Supreme Court Overturns High Court Decision on Arbitrator Appointment

The Supreme Court set aside the High Court's rejection of the appellant's request for an arbitrator appointment, emphasizing the mutual agreement between parties on the appointment of a retired judge as the arbitrator. The Court directed the parties to proceed with arbitration under the agreed arbitrator, stressing the need for a prompt resolution to avoid additional costs.

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Issues:
1. Rejection of appellant's prayer for appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 by the High Court.
2. Interpretation of clauses related to Dispute Review Expert and arbitration agreement in the contract.
3. Disagreement on the existence of a valid arbitration agreement due to the absence of nomination of Dispute Review Expert.
4. Reference to previous court decisions regarding arbitration clauses in contracts.
5. Mutual agreement of parties on the appointment of an arbitrator.

Issue 1: Rejection of Appellant's Prayer for Appointment of an Arbitrator:
The appellant's appeal was directed against the High Court's order rejecting their prayer for the appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996. The High Court dismissed the request, citing the absence of an arbitration agreement as the basis for their decision.

Issue 2: Interpretation of Clauses Related to Dispute Review Expert and Arbitration Agreement:
The appellant relied on Clauses 24 and 25 of the Standard Bidding Document, which outlined the procedure for disputes and the appointment of a Dispute Review Expert. These clauses specified the process for resolving disputes and the subsequent arbitration procedure if needed.

Issue 3: Disagreement on the Existence of a Valid Arbitration Agreement:
The respondents contended that the absence of the nomination of a Dispute Review Expert invalidated any arbitration agreement. They highlighted a specific clause in the contract that stated arbitration shall not be a means of settling disputes, leading to a dispute over the existence of a valid arbitration agreement.

Issue 4: Reference to Previous Court Decisions:
The appellant's counsel referenced a previous court decision regarding arbitration clauses in contracts, emphasizing the importance of specific clauses and procedures for arbitration. The court distinguished the case relied upon by the appellant, indicating a need for clarity and specificity in arbitration-related clauses.

Issue 5: Mutual Agreement of Parties on the Appointment of an Arbitrator:
Following the parties' joint application, they mutually agreed on the appointment of a retired Honorable Judge of the Kerala High Court as the arbitrator. The Supreme Court, considering this mutual agreement, set aside the previous order and referred the matter to the agreed arbitrator, expecting a prompt conclusion of the arbitration proceedings.

In conclusion, the Supreme Court disposed of the appeals with the directive for the parties to negotiate and settle the terms and conditions of arbitration with the appointed arbitrator, Honorable Mr. Justice K. John Mathew (retired), emphasizing the importance of a swift resolution without additional costs incurred by either party.

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