Who Can Be an Arbitrator? Can One Party Choose Alone?

The Arbitration Act gives the parties wide freedom to choose who decides their dispute. An arbitrator can be a retired judge, a lawyer, an engineer, an accountant, a businessperson, or anyone else the parties agree on, of any nationality. But that freedom has limits. The arbitrator must be independent and impartial, must disclose anything that might cast doubt on that, and cannot have certain close relationships with a party. And one side cannot simply pick the arbitrator by itself if it has an interest in the outcome.

This guide is for parties choosing an arbitrator, parties faced with an arbitrator chosen by the other side, and anyone with a contract that gives one party the power to appoint. In short: anyone can be an arbitrator if both sides agree and the person is independent; people listed in the Seventh Schedule, such as a party's employees and advisers, cannot act unless both sides waive this in writing after the dispute arises; and a party with an interest in the dispute cannot appoint a sole arbitrator alone.

At the end, we explain what to do if the other side has already appointed its own arbitrator.

The short answer

Section 11(1) of the Act says a person of any nationality may be an arbitrator, unless otherwise agreed by the parties. The parties are free to agree on a procedure for appointing the arbitrator or arbitrators, and on the qualifications they want, such as a retired judge or a chartered engineer.

But Section 12 imposes two safeguards. First, disclosure: when approached, a prospective arbitrator must disclose in writing any circumstances likely to give rise to justifiable doubts about independence or impartiality, and whether they can devote enough time to finish the arbitration in time. The Fifth Schedule lists the kinds of circumstances that may give rise to such doubts, and the disclosure is made in the form of the Sixth Schedule.

Second, ineligibility: under Section 12(5), any person whose relationship with the parties, counsel or subject matter falls within the Seventh Schedule is ineligible to be appointed, regardless of any prior agreement. The parties can waive this only by an express agreement in writing made after the dispute has arisen.

Who cannot act: the Seventh Schedule in brief

Can one party choose the arbitrator alone?

For many years, contracts often said that "the sole arbitrator shall be appointed by the Managing Director", "by the Chief Engineer", or "by the lender". Courts enforced these clauses. That changed in stages.

In TRF Ltd v Energo Engineering Projects (2017), the Supreme Court held that a person who is ineligible to act as arbitrator under Section 12(5), such as a party's managing director, cannot nominate someone else as arbitrator either. In Perkins Eastman Architects v HSCC (India) (2019), it went further: a party that has an interest in the outcome of the dispute cannot unilaterally appoint a sole arbitrator, because that party would always choose someone favourable. In Bharat Broadband Network v United Telecoms (2019), it held that if an ineligible person is appointed, the appointment is void, and waiver requires an express written agreement after the dispute, not just participation.

In November 2024, a five-judge bench in Central Organisation for Railway Electrification v ECI-SPIC-SMO-MCML confirmed and extended this. It held that unilateral appointment clauses in public-private contracts offend the principle of equal treatment in Section 18 and Article 14 of the Constitution, and that a party cannot force the other to choose its nominee from a narrow panel curated by the first party. The bench said its ruling applies prospectively to appointments made after the judgment, with particular reference to three-member tribunals.

In September 2026, in Arth Micro Finance v Shivalik Small Finance Bank, the Supreme Court refused to accept a lender's claim that the borrowers had consented to its chosen tribunal, in the absence of proof, declared the arbitration of no legal effect, set aside freezing orders, and appointed a new arbitrator.

What to do if the other side appoints alone

Appointment methods and how they stand

Disclosure: what arbitrators must tell you

Every arbitrator, when approached, must disclose in writing any past or present relationship with the parties or counsel, any interest in the dispute, any circumstances likely to give rise to justifiable doubts about independence or impartiality, and whether they have enough time to conduct the arbitration within the time limits. The Sixth Schedule sets out the form. The duty continues throughout the case: if new circumstances arise, the arbitrator must disclose them promptly.

Read the disclosure carefully. Ask questions if anything is unclear, such as how many times the arbitrator has been appointed by the other side or its lawyers. The Fifth Schedule lists situations that may give rise to doubts, such as an arbitrator who has been appointed more than twice by the same party in the past three years. These are not automatic bars, but they are grounds for a challenge under Section 13 if justified.

Choosing a good arbitrator

Beyond legal eligibility, a good arbitrator for your dispute has relevant experience, enough time, and a reputation for running cases efficiently and writing clear, reasoned awards. For a construction dispute, an arbitrator familiar with delay analysis and measurement disputes helps; for a shareholder dispute, one with corporate and valuation experience; for a loan dispute, one who understands banking practice and RBI rules.

Ask about availability. An excellent arbitrator who cannot give hearing dates for months will delay your case. Ask about fees at the outset, and whether they will follow the Fourth Schedule or an institution's schedule. If you are proposing names to the other side, propose two or three, so that it has a genuine choice; that also makes it easier to show a court later that you behaved reasonably.

Three-member tribunals and party-appointed arbitrators

In a three-member tribunal, each party usually appoints one arbitrator and the two choose a presiding arbitrator. A party-appointed arbitrator is not a representative of the party that appointed them. They must be just as independent and impartial as the presiding arbitrator, must make the same disclosures, and are subject to the same Seventh Schedule bars. An arbitrator who behaves as an advocate for the appointing party can be challenged.

