Chief Justice's role under Section 11(6) of Arbitration Act is administrative with a duty to notify before arbitrator appointments

The SC held that the Chief Justice's function under Section 11(6) of the Arbitration and Conciliation Act, 1996 is purely administrative, not judicial or quasi-judicial, but subject to the duty to act fairly, requiring issuance of notice to affected parties before appointing arbitrators. The Arbitral Tribunal has jurisdiction to decide on its own jurisdiction under Section 16(1) and may continue proceedings if it asserts jurisdiction. Challenges to awards lie under Sections 34 or 37. Writ petitions under Article 226 are maintainable against the Chief Justice's administrative orders, but courts must exercise caution respecting the Act's provisions. Past appointments without notice remain valid; the requirement to issue notice applies prospectively only. The judgment clarifies and partially overrules prior rulings on the necessity of notice under the appointment scheme.

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ISSUES:

Nature of the function performed by the Chief Justice or his designate under Section 11(6) of the Arbitration and Conciliation Act, 1996-whether it is judicial, quasi-judicial, or purely administrative.Whether the Chief Justice or his designate has jurisdiction to decide preliminary or jurisdictional facts such as existence of an arbitration agreement, party status, and subsistence of a dispute before appointing an arbitrator under Section 11(6).Scope and effect of the finality clause under Section 11(7) on the decisions made by the Chief Justice or his designate.Whether the Chief Justice can designate a non-judicial institution or a person other than a judge to exercise powers under Section 11(6).Compatibility and interplay between Section 11 and Section 16 of the Act regarding jurisdictional rulings.Whether notice and opportunity of hearing are required to be given to the opposite party before the Chief Justice exercises power under Section 11(6).Extent of judicial review and remedies available against orders passed under Section 11(6) by the Chief Justice or his designate.Validity of prior appointments made under the previous interpretation of Section 11(6) and designation of District Judges to exercise the power.

RULINGS / HOLDINGS:

The power exercised by the Chief Justice or his designate under Section 11(6) is a judicial power, not a purely administrative function; it involves adjudication on preliminary matters affecting parties' rights.The Chief Justice or designated judge must decide preliminary or jurisdictional facts such as the existence of a valid arbitration agreement, whether the applicant is a party thereto, and whether the conditions for exercise of power under Section 11(6) exist, before appointing an arbitrator.Section 11(7) confers finality on the decision of the Chief Justice or designate on matters entrusted to them, including jurisdictional determinations, making such decisions binding and not subject to reopening before the arbitral tribunal.The Chief Justice may delegate the power under Section 11(6) only to another judge of the High Court or Supreme Court; designation of non-judicial institutions or district judges to exercise this power is not warranted under the Act's scheme.Section 16 empowers the arbitral tribunal to rule on its own jurisdiction, but this does not permit the tribunal to revisit the final decision of the Chief Justice under Section 11(7) regarding appointment and jurisdictional prerequisites.Notice and opportunity of hearing must be given to the opposite party before the Chief Justice or designate exercises power under Section 11(6), as the function affects rights and involves an adjudicatory process; thus, procedural fairness is required.Orders passed by the Chief Justice or designate under Section 11(6) are judicial orders; appeals lie only to the Supreme Court under Article 136 of the Constitution against High Court Chief Justice orders, and no appeal lies against the Chief Justice of India's orders.Appointments of arbitrators or tribunals made prior to this judgment based on the earlier view treating Section 11(6) functions as administrative are to be treated as valid; appointments made by designated District Judges are valid but pending matters before them shall be transferred to the Chief Justice or a designated judge.The earlier decision holding the function under Section 11(6) as purely administrative and not judicial is overruled.

RATIONALE:

The Court examined the statutory scheme of the Arbitration and Conciliation Act, 1996, particularly Sections 5, 7, 8, 9, 11, and 16, and the legislative intent to provide a fair, efficient arbitration process with minimal but effective judicial intervention.Section 11(6) requires the Chief Justice or designate to assess whether conditions for appointment exist, which is an adjudicatory act affecting parties' rights and cannot be reduced to a mere administrative function.The finality clause in Section 11(7) indicates legislative intent to make the Chief Justice's decision binding and not subject to reopening before the arbitral tribunal, distinguishing this from mere administrative acts.The designation power under Section 11(6) must be exercised within the judicial framework; non-judicial bodies cannot exercise judicial powers under Indian law, hence delegation is limited to judges only.Section 16's Kompetenz-Kompetenz principle allows the arbitral tribunal to rule on its jurisdiction but does not override the finality of the Chief Justice's jurisdictional decision under Section 11(7); this preserves coherence and avoids conflicting jurisdictional rulings.Natural justice and procedural fairness principles apply, requiring notice and hearing before the Chief Justice acts, given the adjudicatory nature of the function and its impact on rights.The Court rejected prior interpretations treating Section 11(6) functions as administrative to prevent misuse of judicial review and delay, but held that judicial review is limited and controlled, with appeals confined to the Supreme Court to ensure finality and expedition.The Court acknowledged the importance of the Chief Justice's constitutional status and judicial experience to ensure impartiality and credibility in arbitrator appointments, reinforcing the judicial character of the function.The decision harmonizes the Act's provisions by recognizing the dual roles: the Chief Justice's judicial role in appointment and jurisdiction, and the arbitral tribunal's competence to decide jurisdictional objections during proceedings, subject to statutory finality and remedies.The dissenting opinion emphasized the administrative nature of the function, relying on precedents and international practice, but the majority's view on judicial character and procedural fairness prevails.

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