SC: Third arbitrator in global dispute must be from neutral nation

NEW DELHI: The Supreme Court has said the third arbitrator in any international rift involving a foreign company should always be from a neutral country for a sense of fairness and to promote India as an arbitration hub.

A bench led by Chief Justice of India JS Khehar made this observation on Wednesday during a hearing in a case involving IIRF Realty XVI and Aria Hotels and Consultancy Services Pvt.

The CJI said both parties should agree on some names to act as the third arbitrator, failing which the court would appoint an arbitrator.


“We have always appointed neutral arbitrators,” said Khehar, sitting alongside Justices DY Chandrachud and Sanjay Kishan Kaul.

The observations may have ramifications for several cases that have been held up because both sides could not agree on a neutral third arbitrator.

One such case involves Reliance Industries’ row with the government of India on the KG-D6 basin, which has been held up, with RIL insisting that the third arbitrator be experienced in Indian law.