TaxTMI 
TaxTMI 
1996 (11) TMI 301
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....greement made prior to the commencement of the New Act. Clause VII of the agreement dated 14-12-1993 between the parties is as under : "VII. In the event of any question or dispute arising under or out of or relating to the construction, meaning and operation or effect of this agreement or breach thereof, the matter in dispute shall be referred to arbitrator. Both the parties shall nominate one Arbitrator each and the arbitrators shall appoint an umpire before proceeding with the reference. The decision of arbitrators or in the event of their not agreeing the decision of the umpire will be final and binding on the parties. The provisions of the Indian Arbitration Act and Rules made thereunder shall apply for proceedings. The arbitrato....
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....r held that in the event of the MMTC Ltd. failing to name its arbitrator, the arbitrator appointed by Sterlite Industries (India) Ltd. would be the sole arbitrator under section 10(2) read with section 11(5) of the New Act. Time for appointment of the arbitrator was later, extended. The MMTC Ltd. has, in the meantime, appointed Shri S.N. Sapra, a former Judge of the Delhi High Court as its arbitrator. Hence this appeal by special leave. 4. The contention of the learned Attorney General on behalf of the appellant is that an arbitration agreement providing for the appointment of an even number of arbitrators is not a valid agreement because of section 10(1); and, therefore, the only remedy in such a case is by a suit and not by arbitration....
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....e New Act may now be referred. Section 2(b ) defines the 'arbitration agreement' to mean an agreement referred to in section 7. Section 7 deals with arbitration agreement, section 10 with the number of arbitrators and section 11 with the appointment of arbitrators. Sections 7, 10 and the relevant part of section 11 are as under : "7. Arbitration agreement.-(1) In this Part, 'arbitration agreement' means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An a....
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....t procedure in sub-section (3) applies and- (a)a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or (b)the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him. (5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or ....
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....e working of the arbitration agreement. It is, therefore, clear that an arbitration agreement specifying an even number of arbitrators cannot be a ground to render the arbitration agreement invalid under the New Act as contended by the learned Attorney General. 8. Section 10 deals with the number of arbitrators. Sub-section (1) says that the parties are free to determine the number of arbitrators, provided that such number shall not be an even number. Sub-section (2) then says that failing the determination referred to in sub-section (1), the Arbitral Tribunal shall consist of a sole arbitrator. Section 11 provides for appoint-ment of arbitrators. This is how Arbitral Tribunal is constituted. 9. The arbitration clause provides that ea....