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        Companies Law

        2009 (7) TMI 1199 - SC - Companies Law

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        Arbitration clause silence on tribunal size defaults to a sole arbitrator absent clear agreement otherwise. Where an arbitration clause does not specify the number of arbitrators, Section 10(2) of the Arbitration and Conciliation Act, 1996 requires the tribunal ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              Arbitration clause silence on tribunal size defaults to a sole arbitrator absent clear agreement otherwise.

                              Where an arbitration clause does not specify the number of arbitrators, Section 10(2) of the Arbitration and Conciliation Act, 1996 requires the tribunal to consist of a sole arbitrator. The reference to "arbitrator(s)" in the clause's award-making provision did not amount to an agreement for a three-member tribunal, and reliance on UNCITRAL rules could not displace the statutory default. Party autonomy remains relevant, but only the agreement actually made governs; on these terms, no consensus for a three-member tribunal was shown, so the dispute had to proceed before a sole arbitrator.




                              Issues: Whether, where the arbitration clause did not specify the number of arbitrators but referred to arbitration under the Arbitration and Conciliation Act, 1996 and used the expression "arbitrator(s)", the dispute was required to be referred to a sole arbitrator or to a three-member tribunal.

                              Analysis: The arbitration clause was silent on the number of arbitrators. Under Section 10(2) of the Arbitration and Conciliation Act, 1996, where the parties fail to determine the number of arbitrators, the arbitral tribunal must consist of a sole arbitrator. The reference to "arbitrator(s)" in the clause dealing with the making of a reasoned award did not alter the absence of any agreed number. The reliance on UNCITRAL rules did not displace the statutory position, and the respondent's later policy decision could not override the contractual bargain. Party autonomy remained important, but on the terms of the agreement actually entered into, no agreement to a three-member tribunal was shown.

                              Conclusion: The dispute was required to be referred to a sole arbitrator, and not to a three-member tribunal.


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