The five-judge bench in CORE (2024) dealt with clauses in public sector contracts that required the contractor to choose its nominee from a panel of names prepared by the public body, while the body appointed its own nominee and controlled the presiding arbitrator. It held that such arrangements give one side effective control over the tribunal and offend equal treatment. Where a clause of this kind applies to an appointment made after the judgment, either party can object and ask the court to constitute the tribunal under Section 11.

A party-appointed arbitrator may properly understand the appointing party's position and ensure it is considered, but the decision must be based on the evidence and the law. Experienced arbitrators know this line well.

Former judges, retired officials and repeat arbitrators

Retired judges are frequently appointed and are generally treated as independent, unless they have a specific connection with a party. Retired officials of a government department or PSU raise a different question when appointed in disputes involving their former employer. A person who was an employee of a party within the past three years is within the Seventh Schedule's list, and some courts have held that a retired official of the same department can raise justifiable doubts even outside that period, depending on the facts.

Repeat appointments are also a concern. The Fifth Schedule lists, among the circumstances that may give rise to doubts, that the arbitrator has within the past three years been appointed as arbitrator on two or more occasions by one of the parties or an affiliate. This is not an automatic bar, but it is a ground for a challenge if it creates justifiable doubts. In loan arbitrations, where the same arbitrator may have been appointed by a lender in hundreds of cases, this point is often decisive.

If you are the party with the appointment power

If your standard contracts give your company, or one of its officers, the power to appoint the arbitrator, that power is unlikely to survive a challenge. Using it can lead to a Section 11 petition, an award set aside, or an award that cannot be executed, wasting the time and cost of the arbitration.

Safer alternatives include naming an institution and its rules, providing for the parties to agree on a sole arbitrator from a list of independent names with a fallback to the institution or court, or, for high-volume disputes such as consumer loans, using an independent online dispute resolution institution with a broad panel that the borrower can choose from. Update your standard terms, and for existing contracts, propose a neutral appointment when a dispute arises and record the other side's agreement in writing. See arbitration clause drafting.

Arbitrators in MSME council cases

Under Section 18 of the MSMED Act, the Facilitation Council itself, or an institution it nominates, acts as the arbitrator in delayed payment disputes. The parties do not choose. The Supreme Court in Gujarat State Civil Supplies v Mahakali Foods (2022) held that council members who conducted the conciliation can also act as arbitrators in the same dispute, despite the general rule in Section 80 of the Arbitration Act that a conciliator should not act as arbitrator. From 15 December 2026, under the MSMED (Amendment) Act, 2026, councils must have three to five members, including at least one with a legal background.

Online platforms and panels

Online dispute resolution platforms have grown quickly, especially for loan and consumer disputes. Many maintain panels of arbitrators and assign cases automatically or on request. These arrangements are lawful, but the same principles apply: the platform must be independent of the party that refers the case, the arbitrator must be independent and make disclosures, and the respondent must have a fair chance to object and to participate. A platform engaged and paid by one lender, assigning its own panelists without the borrower's real choice, may face the same objections as a one-sided appointment. See online arbitration.

The 15-day challenge procedure

If you have doubts about an arbitrator's independence or impartiality, Section 13 sets out the procedure, unless the parties agreed a different one. Within 15 days of becoming aware of the constitution of the tribunal or of the circumstances giving rise to the doubt, send a written statement of the reasons to the tribunal. Unless the arbitrator withdraws or the other party agrees to the challenge, the tribunal decides it.

If the challenge fails, the arbitration continues and the tribunal makes its award. You can then apply under Section 34 to set the award aside on that ground. The court will look at whether the doubts were justified. The 15-day limit matters; a party that knew of the circumstances and stayed silent may be taken to have accepted the arbitrator, as the Supreme Court indicated in several cases, including Gujarat Water Supply and Sewerage Board v Saryu Plastics (May 2026) on mandate objections.

For arbitrators who are legally ineligible under Section 12(5), the route is different: their mandate terminates automatically, and a party can apply to the court under Section 14 to decide on the termination. No 15-day limit applies to ineligibility, though acting promptly is always wise.

When both parties want a particular arbitrator

Sometimes both parties want to appoint someone who falls within the Seventh Schedule, for example a respected industry figure who has advised one side in the past. The Act allows this, but only through an express agreement in writing between the parties, made after the dispute has arisen, waiving the applicability of Section 12(5). A clause in the original contract saying the parties waive any objection is not enough.

If you are agreeing to such an appointment, make the waiver specific: name the arbitrator, state the relationship, and state that both parties waive the objection under Section 12(5) with full knowledge. Keep the signed document. This protects the award later.

Fees and availability as part of the choice

When choosing an arbitrator, ask about fees before appointment. After ONGC v Afcons (2024), fees should be agreed at the outset, either by reference to the Fourth Schedule, an institution's schedule, or a written agreement. An arbitrator who will not commit to fees at the start may lead to disputes later.

Ask about availability too. Section 12(1)(b) requires a prospective arbitrator to disclose circumstances likely to affect their ability to devote sufficient time to complete the arbitration within the time limits. An arbitrator with many pending cases may struggle to give dates. Ask how soon hearings can begin and how quickly awards are usually delivered.