Fresh arbitration after award set aside remains maintainable when the underlying contractual dispute is still unresolved.

Where an arbitral award is set aside and the underlying dispute remains unresolved, a fresh application for appointment of an arbitrator is maintainable under the Arbitration and Conciliation Act, 1996. The absence of an express liberty clause in the earlier Section 37 proceeding does not bar fresh arbitration when the merits have not been finally adjudicated and the dispute would otherwise remain without remedy. The court treated a quashed award as leaving the substantive controversy open and directed fresh appointment of an arbitrator so the contractual dispute could be decided anew.

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Issues: (i) Whether, in the absence of any liberty granted by the court while disposing of the earlier Section 37 proceeding, a fresh application for appointment of an arbitrator under Section 11(6)(C) of the Arbitration and Conciliation Act, 1996 was maintainable; (ii) whether, after the arbitral award had been quashed and the underlying dispute remained unresolved, the parties could be directed to have the dispute decided afresh by appointment of an arbitrator.

Issue (i): Whether, in the absence of any liberty granted by the court while disposing of the earlier Section 37 proceeding, a fresh application for appointment of an arbitrator under Section 11(6)(C) of the Arbitration and Conciliation Act, 1996 was maintainable.

Analysis: The earlier award had been set aside in appeal on the ground of non-compliance with the mandate of Section 24(1) of the Arbitration and Conciliation Act, 1996, and the dispute had not been adjudicated on the merits to finality. The Court relied on the settled principle that arbitration law does not permit a party to be left remediless and that, where an award is quashed, the parties are free to begin the arbitration again if they so desire. The absence of an express liberty clause in the earlier Section 37 order was held not to control the maintainability question when the dispute itself still remained undecided.

Conclusion: The fresh application under Section 11(6)(C) was held maintainable.

Issue (ii): Whether, after the arbitral award had been quashed and the underlying dispute remained unresolved, the parties could be directed to have the dispute decided afresh by appointment of an arbitrator.

Analysis: The Court treated the quashing of the award as leaving the substantive dispute open for adjudication. It applied the principle that the supervisory role of the court under the Arbitration and Conciliation Act, 1996 is limited to ensuring fairness and that, once an award is set aside, the underlying disputes require fresh determination in an appropriate proceeding. Since the contractual dispute had still not been conclusively resolved, a fresh reference to arbitration was considered necessary to avoid the dispute remaining in limbo.

Conclusion: A fresh arbitrator was directed to be appointed so that the dispute could be resolved afresh.

Final Conclusion: The application was allowed and the parties were referred to fresh arbitration for adjudication of the unresolved contractual dispute.

Ratio Decidendi: Where an arbitral award is set aside and the dispute remains unresolved, a fresh application for appointment of an arbitrator under the Arbitration and Conciliation Act, 1996 is maintainable, and the absence of an express liberty clause in the earlier proceeding does not bar fresh arbitration.

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