Vague arbitration clause fails to create a valid agreement, so appointment of an arbitrator was declined.

A vague arbitration clause in a sale contract was held not to constitute a valid and enforceable arbitration agreement, because it referred disputes to arbitration under by-laws of the Indian Companies Act, 1956 without any shown by-laws and lacked a clear, workable mechanism. A later expression of willingness in a reply to a winding up petition was insufficient to cure the defect. As no valid arbitration agreement existed, appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 was declined.

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Issues: Whether the arbitration clause in the sale contract constituted a valid and enforceable arbitration agreement enabling appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Analysis: The clause referred disputes to arbitration under the by-laws of the Indian Companies Act, 1956, but no such by-laws were shown to exist. The wording of the clause was found to be vague, and the alleged willingness in a reply to a winding up petition was also insufficient to constitute a valid arbitration agreement. In the absence of a clear and workable arbitration clause, no arbitrator could be appointed under Section 11(6).

Conclusion: The arbitration clause was not enforceable as a valid arbitration agreement, and the request for appointment of an arbitrator was declined.

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