Landmark Judgment Law Insider (1)

Published on: 04 October 2022 at 18:05 IST

Court – Supreme Court of India

Citation – Babanrao Rajaram Pund v. Samarth Builders & Developers 2022 SCC OnLine SC 1165

Hon’ble Supreme Court of India has upheld that Lex Doctrine of Nemo Iudex In Causa Sua which stands for “No one should be a Judge in their own cause” in the arbitration adjudication. It is held that the Arbitration Clause where one party has a right to appoint its own Arbitrator is prima facie violative of the Article 14 of the Constitution of India and has repudiating effect to the public policy of India.

Para – 20

The above-reproduced clause was held to be invalid primarily due to the fact that the Managing Director, who was chosen to be the adjudicator-cum-arbitrator of the dispute(s) arising between the parties, was likely to be biased as he had an interest in the outcome of the case.

The principle that one cannot be a judge of his own cause was thus aptly applied to invalidate the subject clause. It was evidently not a case of an arbitral clause lacking essential ingredients of an arbitration agreement. In our opinion, this case renders no assistance to the Respondents.

Drafted by Abhijit Mishra

Key Words – Arbitration Agreement, Arbitration Clause.

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