06 August 2026 | Arbitration & Commercial Law
In a noteworthy decision reinforcing the principles of contractual certainty and party autonomy, the Bombay High Court has held that unilateral appointments of arbitrators made before 23 October 2015 will remain legally valid, provided such appointments were expressly authorised under the arbitration agreement.
Justice Jitendra Jain observed that Section 12(5) of the Arbitration and Conciliation Act, 1996, inserted through the Arbitration and Conciliation (Amendment) Act, 2015, operates prospectively. Consequently, appointments that were valid under the law prevailing before the amendment cannot be invalidated merely because the legal position subsequently changed.
The Court, however, clarified that a unilateral appointment made without contractual authority or without the consent of the opposite party would not be legally sustainable.
Why This Ruling Matters
The judgment provides much-needed clarity for businesses and parties involved in legacy commercial contracts. It reaffirms that contractual rights and obligations must be assessed in light of the legal framework existing at the time they were created, thereby preserving the sanctity of arbitration agreements executed before the 2015 amendment.
EL Bharat Law LLP’s Perspective
This decision underscores the importance of carefully drafted arbitration clauses and the principle that statutory amendments should not unsettle vested contractual rights unless expressly intended by the legislature. While the ruling safeguards pre-2015 contractual appointments, businesses should review their existing arbitration clauses to ensure they align with the current legal framework and evolving judicial standards.
EL Bharat Law LLP
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