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Chapter III : Case Laws

Chapter III (Sections 10–15) focuses on the Composition of the Arbitral Tribunal. In late 2024 and throughout 2025, the Supreme Court completely overhauled the law regarding how arbitrators are appointed, particularly in contracts involving the Government or PSUs.

1. Section 11: Appointment of Arbitrators

The biggest shift in 2025–2026 is the death of “Unilateral Appointments.”

Central Organization for Railway Electrification (CORE) v. ECI-SPIC-SMO-MCML (Nov 2024 / Reaffirmed 2025):
The Rule: A 5-judge Constitution Bench finally settled the “Panel” controversy.
The Decision: It ruled that an arbitration clause cannot mandate that one party must select its arbitrator from a narrow, curated panel prepared by the other party (usually a PSU).
Impact: This ensures “Equal Treatment of Parties” (Section 18). Any clause that allows one party to dominate the appointment process is now void.
Shakti Pump India Ltd. v. Apex Buildsys Ltd. (March 2025):
The Rule: Clarified that participating in an arbitration does not mean you have waived your right to challenge a unilateral appointment.
The Decision: Unless there is an “express agreement in writing” (not just conduct) after the dispute has arisen, a unilateral appointment remains illegal under Section 12(5).
Aslam Ismail Khan Deshmukh v. ASAP Fluids (2025):
The Rule: While Section 11 is about “existence” of the agreement, the court must “prima facie” weed out dead claims (time-barred) to save parties from costly, futile arbitrations.

2. Section 12: Grounds for Challenge & The 7th Schedule

Section 12 (read with the 7th Schedule) lists who cannot be an arbitrator (e.g., employees, consultants, or those with a financial interest).

Perkins Eastman v. HSCC (Reaffirmed 2026 INSC 6):
The Rule: A person ineligible to be an arbitrator is also ineligible to appoint one.
Recent Update: The Supreme Court in early 2026 confirmed that this applies even to three-member tribunals where a PSU Chairman tries to appoint the presiding arbitrator unilaterally.
The “Express Waiver” Rule (2025 Trends):
Courts are now extremely strict about the Proviso to Section 12(5). A “No Objection” recorded in a procedural order by the arbitrator is not enough. There must be a signed document by both parties explicitly waiving the conflict of interest.

3. Section 14 & 15: Termination of Mandate

Jagdeep Chowgule v. Sheela Chowgule (Jan 2026):
This is the most critical recent case for Section 14. It held that if an arbitrator becomes “de jure” unable to perform functions (e.g., they are hit by a Section 12(5) conflict), their mandate terminates automatically.
The court clarified that you can challenge this “ineligibility” even for the first time during the Section 34 (set-aside) stage if it goes to the root of the appointment.

Procedural Flow: Appointing an Arbitrator in 2026

Summary Table for Chapter III

Section	Key Issue	Recent Landmark
11(6)	PSU Panels / Unilateral Appointment	CORE v. ECI-SPIC (Constitution Bench, 2024)
12(5)	Waiver of Conflict	Shakti Pump v. Apex Buildsys (2025)
14	De Jure Inability	Jagdeep Chowgule (2026)
11	Dead/Time-barred Claims	Aslam Ismail Khan Deshmukh (2025)

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