Setting aside an arbitral award under Article 142 of the Constitution of India, the Supreme Court of India recently held that the courts cannot replace the arbitrator in deviation of the terms of the agreement between the parties
The Court said, “When the parties have consciously agreed that the disputes or differences shall be referred to the Managing Director himself or his nominee for sole arbitration and having participated in the arbitral proceedings before arbitrator for quite some time, the respondent cannot turn round and seek for appointment of an independent arbitrator.”
The Court also clarified that the appointment of substitute arbitrator has to be in accordance with the agreement between the parties. Thus, even appointment of substitute arbitrator has to be done in accordance with the original arbitration agreement.
The Court reaffirmed that Arbitration and Conciliation Act, 1996 as amended in 2015 would not apply to arbitrations commenced prior to amendment in 2015.