Case Note & Summary
The case involved an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator between Dolphin Drilling Ltd. and Oil and Natural Gas Corporation Ltd. The parties had entered into a charter hire agreement on October 17, 2003, which included an arbitration clause. The applicant claimed that despite the agreement's expiration on February 13, 2007, it continued providing services until April 10, 2007, for which it sought additional payments. The applicant invoked the arbitration clause on January 29, 2008, due to unpaid invoices, nominating a former Chief Justice of India as its arbitrator. The respondent acknowledged the arbitration provision but contended that the applicant had previously invoked the clause for a different dispute, arguing that the arbitration clause allowed for only a single invocation for all disputes under the agreement. The court analyzed the arbitration clause, particularly the phrase 'all disputes,' concluding that it permitted the invocation of arbitration for disputes arising after the initial invocation. The court recognized the financial burden of arbitration but stated that the clause did not limit arbitration to a one-time measure. Consequently, the court allowed the application, appointing the nominated arbitrator and directing the matter to proceed expeditiously. The petition was disposed of without costs.
Headnote
A) Arbitration Law - Invocation of Arbitration Clause - Repeated Invocation - Arbitration and Conciliation Act, 1996, Section 11 - The court held that the arbitration clause could be invoked for disputes arising after the initial invocation, as the clause did not limit arbitration to a one-time measure. The respondent's argument that all disputes must be referred at once was rejected, affirming the right to invoke arbitration for subsequent disputes (Paras 5-8).
Issue of Consideration
Whether the applicant could invoke the arbitration clause for a new dispute after having previously invoked it for a different dispute under the same agreement.
Final Decision
The application was allowed, appointing Justice S.P. Bharucha as the applicant's arbitrator and Justice Mrs. Sujata V. Manohar as the respondent's arbitrator, subject to her consent. The court directed the matter to proceed expeditiously and disposed of the petition without costs.
Law Points
- Arbitration agreement interpretation
- invocation of arbitration clause
- appointment of arbitrators
- financial burden of arbitration
