In Brief
Rajasthan Small Industries Corporation invited a tender and entered into a contract with the respondent contractor in 2000, with a clause requiring any disputes to be resolved by the Managing Director as arbitrator. After disputes arose, the Managing Director was appointed as arbitrator in 2009, but the proceedings stalled. In 2015, the contractor approached the High Court, which replaced the Managing Director with an independent retired District Judge. The Supreme Court held that parties must honor their arbitration agreement and that an employee arbitrator does not ipso facto lack independence. The Court set aside the High Court's order and reinstated the Managing Director as arbitrator, directing him to afford the parties fresh opportunity to present evidence before passing a final award within four months.
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