How is an arbitrator appointed under Indian law?

Why the Appointment of Arbitrator Is Critical in India

When a business deal sours or a contract dispute arises, many parties choose arbitration over lengthy court battles. But who decides the dispute? How is the arbitrator actually appointed? Can one party pick someone biased? What happens if both sides cannot agree?

The appointment of arbitrator under Indian law is not merely a procedural formality. It forms the foundation of fair arbitration proceedings. If the arbitrator is not appointed correctly, the entire arbitration can collapse. If one party manipulates the process, the award can be challenged and set aside. If the appointment violates the Arbitration and Conciliation Act, 1996, courts can intervene and restart the process.

This article explains exactly how arbitrators are appointed in India, what the law requires, what problems arise in practice, and how you can protect your rights during this critical stage. Whether you are invoking arbitration, defending a claim, or stuck in an appointment dispute, this guide will clarify every step.

Legal Framework Governing Appointment of Arbitrator

The Arbitration and Conciliation Act, 1996 is the primary legislation governing arbitration proceedings in India. The Act was amended significantly in 2015 to reduce delays and court interference, and further amended in 2019 and 2021 to improve institutional arbitration and arbitrator independence.

Section 11: Core Provisions for Appointment

Section 11 of the Arbitration Act is the central provision dealing with the appointment of arbitrator. It lays down the procedure for appointing arbitrators when parties cannot agree.

Key features of Section 11 include:

1. Section 11(2): Parties are free to agree on the procedure for appointing arbitrators.

2. Section 11(3): If there is no agreed procedure or parties fail to follow it, the appointment can be made by the Supreme Court or High Court or a designated authority.

3. Section 11(6): Courts or authorities must appoint arbitrators from a panel of arbitrators maintained under Section 11(3A) for domestic arbitrations.

4. Section 11(8): Courts must decide appointment applications within 60 days from the date of service of notice.

The 2019 amendment introduced the concept of Arbitral Institutions to handle appointments, reducing judicial burden. The 2021 amendment further refined qualifications and disclosure requirements for arbitrators.

Section 12: Independence and Impartiality Requirements

Section 12 mandates that arbitrators must disclose any circumstances likely to give rise to justifiable doubts about their independence or impartiality. The Fifth and Seventh Schedules to the Arbitration Act list specific relationships and interests that disqualify arbitrators.

An arbitrator must disclose all facts that could reasonably affect their impartiality. Failure to disclose material conflicts can result in termination of their mandate or grounds for challenging the arbitral award.

Section 12A: Immediate Termination for Ineligibility

Section 12A, introduced in 2019, allows parties to apply for unconditional and immediate termination of the mandate of an arbitrator if they become ineligible under the Seventh Schedule. This provision ensures that ineligible arbitrators can be removed swiftly without prolonged procedural challenges.

Section 13: Challenge to Arbitrators

If an arbitrator is appointed but later found to be biased or ineligible, Section 13 allows parties to challenge the appointment before the arbitral tribunal itself. If the challenge is rejected, the party can approach the court for a final decision on the arbitrator's eligibility.

Section 15: Termination of Mandate

An arbitrator's mandate terminates if they become unable to perform their functions, withdraw from the appointment, or are removed by agreement of the parties or by court order under Section 15.

How Is the Appointment of Arbitrator Done in Practice?

The appointment of arbitrator follows different paths depending on the arbitration agreement and the number of arbitrators specified.

Appointment by Agreement Between Parties

If the arbitration clause specifies a procedure, parties must follow that procedure. For example, if a construction contract states that disputes shall be resolved by a sole arbitrator mutually appointed by both parties, and both parties agree on a name, that person becomes the arbitrator. No court intervention is needed.

The arbitration agreement serves as the primary source of authority for the appointment process. Courts will not interfere if parties have followed the agreed procedure.

Appointment of a Sole Arbitrator

Under Section 11(3), if the arbitration agreement does not specify a procedure for appointing a sole arbitrator, or if parties fail to agree within 30 days of a request, either party can apply to the Supreme Court or High Court or a designated arbitral institution.

The court or institution appoints a sole arbitrator from the panel maintained under Section 11(3A). For domestic arbitrations, Section 11(6) mandates that the appointment must be from this panel unless both parties agree otherwise.

Appointment of Three Arbitrators

Under Section 11(4), if the arbitration agreement provides for three arbitrators, each party appoints one arbitrator, and the two appointed arbitrators appoint the third arbitrator who acts as the presiding arbitrator.

If one party fails to appoint their arbitrator within 30 days of receiving a request, or if the two arbitrators fail to appoint the third within 30 days of their appointment, the court or arbitral institution can make the appointment.

Appointment by Arbitral Institution

The 2019 amendment to the Arbitration Act introduced Section 11(6A), allowing the Supreme Court or High Court to designate arbitral institutions to handle appointments. The Sixth Schedule lists grading criteria for arbitral institutions.

