Case Note & Summary
The dispute arose between Ethiopian Airlines and STIC Travels regarding the appointment of arbitrators under an arbitration clause in their agreements. The respondent was appointed as the General Sales Agent for the appellant, and following the termination of this engagement, a suit was filed under Section 20 of the Arbitration Act, 1940 for the appointment of arbitrators. The Delhi High Court had previously appointed Justice Avadh Behari Rohatgi as the Chairman of the Arbitral Tribunal, which included Justice H.L. Anand and Mr. C.S. Aggarwal. The appellant contended that the arbitration clause fell under sub-section (1) of Section 10, which would classify the third arbitrator as an umpire, while the respondent argued for sub-section (2), allowing the third arbitrator to act as chairman. The Supreme Court analyzed the arbitration clause and the intentions of the parties, ultimately determining that the clause explicitly indicated a desire for a chairman, thus falling under sub-section (2). The court upheld the High Court's decision, affirming the composition of the Arbitral Tribunal and dismissing the appeal with costs.
Headnote
A) Arbitration Law - Interpretation of Arbitration Clause - Distinction between Umpire and Chairman - Arbitration Act, 1940, Section 10 - Court interpreted the arbitration clause to determine whether the appointment of the third arbitrator was as an umpire or as a chairman. It concluded that the clause indicated the intention of the parties to have a chairman, thus falling under sub-section (2) of Section 10. Held that the High Court's interpretation was correct (Paras 1-10).
Issue of Consideration
Whether the arbitration clause falls under sub-section (1) or sub-section (2) of Section 10 of the Arbitration Act, 1940.
Final Decision
The Supreme Court upheld the Delhi High Court's decision, affirming the composition of the Arbitral Tribunal with Justice Avadh Behari Rohatgi as Chairman, and concluded that the arbitration clause fell under sub-section (2) of Section 10 of the Arbitration Act, 1940. The appeal was dismissed with costs.
Law Points
- Arbitration
- interpretation of arbitration clause
- Section 10 Arbitration Act
- 1940
- appointment of arbitrators
- umpire vs chairman
- majority decision
