Bona fide first application and valid arbitral appointment govern jurisdiction under arbitration law; unilateral sole arbitrator assumption failed.

Section 42 of the Arbitration and Conciliation Act does not oust jurisdiction unless the first Part I application is bona fide and made to a court of competent jurisdiction; an earlier Section 9 filing found to have been used to impair the opposing party's Section 34 remedy did not bar the present petition, so jurisdiction was upheld. The arbitration clause also required notice, a reasonable time to appoint, and recourse to the statutory appointment mechanism if the agreed procedure failed; unilateral assumption of sole arbitral authority by the first nominee, without valid compliance with that procedure, was contrary to the contract and Section 11, so the tribunal was held ly constituted and the award was set aside.

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Issues: (i) whether filing of an earlier application under Section 9 of the Arbitration and Conciliation Act, 1996 before another court barred the present petition under Section 42; (ii) whether the sole arbitrator was validly constituted in accordance with the arbitration clause and Section 11 of the Arbitration and Conciliation Act, 1996.

Issue (i): whether filing of an earlier application under Section 9 of the Arbitration and Conciliation Act, 1996 before another court barred the present petition under Section 42.

Analysis: Section 42 applies only when the first application under Part I is made to a court having jurisdiction. The earlier Section 9 application was filed without promptly informing the petitioner and was found to have been used to defeat the petitioner's remedy under Section 34, especially because limitation for challenging the award could expire before the petitioner learnt of it. The Court treated the earlier application as not bona fide for the purpose of ousting jurisdiction. The petition filed under Section 11 was held irrelevant to Section 42 because the authority under Section 11 was not a court of original civil jurisdiction within the meaning of Section 2(e).

Conclusion: the objection under Section 42 failed and the Court held that it had jurisdiction to entertain the petition.

Issue (ii): whether the sole arbitrator was validly constituted in accordance with the arbitration clause and Section 11 of the Arbitration and Conciliation Act, 1996.

Analysis: The arbitration clause required each party to nominate an arbitrator and contemplated the first party's nominee becoming sole arbitrator only after due notice and failure by the other party to appoint within a reasonable time. The respondent did not specify any time as reasonable in its notice. The Court further held that mere failure to appoint within thirty days did not automatically authorise the first nominee to assume jurisdiction as sole arbitrator. Under Section 11, where the agreed procedure fails, the remedy is recourse to the Chief Justice or his designate, not unilateral assumption of jurisdiction by one nominee. The arbitrator's act of proceeding as sole arbitrator was therefore contrary to the contract and the statute.

Conclusion: the constitution of the arbitral tribunal was illegal and the award was liable to be set aside.

Final Conclusion: the petition challenging the award succeeded because the jurisdictional objection was rejected and the award was invalidated on the ground that the sole arbitrator had no lawful authority to act as such.

Ratio Decidendi: an earlier Part I application will not oust the jurisdiction of another competent court under Section 42 unless it is a bona fide application, and an arbitrator cannot assume sole jurisdiction in breach of the agreed appointment procedure where the statute requires recourse to the appointing court or authority.

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