Uncertain arbitration clause and necessary party issue prevented referral of the suit claim to arbitration.

An arbitration clause that left the appointing authority blank was held vague and uncertain, so it could not be enforced under the statutory scheme for appointment of arbitrators. Reading the clause with Sections 10 and 11 of the Arbitration and Conciliation Act and Section 29 of the Contract Act, the Court found that the omission made the agreement incapable of certain application, and the default appointment mechanism did not cure the defect because it applies only where no appointment procedure has been agreed. The Court also held that a non-signatory party was a necessary and proper party to the suit, so the claim could not be referred to arbitration in its absence. The Section 8 application was rejected.

---

---

Issues: Whether the application under Section 8 of the Arbitration and Conciliation Act, 1996 could succeed for reference of the suit claim to arbitration when the arbitration clause left the appointing authority unspecified, and when the claim also involved a party who had not signed the lease agreements.

Analysis: The arbitration clause contemplated appointment of a sole arbitrator by an appointing authority, but the identity of that authority was left blank. The Court held that a clause may be enforced only if it can be made certain on the language used and the statutory scheme governing appointment of arbitrators. Reading the clause with Sections 10 and 11 of the Arbitration and Conciliation Act, 1996 and Section 29 of the Contract Act, the Court found that the omission rendered the clause vague and uncertain, and the default mechanism in Section 11(5) did not cure the defect because it applies where no appointment procedure has been agreed at all. The Court also held that the second petitioner, though not a signatory, was a necessary and proper party to the suit, and the plaintiff's claim could not be adjudicated in its absence. The objection based on production of copies of the arbitration agreement was rejected.

Conclusion: The arbitration clause was unenforceable in the form in which it stood, and the suit claim could not be referred to arbitration. The application under Section 8 was rightly rejected, and the petitioners were not entitled to the relief sought.

Ratio Decidendi: An arbitration agreement that leaves the appointing authority indeterminate and cannot be rendered certain from its terms is vague and unenforceable, and Section 8 relief cannot be granted on that basis.

---