Supreme Court Appoint Sole Arbitrator in Glock Asia-Pacific Ltd. vs. Union of India

In a recent judgment, the Supreme Court of India delivered its decision on the application for the appointment of a Sole Arbitrator in the case of M/S Glock Asia-Pacific Ltd. vs. Union of India. The judgment, delivered by Justice Pamidighantam Sri Narasimha, addresses crucial issues regarding the appointment of an arbitrator under the Arbitration and Conciliation Act, 1996.

The facts of the case revolve around a tender issued by the Ministry of Home Affairs, inviting bids for the supply of Glock Pistols. The bid was confirmed in favor of Glock Asia-Pacific Ltd., and the contract included a provision for arbitration in case of disputes. However, a dispute arose concerning the appointment of the arbitrator as per the terms of the contract.

The Ministry of Home Affairs contended that the arbitration clause in the contract required disputes to be referred to an officer in the Ministry of Law appointed by the Secretary of the Ministry of Home Affairs. On the other hand, Glock Asia-Pacific Ltd. argued that such an appointment would be contrary to Section 12(5) of the Arbitration and Conciliation Act, which prohibits the appointment of an arbitrator who has a relationship with the parties or counsel.

Addressing the issue, the Supreme Court examined the relevant provisions and legal principles. It held that the contract, expressed in the name of the President of India, did not provide immunity against the statutory prescriptions imposed on parties to an agreement. Furthermore, the Court emphasized that the appointment of an arbitrator under the arbitration clause fell within the expressly ineligible category of Section 12(5) of the Act.

The Court also distinguished the present case from the precedent of Central Organisation of Railway Electrifications, where the appointment procedure and composition of the arbitral tribunal were different. It noted that the appointment of retired railway officers as arbitrators in that case was based on utilizing their technical expertise, which was not applicable to the present situation.

Supreme Court allowed the application and appointed Justice Indu Malhotra, a former judge of the Supreme Court, as the Sole Arbitrator to adjudicate the disputes arising from the contract. The Court further emphasized the need for mandatory disclosures under the amended Section 12 of the Act.

Date of Decision: May 19, 2023

M/S GLOCK ASIA-PACIFIC LTD. vs UNION OF INDIA