2016 (3) TMI 1027 - SC - Indian Laws

Supreme Court appoints sole arbitrator under Arbitration Act

The Supreme Court appointed Hon'ble Mr. Justice H.S. Bedi as the sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, to ... Appointment of arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 - party-appointed arbitrators and default appointment mechanism - court's power to appoint arbitrator when a party fails to nominate - effect of non-appearance of respondent in Section 11 proceedingsAppointment of arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 - party-appointed arbitrators and default appointment mechanism - court's power to appoint arbitrator when a party fails to nominate - effect of non-appearance of respondent in Section 11 proceedings - Appointment of an arbitrator under the arbitration clause where the respondent failed to appoint an arbitrator and did not appear to contest the Section 11(6) petition. - HELD THAT: - The petition under Section 11(6) alleged that the respondent was called upon to name an arbitrator but failed to do so. In the absence of any counter-affidavit or appearance by the respondent, the petitioner's averments-supported by affidavit-are to be accepted for the limited purpose of deciding whether the matter should be referred to arbitration. Given the arbitration clause providing for party-appointed arbitrators and that the respondent did not make the required appointment, the Court exercised its power under the Arbitration Act to appoint an arbitrator. The Court appointed Hon'ble Mr. Justice H.S. Bedi, former Judge of the Supreme Court, as sole arbitrator, directed that he issue notices in connection with the arbitral proceedings and left determination of his fee to him. The Court expressly refrained from expressing any opinion on the merits, leaving merit issues open for the arbitrator. [Paras 3]Hon'ble Mr. Justice H.S. Bedi is appointed as sole Arbitrator to adjudicate the disputes; he shall issue notices and determine his fee; the Court expressed no opinion on the merits; no costs.Final Conclusion: Petition under Section 11(6) allowed; sole Arbitrator appointed to decide the disputes between the parties, with procedural directions as recorded and merits left open for the arbitrator. Issues:Appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 based on an arbitration clause in an Engagement Letter dated 24th October, 2013.Analysis:The petition before the Supreme Court was made under Section 11(6) of the Arbitration and Conciliation Act, 1996, as the respondent did not contest the appointment of an arbitrator as per the arbitration clause in the Engagement Letter dated 24th October, 2013. The arbitration clause specified that any disputes would be settled through arbitration in Mumbai, India, in accordance with the Arbitration Act. The petitioner had requested the respondent to name an arbitrator to adjudicate the disputes, but the respondent failed to do so, leading the petitioner to seek the appointment of an arbitrator from the Court.The Court considered the absence of any counter from the respondent and the supporting affidavit filed by the petitioner. Given the uncontested nature of the petition, the Court accepted the petitioner's averments as correct for the purpose of deciding on the appointment of an arbitrator. The Court found no reason to decline the petitioner's request for the appointment of an arbitrator and proceeded to appoint Hon'ble Mr. Justice H.S. Bedi, a former Judge of the Supreme Court of India, as the sole arbitrator to adjudicate on the disputes between the parties. The arbitrator was granted the authority to issue notices to the parties for the arbitral proceedings and determine his fee. The Court clarified that it had not expressed any opinion on the merits of the case, leaving this aspect open for the parties to present before the appointed arbitrator. No costs were awarded in this matter.