Once designated, these institutions can appoint arbitrators without court involvement, speeding up the process. Examples of designated institutions include:

• Indian Council of Arbitration (ICA)
• Mumbai Centre for International Arbitration (MCIA)
• Delhi International Arbitration Centre (DIAC)

Appointment by Court

If no arbitral institution is designated, or if parties prefer court appointment, the High Court or Supreme Court, depending on jurisdiction, handles the appointment of arbitrator under Section 11(6).

The court must act within 60 days of receiving the application. Courts have minimal discretion and must appoint from the panel unless parties agree otherwise.

Common Problems in Appointment of Arbitrator

Despite clear legal provisions, several practical problems arise during the appointment of arbitrator.

Problem 1: One Party Delays or Refuses to Appoint

In commercial disputes where the arbitration clause requires each party to appoint one arbitrator, one party may deliberately delay or refuse to appoint. Under Section 11(5), if one party fails to act within 30 days, the other party can approach the court or arbitral institution for appointment.

File an application under Section 11 of the Arbitration Act with documentary proof of the request and failure to respond. Courts typically appoint the arbitrator within the statutory 60-day period.

Problem 2: Appointment Clause Is Unworkable

Sometimes the arbitration clause names a specific person or institution that no longer exists or is defunct. For example, if the clause states that disputes shall be referred to the Chief Engineer of a particular corporation, but that person has retired or the corporation has been dissolved, the clause becomes inoperable.

Courts or arbitral institutions step in under Section 11(6) and appoint a substitute arbitrator. To avoid this problem, draft arbitration clauses with fallback mechanisms, such as specifying that if the named arbitrator is unavailable, the parties shall jointly appoint a substitute within 15 days, failing which appointment shall be made by the High Court.

Problem 3: Arbitrator Turns Out to Be Biased

An arbitrator may be appointed, but later it emerges that they have a financial interest in one of the parties or a close relationship with one party's director. The affected party can challenge the arbitrator under Section 12 (disclosure requirements) and Section 13 (challenge procedure).

If the arbitrator falls under the Seventh Schedule (ineligible categories), the party can apply for termination under Section 12A.

Always conduct due diligence on proposed arbitrators. Check their past appointments, disclosed interests, and professional background. Request full disclosures in writing before accepting appointment.

Step-by-Step Guide to Proper Appointment of Arbitrator

Step 1: Review the Arbitration Agreement

Check your contract's arbitration clause carefully. Identify whether it specifies the number of arbitrators (sole or three), the procedure for appointment, and any named arbitrator or institution.

Step 2: Issue Written Notice for Appointment

If the clause requires mutual appointment, send a written notice to the other party proposing a name or asking them to appoint their arbitrator. Preserve proof of delivery through email receipts, courier tracking, or registered post acknowledgment.

Step 3: Allow Statutory Time Period

Under Section 11(4) and Section 11(5), parties have 30 days to respond. Do not approach the court prematurely. Allow the statutory period to elapse before taking further action.

Step 4: Apply Under Section 11 if No Agreement

If the other party does not respond or refuses to cooperate, file an application under Section 11 before the High Court or designated arbitral institution.

Documents required include:

• Copy of the arbitration agreement
• Notice issued for appointment
• Proof of non-response or refusal
• Details of proposed arbitrator(s)

Step 5: Cooperate with Court or Institution

Once the application is filed, the court or institution will review the arbitration agreement and appoint the arbitrator(s) within 60 days. Provide any additional information requested promptly.

Step 6: Verify Arbitrator Disclosures

Once appointed, the arbitrator must disclose any potential conflicts under Section 12. Review these disclosures carefully. If any red flags appear, raise objections immediately under Section 13.

Things to Avoid During Appointment of Arbitrator

Avoid unilateral appointment without clause support. Do not appoint an arbitrator unilaterally unless the arbitration clause explicitly permits it. Courts will set aside such appointments.

Avoid appointing clearly ineligible persons. Do not propose someone who is a current employee, relative, or business partner of your company. Such appointments violate Section 12 and the Seventh Schedule.

Avoid ignoring disclosure requirements. If the arbitrator fails to disclose conflicts, challenge the appointment immediately under Section 13. Waiting until after an adverse award is too late.

Avoid delay tactics. Deliberately delaying the appointment of arbitrator to frustrate the other party can backfire. Courts can impose costs and appoint arbitrators swiftly under Section 11(8).

Avoid informal agreements without written confirmation. If parties agree on an arbitrator verbally or over email, confirm it in writing signed by both parties. Informal agreements can lead to disputes later.

When to Seek Legal Advice

The appointment of arbitrator is a critical procedural step. Mistakes at this stage can delay arbitration proceedings or result in biased adjudication.

