Arbitration clause in customs auction contracts binds the custodian, enabling appointment of an arbitrator despite privity objections.

An arbitrator may be appointed under Section 11(6) where auction terms for uncleared imported goods contain an arbitration clause and the dispute arises within a customs-regulated framework. The Madras HC treated the custodian as bound by the contractual terms applicable to its handling of the goods under Section 48 of the Customs Act and the relevant regulations. Objections based on privity, the custodian's asserted limited role, and stamp duty did not defeat invocation of the arbitration clause. Appointment of the arbitrator was therefore ordered.

---

---

Issues: Whether an arbitrator could be appointed under Section 11(6) of the Arbitration and Conciliation Act, 1996, in a dispute arising from auction of uncleared imported goods, and whether the first respondent was bound by the arbitration clause.

Analysis: The dispute arose from an auction conducted in the context of uncleared imported goods governed by customs law and the cargo-handling regulations. The auction terms contemplated reference of unresolved disputes to arbitration, and the first respondent, though contending that it was only a custodian, was held to be bound in the capacity in which it dealt with the goods under the customs regime. The Court accepted that the first respondent had power and obligations under Section 48 of the Customs Act, 1962, read with the relevant regulations, and that the arbitration clause could be invoked notwithstanding the objections raised regarding the contractual structure and stamp duty.

Conclusion: An arbitrator was appointed, and the petition for appointment under Section 11(6) succeeded.

Ratio Decidendi: Where the contractual terms governing disposal of uncleared imported goods provide for arbitration, and the custodian acts within a customs-regulated framework binding it to those terms, the existence of objections as to privity or the seller's role does not prevent appointment of an arbitrator under Section 11(6).

---