RSH (NA) 15 March 2010

Arbitrator - illegal appointment

Dear Experts

Though I have read in this forum that 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.

I signed an agreement which says, "The claim for compensation/liquidated damages for any breach and all other matters, actions, disputes, claims, differences or controversies between the parties hereto arising out of or in connection with or in relation to this Agreement, whether in contact, tort, or otherwise shall be finally settled and resolved by arbitration to be conducted at New Delhi, in accordance with the Arbitration & Conciliation Act 1996, by Sole Arbitrator appointed or nominated by the Director of the Employer. The decision of this arbitrator shall be final and binding on both the parties.

I above clause, there is no mention of Who will be the arbitrator at he time of dispute?

So, is it open or blank provision? as it gives right to one party to decide and impose the decision on other.

Please help!

RSH

Reply Follow

8 Replies

Daksh (Student) 15 March 2010

Dear RSH,

Kindly see provisions of Section 8,10 & 11 of the Arbitration & Conciliation Act.

Best Regards

Daksh

RSH (NA) 15 March 2010

THANKS FOR YOUR REPLY, DAKSH

But I am not a lawyer and cud not find the information as per suggestion.

So kindly reply my query or tell me where i can find the information on the sections in A&C law.

Best

RSH

R.R. KRISHNAA (Legal Manager) 15 March 2010

RSH

I don't find anything illegal. An arbitrator need not necessarily be a named person in the contract. He (arbitrator) can be appointed later / any time, when dispute arises. One party is entitled to appoint a arbitrator if the other party has expressly consented for the same.

Gundlapallis (Advocate) 16 March 2010

I concur with Krishna jis's view.

Vinod kashyap (Advocate & Legal advisor) 17 March 2010

I do agree.

Prashant Chamoli (Legal retainer) 17 March 2010

Mr. RSH it very clear that Arbitrator would be appointed/nominated by Director of Employer. Y dont u guys check these clause while signing the contract and ask to change the such clause rather than signing contract with blind folds.

Chanchal Nag Chowdhury (Advocate) 10 May 2010

U R left with little choice but U can challenge appt. of arbtr. U/S 34 of ACA in court.

Vineet (Director) 15 May 2010

Do agree with Mr Krishna. There is nothing illegal in the arbitration clause.

Your options are very limited u/s 34 to challenge the award also as you have to prove that proper opportunity was not accorded to you or you were under some incapacity or some other aspects as mentioned in that provision.