In Brief
A Swiss design consultancy engaged in a dispute with Uttarakhand Vidyut Nigam Limited sought appointment of an arbitrator under Section 11(6) of the Arbitration Act, 1996. The contract's arbitration clause contained two contested conditions: a 7% pre-deposit of claims and empowerment of the Principal Secretary to appoint the sole arbitrator. The Supreme Court held both conditions invalid. It found the pre-deposit requirement arbitrary and violative of Article 14, as it impeded access to arbitration without nexus to preventing frivolous claims. The unilateral appointment power was deemed incompatible with mandated arbitrator neutrality and independence. Applying the doctrine of Grundnorm—that the Constitution supersedes all other laws—the Court ruled that fundamental rights cannot be waived by consent and directed appointment of an independent arbitrator.
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