Perkins Eastman Architects DPC vs HSCC (India) Ltd
(2020) 20 SCC 760
Unilateral Arbitrator Appointment
Read the judgmentBackground
Perkins Eastman challenged an arbitration clause in its contract with HSCC (a government PSU) under which HSCC's own CMD had the power to appoint the sole arbitrator. Perkins argued that a person who is an employee or officer of one of the parties, or who has an interest in the outcome, cannot appoint an arbitrator under the 2015 Amendment.
What the court decided
The Supreme Court held that when a party to a dispute has the right to appoint a sole arbitrator, this right cannot be exercised by that party's own officer or employee. The principle extends: if one party has a unilateral right to appoint, the appointment is inherently suspect. The Court directed appointment of an independent arbitrator under Section 11. This judgment extends and reinforces Ssangyong.
What this means for your contracts team
Government contracts (NHAI EPC, CPWD, and state PWD) that give the departmental head (Director General, CMD, Chairman) the right to appoint an arbitrator are void after this judgment. Raise this objection at the outset of any arbitration, not after participating under the void clause.
The law is on your side. The documentation has to be too.
Perkins Eastman Architects DPC won on contemporaneous records. CivilBolt structures your correspondence and site records so the evidence exists when you need it.