Arbitrator appointment by court may depart from contract where the agreed mechanism becomes futile and arbitration is stalled.

Under Section 11(6) of the Arbitration and Conciliation Act, 1996, the court should ordinarily give effect to the contractual appointment mechanism for arbitrators, while Section 11(8) requires regard to the prescribed qualifications and related considerations. Departure from that mechanism is justified in exceptional cases where the agreed procedure has become ineffective or futile and would defeat the remedy of arbitration. Because the disputes had remained unresolved for nearly two decades, one reference had not commenced and the other had not resulted in an award, the High Court was justified in appointing a retired Chief Justice as an independent arbitrator outside the contractual panel.

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Issues: Whether the High Court could, under Section 11 of the Arbitration and Conciliation Act, 1996, depart from the contractual mechanism for appointment of arbitrators and appoint a retired Chief Justice as arbitrator in view of the prolonged and ineffective arbitration process.

Analysis: The contractual clauses contemplated a tribunal of Railway officers, but the governing law under Section 11(6) ordinarily requires the appointment procedure in the arbitration agreement to be given effect to, while Section 11(8) requires the appointing authority to keep the prescribed qualifications and other considerations in view. The established exceptions permit departure from the contractual mechanism in appropriate cases, particularly where the agreed procedure has become unworkable or would defeat the purpose of arbitration. Here, the disputes had remained unresolved for nearly two decades, one reference had not even commenced, and the other had not culminated in an award. In these circumstances, the agreed process had effectively become futile, justifying appointment of an independent arbitrator outside the contractual panel.

Conclusion: The High Court was justified in appointing the retired Chief Justice as arbitrator. The challenge to that appointment failed.

Ratio Decidendi: Under Section 11(6) of the Arbitration and Conciliation Act, 1996, the court should ordinarily respect the contractual appointment procedure, but it may depart from it and appoint an arbitrator in exceptional circumstances where the agreed mechanism has become ineffective or futile, and the delay in constitution or completion of arbitration defeats the remedy.

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