator if u need..


I agree with your advocate advise.

Narendra Sharma (Consultant)     13 May 2011

I agree with MINTU advocate advice.

RSH (NA)     13 July 2011

Both 'Your Advocate' and 'Advocate Mintoo' make sense.

My request for 'Mr Your Advocate' - Can you provide me citation where arbiration can be challenged.

I am indulge in a case where the arbitration clause is OPEN (sole arbitrator by one party, no fees fixed, no name).

Most important is that this arbitration clause is in a contract which is clearly against Fundamental Rights and hit by Section 27 of Contract act.

A guidance/citation from experts would a great help!



DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     13 July 2011

it is a very old querry , pl go through the act and its provision throughly and you will find answers.

On this public site if you want to solve problems, pl give actual documents.

RSH (NA)     13 July 2011

Dear Mr Your Advocate


I know this is OLD QUERY but I still seek the solution - basically a citation. It would be a great help of you if you can guide me. I have an agreement which can be sent to you.




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