In a landmark judgment delivered in November 2024, a Constitution Bench of the Supreme Court of India examined the validity of arbitration clauses that allow a party to the dispute to unilaterally appoint the arbitrator(s). The Court held that such clauses undermine the principles of equal participation in the appointment process, thereby compromising the independence and impartiality of the arbitrators. It found these clauses to be in violation of the provisions of the Arbitration and Conciliation Act, 1996, the Indian Contract Act, 1872, and Article 14 of the Constitution of India.
The Court reaffirmed the principle of party autonomy in
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