Case Note & Summary
The case involved an application under Section 11(5) of the Arbitration and Conciliation Act, 1996, filed by a foreign company against an Indian company, seeking the appointment of an arbitrator to resolve disputes arising from agreements related to air transportation. The petitioner claimed that the respondent owed a substantial amount and had failed to remit payments as per their agreements. The petitioner alleged that the respondent had admitted liability in a letter but failed to pay, leading to the request for arbitration. The respondent countered that the agreements had ceased to exist and denied any liability. The court considered two main points: whether preliminary issues could be decided at this stage and whether an arbitrator of Indian nationality could be appointed. The court referenced previous judgments and clarified that the Chief Justice or his nominee could not decide preliminary issues at this stage, directing that the matter be referred to an arbitrator. Regarding the nationality of the arbitrator, the court concluded that it is not mandatory to appoint an arbitrator of a nationality different from that of the parties, especially when the foreign company expressed no objection to an Indian arbitrator. Consequently, the court appointed a retired judge as the sole arbitrator and directed that the remuneration and costs be fixed by the arbitrator after hearing both parties.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Nationality Considerations - Arbitration and Conciliation Act, 1996, Section 11(9) - The court held that it is not mandatory to appoint an arbitrator of a nationality different from that of the parties, especially when the foreign party has no objection to an Indian arbitrator. The court emphasized that the word 'may' in Section 11(9) does not impose a mandatory obligation, allowing for flexibility in arbitrator selection (Paras 13-14).
Issue of Consideration
Whether the Chief Justice of India must appoint an arbitrator of a nationality other than that of the parties in an international arbitration agreement.
Final Decision
The court appointed Sri Justice D.P. Wadhwa, retired Judge of the Supreme Court, as the sole arbitrator, directing that the remuneration and costs be fixed by the arbitrator after hearing both parties.
Law Points
- Arbitration
- Conciliation
- International Commercial Arbitration
- Appointment of Arbitrator
- Nationality of Arbitrator
