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        Companies Law

        2012 (5) TMI 102 - HC - Companies Law

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        Expiry of a time-bound sole arbitrator's mandate can end the appointment, yet leave the arbitration agreement intact for substitution. Where parties separately agree to arbitration and also appoint a named sole arbitrator with a fixed time to make the award, expiry of that time without an ...
                          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.

                                Expiry of a time-bound sole arbitrator's mandate can end the appointment, yet leave the arbitration agreement intact for substitution.

                                Where parties separately agree to arbitration and also appoint a named sole arbitrator with a fixed time to make the award, expiry of that time without an award terminates the named arbitrator's mandate if no consent is given for extension. That termination arises by operation of the parties' agreement and Section 15(1)(b) of the Arbitration and Conciliation Act, 1996. However, the arbitration agreement itself survives because the parties agreed to arbitration as the dispute resolution mechanism and did not confine it to the named individual alone. A substitute arbitrator may therefore be appointed under Section 11.




                                Issues: Whether, after expiry of the time fixed in the consent minutes for making the award by the named sole arbitrator, the arbitrator's mandate stood terminated and a fresh arbitrator could be appointed under Section 11 of the Arbitration and Conciliation Act, 1996.

                                Analysis: The consent minutes were structured in two distinct parts: one recording the parties' agreement to refer their disputes to arbitration, and the other appointing a named advocate as sole arbitrator with a stipulation that he would endeavour to make the award within six months of accepting the appointment. The fixed period expired without an award being delivered. Where the parties themselves have fixed the time for making the award, extension of time requires consent. In the absence of consent from the respondent, the mandate of the named arbitrator terminated by operation of agreement and Section 15(1)(b) of the Arbitration and Conciliation Act, 1996. That termination did not extinguish the arbitration agreement itself, because the parties had agreed to arbitration as a mode of dispute resolution and had not restricted arbitration to the named individual alone. The Court therefore retained jurisdiction to appoint a substitute arbitrator under Section 11.

                                Conclusion: The mandate of the earlier sole arbitrator had terminated, but the petitioner was entitled to seek appointment of a fresh arbitrator under Section 11.

                                Final Conclusion: The application for appointment of an arbitrator was allowed, and a new sole arbitrator was appointed to proceed with the reference.

                                Ratio Decidendi: Where parties have separately agreed to arbitrate and have also fixed a time-bound mandate for a named arbitrator, expiry of that mandate without consent for extension terminates the named arbitrator's authority, but does not terminate the arbitration agreement or bar appointment of a substitute arbitrator under Section 11.


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