Court can Appoint Arbitrator Apart

The Supreme Court has ruled that even if an arbitrator has been specified in the contract, the court can appoint another in certain circumstances. If there is a reasonable apprehension in the mind of a party that he would not act independently or impartially or if he is not available, the aggrieved party can approach the chief justice of the high court and ask him/her to nominate a person different from the one named in the agreement, the Supreme Court said in the judgment, Union of India vs Besco Ltd.

The judge must give reasons for departure from the agreement. This was an exceptional case in which the government did not nominate its arbitrator within the prescribed time. Therefore, the aggrieved company approached the Delhi chief justice for appointment of an arbitrator. It did so. The government challenged it in the Supreme Court. The appeal was dismissed. The agreement had specified that it will be governed by the General Conditions and Special Conditions of Contracts. According to these, there is no insistence that a railway officer should act as arbitrator; any qualified person can be named. The government forfeited its right to appoint arbitrator within the time limit and, therefore, the chief justice rightly named an arbitrator, the judgment said.