Arbitrator appointment rights lapse before court filing, and independence concerns can justify a neutral arbitrator.

Under Section 11(6) of the Arbitration and Conciliation Act, the respondent's contractual right to appoint an arbitrator is not lost merely because 30 days have passed, but it must be exercised before the court is approached. Where the earlier appointment process had already failed and no valid appointment was made before the application was filed, the appointment right stood forfeited. In assessing a fresh appointment, Section 11(8) requires due regard to the need for an independent and impartial arbitrator. On the record, a reasonable apprehension of lack of independence justified appointment of a neutral arbitrator instead of following the contractual procedure.

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Issues: Whether the respondents had forfeited their right to appoint an arbitrator after failure to act within time, and whether the circumstances justified appointment of an independent arbitrator instead of following the contractual appointment procedure.

Analysis: Under Section 11(6) of the Arbitration and Conciliation Act, 1996, the opposite party's right to appoint an arbitrator is not automatically lost on expiry of 30 days, but it must be exercised before the applicant moves the court. The earlier appointment process had already failed after termination of the first arbitrator's mandate, and the respondents did not make a valid appointment before the present application was filed. Further, Section 11(8) requires due regard to be had to the need for an independent and impartial arbitrator. The material on record showed a reasonable apprehension that an arbitrator drawn from the same governmental setup would not act with sufficient independence, particularly where the dispute involved the Ministry of Defence and the earlier conduct had already raised concerns of bias.

Conclusion: The respondents had forfeited the right to make the appointment before the filing of the application, and the circumstances warranted appointment of an independent arbitrator. The objection to appointment of a neutral arbitrator was rejected.

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