Consult a qualified arbitration lawyer if:

• The arbitration clause is ambiguous or unworkable
• The other party refuses to cooperate in appointment
• You need to file an application under Section 11 before the High Court
• The proposed arbitrator has potential conflicts of interest
• You need to challenge an arbitrator under Section 13 or Section 12A
• You are defending against a challenge to your appointed arbitrator

Professional legal guidance ensures that the appointment of arbitrator complies with the Arbitration Act, protects your procedural rights, and sets the foundation for a fair arbitration process.

Frequently Asked Questions on Appointment of Arbitrator

Can I appoint my company's lawyer as the arbitrator?

No. Under the Seventh Schedule to the Arbitration Act, a person who has a past or present business relationship with one of the parties is ineligible to act as an arbitrator. Appointing your own lawyer would violate independence requirements under Section 12.

What happens if the other party does not respond to my notice for appointment of arbitrator?

If the other party does not respond within 30 days of your notice, you can file an application under Section 11 of the Arbitration Act before the High Court or a designated arbitral institution. The court or institution will appoint the arbitrator on your behalf.

How long does it take for a court to appoint an arbitrator under Section 11?

Under Section 11(8), courts are required to decide appointment of arbitrator applications within 60 days from the date of service of notice. In practice, most High Courts adhere to this timeline, though some delays may occur depending on case load.

Can I challenge the appointment of an arbitrator after arbitration has started?

Yes. If you discover that the arbitrator has undisclosed conflicts or falls under the ineligible categories listed in the Seventh Schedule, you can challenge the appointment under Section 13 of the Arbitration Act. You can also apply for termination under Section 12A if the ineligibility is clear.

Do I need a lawyer to file an application for appointment of arbitrator?

While it is legally possible to file the application yourself, it is highly advisable to engage a lawyer experienced in arbitration proceedings. The application must comply with procedural requirements, include proper documentation, and argue jurisdictional issues. A lawyer ensures the application is drafted correctly and presented effectively.

What is the panel of arbitrators under Section 11(3A)?

Section 11(3A) requires the Supreme Court and High Courts to maintain panels of accredited arbitrators. For domestic arbitrations, courts must appoint arbitrators from this panel unless both parties agree otherwise. This ensures that arbitrators meet minimum qualification and experience standards.

Can foreign nationals be appointed as arbitrators in Indian arbitrations?

Yes. The Arbitration Act does not restrict the nationality of arbitrators unless the arbitration agreement specifies otherwise. Foreign arbitrators can be appointed in both domestic and international commercial arbitrations seated in India, provided they meet independence and disclosure requirements under Section 12.

What qualifications should an arbitrator have?

While specific qualifications depend on the nature of the dispute, it is generally advisable for arbitrators to have expertise relevant to the subject matter of the dispute. The panel maintained under Section 11(3A) includes arbitrators with verified qualifications and experience.

What if the appointed arbitrator cannot serve?

If an arbitrator is unable to fulfill their duties, their mandate terminates under Section 15. A party can request the court or the institution to appoint a replacement arbitrator following the same procedure used for the original appointment.

Conclusion

The appointment of arbitrator is the gateway to fair and effective arbitration proceedings under Indian law. It is not a mere procedural formality but the foundation upon which the entire dispute resolution process rests. Whether you are invoking arbitration, defending a claim, or stuck in an appointment deadlock, understanding how the Arbitration Act governs this process is essential.

From following contractual procedures to filing applications under Section 11, from verifying arbitrator disclosures to challenging biased appointments, every step matters. Mistakes or delays can frustrate the arbitration process, expose you to biased adjudication, or delay resolution by months or years.

If you are facing an arbitration dispute or need to initiate arbitration proceedings, ensure that the appointment of arbitrator is handled with procedural precision and legal discipline. Most arbitration disputes are resolved through structured pleadings, interim protection, and award enforcement strategy rather than prolonged court litigation. The key is procedural precision, tribunal strategy, and enforcement readiness from the outset.

This article is for informational purposes only and does not constitute legal advice. Please consult a qualified legal professional for specific guidance.

About LawCrust

LawCrust Legal Consulting, a subsidiary of LawCrust Global Consulting Ltd., is a top full-service legal firm in Mumbai, Delhi, Bangalore, and across India, delivering strategic legal solutions for NRIs, HNIs, and businesses with a global perspective. Since 2016, we have successfully handled over 10,000 cases through a strong network of 70+ in-house lawyers and senior partnered advocates.

We represent clients across all levels of the judiciary, from Magistrate Courts and High Courts to the Supreme Court of India, handling complex matters including NRI divorce, cross-border property disputes, immigration, corporate governance, mergers and acquisitions (M&A), and structured finance.

LawCrust also pioneers innovative legal solutions such as Litigation Finance, the Legal Protect Plan, and specialized services for law firm startups and enterprise fundraising.

For expert legal assistance, contact us:

Call Now: +91 8097842911

Email: inquiry@lawcrust.in