Though it is your choice whether or not to agree to such arbitration clause, but generally speaking such type of arbitration clause may not be fair to you. Since the company has full discretion and full power to appoint the only or sole arbitrator, the possibility of the company appointing some person as arbitrator who would favour the company, cannot be ruled out. Once there is an arbitration clause, you will not be able to approach the regular civil court to resolve any future dispute, and if the arbitrator is also not an impartial and neutral person, it may mean that the dispute resolution may not be impartial.
Usually, the arbitration clause should be such that both parties to the dispute would appoint one arbitrator each and then the two arbitrators would appoint a third arbitrator. If a sole arbitrator is to be appointed, then it should be with the mutual consent of both parties.
Therefore, it is up to you to decide whether you would like to agree to such arbitration clause which may not be fair to you. It also depends on the nature of the contract / agreement, how valuable the contract is to you is, how much are the chances of a dispute arising in future, and also whether you can insist with the company for changing the arbitration clause without losing the business deal with it.
Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.
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