Supreme Court Limits Scope of Enquiry in Arbitrator Appointments: A Landmark Verdict

The Supreme Court has clarified that the scope of enquiry during the appointment of arbitrators is limited to establishing the existence of an arbitration agreement. The judgement stated that courts are not to consider the merit of disputes. The ruling came from an appeal involving SBI General Insurance Co Ltd and a Gujarat-based firm over an insurance claim.

The Supreme Court has declared that enquiry scope during arbitrator appointments is strictly confined to determining the existence of an arbitration agreement, disregarding any other considerations, including the dispute's merits.

The ruling, crafted by Chief Justice D Y Chandrachud, Justices JB Pardiwala, and Manoj Misra, reinforces that courts are not to delve into claims or counterclaims of subject parties when appointing arbitrators.

This decision stemmed from SBI General Insurance Co Ltd's appeal challenging a Gujarat High Court's order to appoint an arbitrator for their dispute with Krish Spinning over insurance claims.

(With inputs from agencies.)