Delhi High Court Upholds Institutional Arbitration Rules Requiring Use of Broad Based SAROD Arbitrator Panel - 2025-08-29

Delhi High Court Upholds Institutional Arbitration Rules Requiring Use of Broad Based SAROD Arbitrator Panel

The High Court of Delhi, in a recent judgment delivered by Justice Jasmeet Singh, has reaffirmed the sanctity of institutional arbitration frameworks. The court ruled that when parties enter into an agreement that incorporates the rules of the Society for Affordable Redressal of Disputes (SAROD), they are bound to follow the procedural requirements, including the mandatory selection of arbitrators from the society’s established panel.

Case Background

The dispute arose between M/s. KNR Tirumala Infra Pvt. Ltd. and the National Highways Authority of India (NHAI) concerning a Hybrid Annuity Mode agreement for the six-laning of NH-140. After conciliation failed, the petitioner sought to appoint an arbitrator of its own choosing, outside the panel maintained by SAROD. The petitioner argued that compelling them to select from a curated list violated the principles of party autonomy and neutrality. The respondent maintained that the agreement explicitly mandated the use of SAROD rules, which require the appointment of arbitrators from its panel.

Arguments Presented

The petitioner argued that restricting the choice of an arbitrator to a panel, particularly one it deemed not broad-based, fettered their freedom of choice and cited the Supreme Court judgment in Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV) . Conversely, NHAI submitted that the SAROD panel is diverse, broad-based, and independent, and that the petitioner had previously consented to the arbitration procedure. NHAI further emphasized that SAROD functions as an independent institution, not subject to their direct control.

Legal Analysis

The High Court distinguished this case from previous precedents, noting that unlike scenarios where one party maintains dominant control over a panel, the SAROD framework is governed by independent rules and includes a balanced representation of experts. Justice Singh held that once parties consciously agree to submit to an arbitral institution, they cannot selectively disregard procedural rules. The court noted that the SAROD panel, which includes former judges and subject matter experts, ensures the independence and impartiality necessary for fair arbitration.

Key Observations

• "Once the petitioner has agreed to arbitration under SAROD Rules, it must adhere to the appointment procedure in its entirety. Party autonomy does not extend to selectively applying institutional rules while discarding others."
• "The SAROD panel is not curated by NHAI... it is a broad-based and independent panel comprising former Judges of the Supreme Court and various High Courts, retired Bureaucrats, [and] senior engineers."
• "Allowing a party to disregard the institutional framework and nominate an arbitrator of its own choice... would defeat the rationale of institutional arbitration."

Court’s Decision

The High Court dismissed the petition, directing the parties to appoint their arbitrators from the SAROD-maintained panel. The ruling reinforces that institutional arbitration is a neutral mechanism intended to streamline dispute resolution. By upholding the necessity of following the specified rules, the court has provided clarity for contractors and government entities involved in public infrastructure projects, emphasizing that contractual commitments to specific arbitral forums must be respected to maintain the efficiency and integrity of the process.