Territorial jurisdiction for arbitrator appointment can lie where part of the cause of action arises, despite another forum's nexus.

Where an arbitration dispute has a territorial nexus with one High Court, that court may entertain a petition for appointment of an arbitrator even if another High Court also has a connection, because the appointing power under the Arbitration and Conciliation Act is linked to the court with jurisdiction over the subject matter. Once the claimant issues notice invoking the arbitration clause and the respondent does not appoint within the stipulated time, the statutory appointment mechanism operates and the court may appoint an arbitrator. Questions about withheld amounts or other merits of the dispute are for the arbitral tribunal, not for refusal at the appointment stage.

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Issues: (i) whether the High Court had jurisdiction to entertain an application for appointment of an arbitrator when part of the cause of action arose within its territorial limits and the dispute also had nexus with another High Court; (ii) whether an arbitrator could be appointed under the arbitration agreement when the respondent failed to make the appointment after notice.

Issue (i): whether the High Court had jurisdiction to entertain an application for appointment of an arbitrator when part of the cause of action arose within its territorial limits and the dispute also had nexus with another High Court.

Analysis: Section 11 of the Arbitration and Conciliation Act, 1996, read with Section 2(1)(e), ties the power to appoint an arbitrator to the High Court within whose jurisdiction the principal civil court would have jurisdiction over the subject-matter dispute. The Court held that where the cause of action arises partly within the territory of the Court and partly within another High Court's territory, the applicant may invoke the jurisdiction of the High Court where a part of the cause of action arose, and Section 11(11) controls only multiple requests made to different High Courts.

Conclusion: The High Court had jurisdiction to entertain the application.

Issue (ii): whether an arbitrator could be appointed under the arbitration agreement when the respondent failed to make the appointment after notice.

Analysis: The arbitration clause required appointment through the contractual procedure, and once the applicant issued notice invoking arbitration and the respondent failed to appoint an arbitrator within the prescribed time, the statutory mechanism under Section 11(5) and Section 11(6) became operative. The Court also held that disputes regarding the withheld amount were matters for the arbitral tribunal and not a reason to refuse appointment at the Section 11 stage.

Conclusion: An arbitrator could be appointed under the Act.

Final Conclusion: The application was maintainable and the dispute was referred to arbitration with an arbitrator appointed by the Court.

Ratio Decidendi: For appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, a High Court may exercise jurisdiction where part of the cause of action arose within its territorial limits, and once the agreed appointment procedure fails after notice, the Court may appoint the arbitrator without entering into the merits of the underlying contractual dispute.

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