Contractual arbitrator nomination survives ineligibility of the nominating party; court intervention was not warranted.

Contractual appointment procedure for a sole arbitrator remained effective where the parties had agreed a specific nomination mechanism in the purchase order. Recourse to court under Section 11(5) was held unavailable absent the statutory preconditions for court intervention, and the challenge on maintainability therefore failed. The managing director's ineligibility to act as arbitrator did not, by itself, extinguish his contractual power to nominate an independent arbitrator. Objections based on the Fifth, Sixth and Seventh Schedules were rejected, with the court treating tribunal-constitution objections as matters capable of being raised before the arbitral tribunal itself. The nominated arbitrator's appointment was upheld.

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Issues: (i) Whether the petition under Section 11(5) of the Arbitration and Conciliation Act, 1996 was maintainable where the contract itself provided a procedure for appointment of the sole arbitrator; (ii) Whether the managing director's right to nominate an arbitrator was lost because he himself was ineligible to act as arbitrator, and whether the appointment was vulnerable under the Fifth, Sixth and Seventh Schedules.

Issue (i): Whether the petition under Section 11(5) of the Arbitration and Conciliation Act, 1996 was maintainable where the contract itself provided a procedure for appointment of the sole arbitrator.

Analysis: The arbitration clause contained a specific mechanism for reference of disputes to a sole arbitrator nominated in accordance with the purchase order. Where the parties have agreed on a procedure for appointment, recourse to the court under Section 11(5) is not available unless the statutory preconditions are met. The court found that the contractual procedure governed the appointment and that the case did not disclose the contingencies required for exercise of power under Section 11(6).

Conclusion: The challenge to the appointment on the ground of maintainability under Section 11(5) failed.

Issue (ii): Whether the managing director's right to nominate an arbitrator was lost because he himself was ineligible to act as arbitrator, and whether the appointment was vulnerable under the Fifth, Sixth and Seventh Schedules.

Analysis: The court held that the bar on a person acting as arbitrator does not, by itself, extinguish that person's contractual power to nominate an independent arbitrator. The amended regime under Section 12(5) and the Seventh Schedule addresses ineligibility of the arbitrator himself, not the nominating authority. The Fifth Schedule was treated as indicative of circumstances giving rise to justifiable doubts, while disclosures under the Sixth Schedule had already been made. Objections to the constitution of the tribunal were held to be matters that could be raised before the arbitral tribunal itself.

Conclusion: The appointment of the nominated arbitrator was upheld and the objections based on the schedules were rejected.

Final Conclusion: The petition did not warrant court intervention in the arbitral appointment process, and the contractual nomination mechanism was left undisturbed.

Ratio Decidendi: A contractual procedure for appointment of a sole arbitrator remains effective despite the nominating party being disqualified from serving as arbitrator, because ineligibility to adjudicate does not necessarily extinguish the power to nominate an independent arbitrator.

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