Neutral arbitrator requirement in international commercial arbitration led the Court to appoint a replacement acceptable to both sides.

In an international commercial arbitration involving an Indian and an American corporation, the Court held that the arbitrator should be of a nationality different from either party. After failed efforts to secure a consensual replacement and the earlier arbitrator's unwillingness to continue, the Court rejected referral to the International Chamber of Commerce at Paris as unnecessarily expensive. Accepting Dr Nasim Hasan Shah's consent, neutrality, and willingness to sit in Delhi on the stated remuneration, the Court appointed him as arbitrator under Section 11(5) read with Section 11(9) of the Arbitration and Conciliation Act, 1996.

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Issues: Whether, in an international commercial arbitration, an arbitrator of a nationality different from either party was required to be appointed and whether the Court should appoint Dr Nasim Hasan Shah in place of the earlier agreed arbitrator.

Analysis: The dispute was treated as one of international commercial arbitration. On that basis, the arbitrator was required to be neither Indian nor American, the parties having one Indian and one American corporation. Earlier efforts to secure a consensual appointment had failed, and the previously agreed arbitrator had expressed unwillingness to continue. The suggestion to refer the matter to the International Chamber of Commerce at Paris was rejected as unduly expensive. Dr Nasim Hasan Shah had consented to act, was acceptable as to nationality, and was willing to hold sittings in Delhi on the stated remuneration.

Conclusion: The application was allowed and Dr Nasim Hasan Shah was appointed as arbitrator under Section 11(5) read with Section 11(9) of the Arbitration and Conciliation Act, 1996.

Final Conclusion: The dispute was referred to arbitration through a neutral arbitrator chosen by the Court after the parties failed to agree on a replacement.

Ratio Decidendi: In an international commercial arbitration, where the parties cannot agree on a suitable arbitrator, the Court may appoint a neutral arbitrator of a nationality other than either party's nationality under Section 11 of the Arbitration and Conciliation Act, 1996.

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