Arbitration Clause Allowing MD To Appoint Sole Arbitrator After Failure Of Appointment By Mutual Consent Violates SC's Order: Delhi High Court

The Delhi High Court has struck down an arbitration clause that permitted a company’s Managing Director to unilaterally appoint a sole arbitrator. The court cited significant concerns about potential bias, reiterating the fundamental principle that arbitrator appointments must ensure neutrality and impartiality. This decision aligns with the Supreme Court's pronouncements on preventing one party from having a dominant say in the appointment of an arbitrator, which could compromise the fairness of the arbitration process. The ruling strengthens the integrity of arbitration as an alternative dispute resolution mechanism by safeguarding against conflicts of interest in arbitrator selection.