Court dismisses petition due to petitioner's failure to nominate Arbitrator on time. Respondent's nominee appointed sole Arbitrator.

The court dismissed the petition, ruling that the petitioner was in default for not nominating their Arbitrator within the agreed time frame. The respondent's appointment of their nominee as the sole Arbitrator was upheld. The court declined to appoint a Presiding Arbitrator or any other Arbitrator under Section 11(6) of the Act.

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Issues Involved:
1. Validity of the appointment of the petitioner's nominee Arbitrator.
2. Request for the Court to appoint a Presiding Arbitrator.
3. Validity of the respondent's notice appointing a sole Arbitrator.
4. Interpretation and adherence to the arbitration clause 39.2.
5. Application of Section 11(6) of the Arbitration and Conciliation Act, 1996.

Detailed Analysis:

1. Validity of the appointment of the petitioner's nominee Arbitrator:
The petitioner contended that they had nominated Justice K.S. Gupta (Retd.) as their Arbitrator within the extended time agreed upon by the respondent. However, the court found that the petitioner had failed to nominate their Arbitrator within the 60-day period stipulated by clause 39.2 of the arbitration agreement. The petitioner's request for an extension until 01.08.2014 was not formally agreed upon by the respondent, and even then, the petitioner did not appoint their Arbitrator by that date. The letter dated 02.08.2014, appointing the Arbitrator, was executed only on 07.08.2014, after the respondent had already appointed their Arbitrator as the sole Arbitrator on 06.08.2014. Therefore, the court concluded that the petitioner was in default and their nomination was invalid.

2. Request for the Court to appoint a Presiding Arbitrator:
The petitioner requested the court to appoint a Presiding Arbitrator since the two nominated Arbitrators could not reach a consensus. The court dismissed this request, stating that the petitioner, being the defaulting party, could not invoke Section 11(6) of the Act to appoint a Presiding Arbitrator. The court emphasized that the provisions under Section 11(6) can only be invoked against a defaulting party and not by one.

3. Validity of the respondent's notice appointing a sole Arbitrator:
The respondent invoked the arbitration clause and appointed Justice S.N. Aggarwal (Retd.) as their Arbitrator. When the petitioner failed to nominate their Arbitrator within the stipulated 60 days, the respondent appointed their nominee as the sole Arbitrator as per the second part of clause 39.2. The court upheld the respondent's action, stating that the respondent had acted in accordance with the agreed procedure under the arbitration clause.

4. Interpretation and adherence to the arbitration clause 39.2:
Clause 39.2 of the arbitration agreement required each party to nominate an Arbitrator within 60 days of receiving a notice invoking the arbitration clause. If a party failed to do so, the Arbitrator appointed by the other party would become the sole Arbitrator. The court found that the petitioner did not adhere to this procedure, as they failed to nominate their Arbitrator within the prescribed time frame. The court emphasized that the arbitration clause's procedure was binding and that the petitioner could not unilaterally alter the terms.

5. Application of Section 11(6) of the Arbitration and Conciliation Act, 1996:
The petitioner argued that their right to appoint an Arbitrator continued until an application under Section 11(6) was made. The court rejected this argument, distinguishing the present case from the precedent cited by the petitioner (Bharat Sanchar Nigam Limited vs. Dhanurdhar Champatiray). The court noted that in the cited case, the aggrieved party was not the defaulting party, unlike in the present case where the petitioner was in default. Therefore, the petitioner could not take advantage of their own default to invoke Section 11(6).

Conclusion:
The court dismissed the petition, holding that the petitioner was the defaulting party for failing to nominate their Arbitrator within the agreed time frame. Consequently, the respondent's appointment of their nominee as the sole Arbitrator was upheld, and the court declined to appoint a Presiding Arbitrator or any other Arbitrator under Section 11(6) of the Act.

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