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        Case ID :

        2015 (2) TMI 484 - HC - Indian Laws

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        Contractual arbitrator appointment default bars Section 11(6) relief where the agreement makes the invoking party's nominee sole arbitrator. A party that fails to nominate its arbitrator within the contractual time cannot invoke Section 11(6) to seek court appointment of another arbitrator when ...
                        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.

                              Contractual arbitrator appointment default bars Section 11(6) relief where the agreement makes the invoking party's nominee sole arbitrator.

                              A party that fails to nominate its arbitrator within the contractual time cannot invoke Section 11(6) to seek court appointment of another arbitrator when the agreement itself stipulates that, on default, the invoking party's nominee will act as sole arbitrator. The court held that the defaulting petitioner could not rely on Section 4 or on cases involving the other side's failure to act, because the petitioner had not complied with the agreed appointment procedure, including any extended time it sought. The respondent's nomination of the sole arbitrator under the contract was therefore valid, and no further judicial appointment could be made.




                              Issues: Whether the petitioner, having failed to nominate its arbitrator within the contractual time, could invoke Section 11(6) of the Arbitration and Conciliation Act, 1996 and seek appointment of a third arbitrator, and whether the respondent's nomination of a sole arbitrator under the contract was valid.

                              Analysis: The arbitration clause required each party to nominate one arbitrator within sixty days of receipt of the invocation notice, failing which the arbitrator appointed by the invoking party would become the sole arbitrator. The petitioner did not appoint its arbitrator within the stipulated period, and the record showed that even the extended time sought by the petitioner had expired before the nomination was effectively made. The respondent, acting under the contractual mechanism, appointed its nominee as sole arbitrator. A party that is itself in breach of the agreed appointment procedure cannot invoke Section 11(6) to seek relief against the other side, and the petitioner could not rely on cases where the aggrieved party approached the court after the other side's default. Section 4 of the Act also did not assist the petitioner because the petitioner had not complied with the time it had itself sought.

                              Conclusion: The petitioner was the defaulting party and could not maintain the Section 11(6) petition. The respondent's appointment of the sole arbitrator was valid, and the Court had no jurisdiction to appoint another arbitrator.

                              Final Conclusion: The contractual arbitral mechanism prevailed, and the petition failed for want of merit.

                              Ratio Decidendi: A party that fails to comply with the agreed procedure for appointment of arbitrators cannot invoke Section 11(6) to obtain court appointment, where the contract itself provides that the invoking party's nominee will act as sole arbitrator on such default.


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