Can HC Appoint Sole Arbitrator When Arbitration Clause Provides For Unilateral Appointment Of Arbitrator ? Supreme Court To Consider

The Supreme Court on Monday ( January 20) agreed to consider the issue of whether the High Court can appoint a sole arbitrator under the Arbitration and Conciliation Act 1996 if the arbitration agreement between parties provides for unilateral appointment in violation of the decision in CORE v. M/S ECI SPIC SMO MCML. 

The bench of CJI Sanjiv Khanna and Justice Sanjay Kumar was hearing the challenge to the order of the Patna High Court which refused to appoint an arbitrator under S. 11(6) of the Arbitration and Conciliation Act 1996 in a tender-related dispute.  Here, the petitioner who is a private party entered into a work contract with the Building Construction Department of Govt. of Bihar. The High Court ultimately rejected the request of appointing a sole arbitrator. 

The High Court was of the view that the arbitration clause, namely clause 25 of the agreement was in contravention of the recent decision of the Apex Court where the Court held unilateral appointment of arbitrator by one party in public-private contracts as violative of Article 14 (equality principle). 

The High Court referring to clause 25 observed: "It is also a term of this contract that no person other than a person appointed by such Engineer-in-Chief or the administrative head of the department as aforesaid should act as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitrator at all” . 

Before the Supreme Court, the petitioner mainly contended that the High Court overlooked the other relevant aspects of Clause 25 which lays down the complete arbitration agreement and wrongly focused only on the mode and manner of the appointment of the arbitrator. The petitioner in his plea argued that Clause 25 was in compliance with S. 7 of the 1996.  S. 7 lays down the essential elements in an arbitration agreement. 

The petitioner stressed that it would not be the case that just because the terms of appointment are against the settled principle of law, parties would be barred from seeking the appointment of a sole arbitrator by the High Court under S.11(6). 

"The Hon'ble High Court has failed to appreciate that the learned sole arbitrator can still be appointed by the Hon'ble High Court in exercise of power conferred under section 11(6) of the A&C Act. Mere fact that the unilateral appointment of the sole arbitrator has been held to be illegal does not and cannot denude the High Court to make such an appointment if there is an arbitration agreement in writing. It is a settled position of law that in a case involving appointment of sole arbitrator, the only option is to invoke the jurisdiction of the Hon'ble High Court u/s 11(6) of the A&C Act in the absence of consent of both the parties."

The bench has issued notice in the matter. 

The SLP was filed with the assistance of AOR Prashant Kumar. 

Case Detail : M/S R.S. CONSTRUCTION vs. BUILDING CONSTRUCTION DEPARTMENT | SLP(C) No. 000979 - / 2025