Statutory arbitration under the SEZ Act excludes Section 11 appointment where the Act prescribes its own mechanism.

An application under Section 11 of the Arbitration and Conciliation Act, 1996 is not available where the dispute falls within the Special Economic Zones Act, 2005 and that Act itself prescribes the mode for reference to arbitration and appointment of the arbitrator. The SEZ scheme envisages designated courts for civil disputes under Section 23; failing such designation, Section 42 provides for arbitration and requires the Central Government to appoint the arbitrator under Section 42(2). Section 42(3) applies the 1996 Act only subject to the SEZ Act and after compliance with its statutory appointment mechanism, so the SEZ Act's appointment power cannot be displaced by Section 11.

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Issues: Whether an application under Section 11 of the Arbitration and Conciliation Act, 1996 was maintainable for appointment of an arbitrator when the dispute arose under the Special Economic Zones Act, 2005 and the statute itself provided the mechanism for reference to arbitration and appointment of the arbitrator.

Analysis: The special scheme under the Special Economic Zones Act, 2005 contemplates designated courts under Section 23 for civil disputes arising in a Special Economic Zone. In the absence of such designation, Section 42 provides for reference of disputes to arbitration, but the arbitrator is to be appointed by the Central Government under Section 42(2). Section 42(3) only makes the Arbitration and Conciliation Act, 1996 applicable to arbitrations conducted under the SEZ Act, subject to the Act itself and after the statutory mode of appointment is followed. The preconditions for invoking Section 11 of the Arbitration and Conciliation Act, 1996 were not satisfied, and the statutory power of appointment under the SEZ Act could not be displaced by resort to Section 11.

Conclusion: The application under Section 11 of the Arbitration and Conciliation Act, 1996 was not maintainable and was rejected.

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