Case Note & Summary
The Supreme Court of India addressed the procedural issues surrounding the appointment of arbitrators under Section 11 of the Arbitration and Conciliation Act, 1996. The appeals arose from the Calcutta High Court's handling of applications for the appointment of arbitrators, where it was alleged that the procedure followed was not sanctioned by law. The court noted that the Designate Judge had initially recognized the existence of an arbitral dispute but referred the matter for appointment of an arbitrator to the Chief Justice, leading to concerns about the legality of this two-tier process. The court emphasized that Section 11 mandates a singular judicial authority to consider the application in its entirety, thus rejecting the piecemeal approach adopted by the Calcutta High Court. The Supreme Court referred to its previous ruling in SBP & Co., which established that the power exercised under Section 11 is judicial and cannot be delegated to non-judicial bodies. Consequently, the court set aside the impugned orders and restored the arbitration petitions for appropriate consideration, while clarifying that any orders that had attained finality would remain unaffected. The decision underscored the importance of adhering to the statutory framework governing arbitration proceedings to ensure judicial integrity and efficiency.
Headnote
A) Arbitration Law - Appointment of Arbitrators - Judicial Authority in Appointment Process - Arbitration and Conciliation Act, 1996, Section 11 - The Supreme Court clarified that the procedure for appointing arbitrators under Section 11 must be handled in its entirety by either the Chief Justice or the Designate Judge, rejecting piecemeal consideration as legally impermissible. Held that the distinction made by the Calcutta High Court in Modi Korea Telecommunications Ltd. regarding appointment procedures was inconsistent with the Supreme Court's earlier ruling in SBP & Co. (Paras 17-18).
Issue of Consideration
Whether the procedure followed by the Calcutta High Court in considering applications under Section 11 of the Arbitration and Conciliation Act, 1996 was legally permissible.
Final Decision
The Supreme Court set aside the impugned orders and restored the arbitration petitions for appropriate consideration, clarifying that the procedure must be handled in its entirety by either the Chief Justice or the Designate Judge.
Law Points
- Arbitration procedure
- Section 11
- judicial power
- piecemeal consideration
- appointment of arbitrators
