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The unilateral appointment of an arbitrator is one of the most litigated topics in Indian arbitration. Many standard contracts, especially those used by government bodies, banks and large companies, allow one party to appoint the sole arbitrator or to name the panel from which the other side must choose.
The Supreme Court has repeatedly held that this is unfair. If your contract has such a clause, it may not work as written, and any award made by an arbitrator chosen this way may face a challenge. This guide explains how the law developed, what the latest decision says, and how to redraft your clause.
What is a unilateral appointment clause?
A unilateral appointment clause is a term in a contract that gives one party the power to select the arbitrator without the real participation of the other. Common forms include:
- The managing director, chairman or a nominated officer of one party appointing a sole arbitrator.
- One party preparing a list or panel of arbitrators, with the other party allowed to choose only from that list.
- One party appointing its own nominee and also the presiding arbitrator.
These clauses are common because they are simple. The problem is that they give one side control over the decision-maker.
How did the law develop?
The Supreme Court has built the law step by step.
| Case | What it decided |
|---|---|
| TRF Ltd v Energo Engineering Projects (2017) | A person who is ineligible under Section 12(5) cannot nominate another arbitrator. |
| Perkins Eastman Architects v HSCC (2019) | A party with an interest in the outcome cannot unilaterally appoint a sole arbitrator. |
| Voestalpine v DMRC (2017) and CORE-I (2019) | Panels with a wide choice were upheld, subject to fairness. CORE-II later disagreed with the approach on one-sided panels. |
| CORE-II (8 November 2024) | A five-judge bench held that unilateral appointment of a sole arbitrator and curation of a panel by an interested party violate equal treatment. |
Our earlier article on arbitrator independence and the Fifth and Seventh Schedules explains Section 12(5), which sits behind these rulings.
What did the five-judge bench hold in CORE-II?
In Central Organisation for Railway Electrification v ECI-SPIC-SMO-MCML (JV), the Supreme Court decided on 8 November 2024, by a three to two majority, that a clause cannot allow an interested party to unilaterally appoint a sole arbitrator or to curate a panel and require the other party to choose from it. The majority held that this breaches the principle of equal treatment in Section 18 and, in public-private contracts, the guarantee of equality under Article 14 of the Constitution. A government body may suggest names, but it cannot compel the other side to pick from them.
The Court applied its ruling prospectively and in relation to three-member tribunals, to avoid disturbing pending proceedings. It also noted that a party may accept a panel if it expressly waives the objection under Section 12(5). A detailed case note by AZB and Partners sets out the majority and dissent. Read the judgment itself before relying on the exact scope.
Which clauses are safe and which are risky?
| Clause type | Risk | Safer alternative |
|---|---|---|
| One party appoints the sole arbitrator | High. Invalid under Perkins Eastman | Joint appointment, or appointment by an institution or the court |
| One party prepares a panel and the other must pick | High. Disapproved in CORE-II | Each party nominates one arbitrator and the two choose the presiding arbitrator |
| Each party nominates, nominees choose the presiding arbitrator | Low | Keep, with disclosure under Section 12 |
| Institution appoints under its rules | Low | Keep, and name the rules and the seat clearly |
| Court appoints under Section 11 when parties fail | Low | Keep as the fallback |
What should you do if your contract has such a clause?
- Read the clause and identify who appoints and whether the other side has any real say.
- Check the date of the contract and the date of the appointment, because the Supreme Court limited the effect of CORE-II to future appointments.
- If you are the party that did not choose, raise the objection at once in writing. Do not take part in the arbitration without recording your objection.
- If you are asked to agree to the unilateral appointee after the dispute has arisen, treat it as a possible waiver and take advice first.
- If the other side does not agree to a neutral appointment, apply to the High Court under Section 11. See our guide to Section 11 appointment of arbitrator.
Delay and participation can be read against you, so act early.
How to redraft your arbitration clause
- Let each party nominate one arbitrator and let the two nominees choose the presiding arbitrator.
- Or use an arbitral institution to appoint, with transparent rules.
- Include a clear fallback to the court under Section 11.
- Require disclosure under Section 12 and a statement of independence from every appointee.
- Avoid wording that names an officer of one party as arbitrator.
For more drafting ideas, read tips for drafting an effective arbitration agreement, choosing the right arbitrator and arbitration of corporate disputes in India.
Key takeaways
- A party with an interest in the outcome cannot unilaterally appoint a sole arbitrator.
- CORE-II (8 November 2024) extended the principle to one-sided panels, based on equal treatment.
- The ruling operates prospectively and in relation to three-member tribunals.
- Waiver is possible only through an express written agreement.
- Redraft clauses to give both parties a real role in appointment.
Frequently asked questions
Is a unilateral appointment of an arbitrator valid in India?
No, where the appointing party has an interest in the outcome. The Supreme Court held in Perkins Eastman (2019) that such a party cannot appoint a sole arbitrator. CORE-II (2024) extended the idea to one-sided panels in public-private contracts.
What did CORE-II decide?
On 8 November 2024, a five-judge bench held by majority that a clause cannot let one party unilaterally appoint a sole arbitrator or curate a panel and force the other side to choose. It rested its view on equal treatment under Section 18 and Article 14 in public-private contracts.
Does the ruling apply to my old contract?
The Supreme Court applied it prospectively and in relation to three-member tribunals, to avoid disrupting existing proceedings. The exact scope depends on the facts and the date of appointment, so read the judgment and take advice before relying on it.
Can the parties still agree on a panel?
A government body or a company may suggest a panel. The majority held that it cannot compel the other side to choose from it. A party can accept the panel, but only through an express waiver after the dispute has arisen.
What if I took part in the arbitration without objecting?
Participation without a clear written objection can be read against you, and waiver must be express and in writing. If you object, say so early and apply under Section 11 or Section 14, as the case requires. Get advice at once.
What is a safe appointment clause?
A safe clause lets each party nominate an arbitrator and lets the nominees choose the presiding arbitrator, or lets a recognised institution appoint under its rules. Add a court fallback under Section 11 and a duty to disclose under Section 12.
Sources and references
- Arbitration and Conciliation Act, 1996 (India Code)
- CORE-II: Supreme Court on unilateral arbitrator appointments (AZB and Partners)
Disclaimer: this article is general information on Indian arbitration law and is not legal advice. Laws and judgments change, so please verify the current position and take professional advice for your facts.
Last reviewed: October 2026.
