Agreement of Reference to two arbitrators

Agreement of Reference to two arbitrators

The Arbitration and Conciliation (Amendment) Act, 2015 grants the liberty to the parties to appoint an arbitrator mutually. The Act provides that parties are free to determine the number of arbitrators which however, should not be an even number. Under Section 11(3) of the Indian Arbitration and Conciliation Act, 1996 the two arbitrators should appoint a third arbitrator who shall act as presiding arbitrator. However, such an appointment should preferably be made in the beginning, even though the two arbitrators may also appoint a 3rd arbitrator at a later stage, i.e. If and when they differ. This ensures that on a difference of opinion the arbitration proceedings are not frustrated. But if the two arbitrators agree and give a common award, there is no frustration of the proceedings. In such a case their common agreement would have prevailed, even if the 3rd arbitrator had differed.