Q: Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

No. The Supreme Court has consistently held — in TRF Ltd. (2017), Perkins Eastman (2019), and most recently in Bhadra International (2026, Constitution Bench) — that unilateral appointment clauses are invalid. They violate the principles of independence, impartiality, and equality under the Arbitration and Conciliation Act, 1996. Courts will step in under Section 11(6) to appoint an impartial arbitrator instead.

Q: Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

No. The Supreme Court has consistently held — in TRF Ltd. (2017), Perkins Eastman (2019), and most recently in Bhadra International (2026, Constitution Bench) — that unilateral appointment clauses are invalid. They violate the principles of independence, impartiality, and equality under the Arbitration and Conciliation Act, 1996. Courts will step in under Section 11(6) to appoint an impartial arbitrator instead.

Q: Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

No. The Supreme Court has consistently held — in TRF Ltd. (2017), Perkins Eastman (2019), and most recently in Bhadra International (2026, Constitution Bench) — that unilateral appointment clauses are invalid. They violate the principles of independence, impartiality, and equality under the Arbitration and Conciliation Act, 1996. Courts will step in under Section 11(6) to appoint an impartial arbitrator instead.

Q: Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

No. The Supreme Court has consistently held — in TRF Ltd. (2017), Perkins Eastman (2019), and most recently in Bhadra International (2026, Constitution Bench) — that unilateral appointment clauses are invalid. They violate the principles of independence, impartiality, and equality under the Arbitration and Conciliation Act, 1996. Courts will step in under Section 11(6) to appoint an impartial arbitrator instead.

Question 1

Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

dhiraj.sharma@justicum.com · Accepted Answer

No. The Supreme Court has consistently held — in TRF Ltd. (2017), Perkins Eastman (2019), and most recently in Bhadra International (2026, Constitution Bench) — that unilateral appointment clauses are invalid. They violate the principles of independence, impartiality, and equality under the Arbitration and Conciliation Act, 1996. Courts will step in under Section 11(6) to appoint an impartial arbitrator instead.

Question 2

Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

dhiraj.sharma@justicum.com · Accepted Answer

No. The Supreme Court has consistently held — in TRF Ltd. (2017), Perkins Eastman (2019), and most recently in Bhadra International (2026, Constitution Bench) — that unilateral appointment clauses are invalid. They violate the principles of independence, impartiality, and equality under the Arbitration and Conciliation Act, 1996. Courts will step in under Section 11(6) to appoint an impartial arbitrator instead.

Question 3

Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

dhiraj.sharma@justicum.com · Accepted Answer

No. The Supreme Court has consistently held — in TRF Ltd. (2017), Perkins Eastman (2019), and most recently in Bhadra International (2026, Constitution Bench) — that unilateral appointment clauses are invalid. They violate the principles of independence, impartiality, and equality under the Arbitration and Conciliation Act, 1996. Courts will step in under Section 11(6) to appoint an impartial arbitrator instead.

Question 4

Is it necessary for MSMEs to opt for arbitration by the Micro and Small Enterprises Facilitation Council (MSEFC)?

dhiraj.sharma@justicum.com · Accepted Answer

No, it is not mandatory. Section 18(1) of the MSMED Act, 2006 states that any party may refer a dispute to the MSEFC. This means MSMEs have the option to use the Council for conciliation and arbitration, but they can also pursue other remedies such as civil courts or contractual arbitration. However, if a dispute is referred to the MSEFC, its process takes precedence and becomes binding under the Arbitration and Conciliation Act, 1996. [Pawwan Khanna vs Deepak Bagga-Del. HC. on 03-Jul-2026]

Question 5

Can an MSME go to civil court during a pending case with the MSME Facilitation Council?

dhiraj.sharma@justicum.com · Accepted Answer

No. once a dispute is referred to the MSEFC, civil courts cannot entertain parallel proceedings. The Council has exclusive jurisdiction, and any challenge must be made after its award under the Arbitration and Conciliation Act. [Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd. & Ors. (2022) 2 SCC 150]

Question 6

Can a buyer insist that an MSME must arbitrate as per the arbitration clause in the agreement if the MSME has already approached the MSME Facilitation Council (MSEFC)?

dhiraj.sharma@justicum.com · Accepted Answer

No. Once an MSME refers a dispute to the MSEFC under Section 18 of the MSMED Act, 2006, the Council’s process of conciliation and arbitration takes precedence. The Supreme Court in Gujarat State Civil Supplies Corp. Ltd. v. Mahakali Foods Pvt. Ltd. (2022) held that the MSMED Act overrides contractual arbitration clauses. This means the buyer cannot compel arbitration under the agreement while MSEFC proceedings are pending.

Question 7

Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

dhiraj.sharma@justicum.com · Accepted Answer

No. The Supreme Court has consistently held — in TRF Ltd. (2017), Perkins Eastman (2019), and most recently in Bhadra International (2026, Constitution Bench) — that unilateral appointment clauses are invalid. They violate the principles of independence, impartiality, and equality under the Arbitration and Conciliation Act, 1996. Courts will step in under Section 11(6) to appoint an impartial arbitrator instead.

Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

Is it necessary for MSMEs to opt for arbitration by the Micro and Small Enterprises Facilitation Council (MSEFC)?

Can an MSME go to civil court during a pending case with the MSME Facilitation Council?

Can a buyer insist that an MSME must arbitrate as per the arbitration clause in the agreement if the MSME has already approached the MSME Facilitation Council (MSEFC)?

Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

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