1 month ago
Bombay High Court Upholds Pre-2015 Unilateral Arbitrator Appointments If Allowed
Sometimes when two people or companies disagree, they ask a special helper called an arbitrator to solve the problem.
The agreement they signed may say who gets to pick that helper.
A court called the Bombay High Court made a decision about this on August 4.
Before October 23, 2015, it was okay for one side to pick the arbitrator if the agreement allowed it.
In 2015, the law changed to make sure arbitrators are fair and independent.
The court said the new rule cannot cancel every appointment made before that date.
So an old appointment is still valid if the agreement allowed one side to choose the arbitrator.
But if the agreement did not allow that, the appointment could be invalid.
If someone already tried to challenge the appointment and lost, the court cannot later say the award is void.
The court will look at the four cases again on September 15.
The Bombay High Court held that an arbitrator unilaterally appointed before October 23, 2015 is not invalid if the arbitration agreement allowed one party to make the appointment.
Justice Jitendra Jain passed the judgment on August 4 in four execution proceedings involving SE Investments Ltd, now known as Paisalo Digital Ltd.
The court ruled that the 2015 amendment's Section 12(5), which strengthened arbitrator independence and impartiality, cannot be applied to invalidate every pre-cutoff appointment.
The court distinguished contractual appointments from unauthorized ones, ruling that appointments made without the agreement's consent could render the proceedings and award void.
The court held that where an appointment had already been challenged unsuccessfully, the executing court could not later treat the resulting award as void; the four matters return for hearing on September 15.
- Who
- Justice Jitendra Jain of the Bombay High Court, in matters involving SE Investments Ltd, now known as Paisalo Digital Ltd.
- What
- The court held that arbitrators appointed unilaterally before October 23, 2015 remain valid when the arbitration agreement permitted such an appointment.
- Where
- Bombay High Court, Mumbai.
- When
- Judgment passed on August 4; further hearing scheduled for September 15.
- Why
- Because the legal position changed only after the 2015 amendment introduced Section 12(5), which cannot retroactively invalidate appointments made under agreements that allowed unilateral appointments before that date.
Key facts
- Court
- Bombay High Court
- Judge
- Justice Jitendra Jain
- Judgment date
- August 4
- Judgment length
- 71 pages
- Key cutoff date
- October 23, 2015
- Legal provision
- Section 12(5), Arbitration and Conciliation Act (2015 amendment)
- Parties
- SE Investments Ltd, now Paisalo Digital Ltd
- Next hearing
- September 15
Quotes
Justice Jitendra Jain
Judge at the Bombay High Court
“Unilateral appointment of an arbitrator prior to 23 October 2015 wherein the arbitration clause provides for a named arbitrator or by designation or authorising appointment of an arbitrator by one of the party will not be without jurisdiction.”
freepressjournal.in
Sources
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