Case Note & Summary
The applicant, Pankaj Madaan, was employed by HealthAssure Private Limited as Chief Distribution Officer from July 1, 2021 to December 31, 2022. He alleged that his salary was delayed and eventually resigned, but his dues remained unpaid. The appointment letter contained an arbitration clause. After failed correspondence, the applicant filed a Section 9 petition, and the court directed the respondent to issue a relieving letter and Form 16, and later to deposit Rs. 9,18,648/- (salary amount). The applicant then filed this application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator, citing Section 11(6). The respondent objected, arguing that the application should have been under Section 11(5) and was thus not maintainable. The court rejected this objection, holding that the substance of the application was clear and no prejudice was caused. The court noted that the arbitration agreement did not specify the number of arbitrators, so under Section 10(2), a sole arbitrator was required. The respondent's suggestion for a three-member tribunal was baseless. The court found that the respondent was indulging in frivolous objections to delay arbitration, which had been invoked one and a half years ago. The court appointed a sole arbitrator to adjudicate the disputes, including salary and stock options. The court also warned that frivolous objections could lead to costs but did not impose costs as no court time was wasted.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Wrong Provision Cited - Section 11(5) and 11(6) of Arbitration and Conciliation Act, 1996 - The applicant cited Section 11(6) instead of Section 11(5) in the application for appointment of arbitrator. The court held that mentioning a wrong section is not fatal if the substance is clear and no prejudice is caused. The court appointed a sole arbitrator under Section 11(5) read with Section 10(2) of the Act. (Paras 17-19) B) Arbitration Law - Number of Arbitrators - Default Rule - Section 10(2) of Arbitration and Conciliation Act, 1996 - The arbitration agreement did not specify the number of arbitrators. The court held that under Section 10(2), the arbitral tribunal must comprise a sole arbitrator. The respondent's suggestion for a three-member tribunal was baseless. (Paras 12-13) C) Arbitration Law - Frivolous Objections - Delay Tactics - Section 11 of Arbitration and Conciliation Act, 1996 - The respondent raised frivolous objections to delay arbitration, including citing wrong provision and seeking time to file reply. The court deprecated such conduct and warned of costs, but refrained from imposing costs as no court time was wasted. (Paras 10-11, 16-18)
Issue of Consideration
Whether an application under Section 11 of the Arbitration and Conciliation Act, 1996 is maintainable when the applicant cited Section 11(6) instead of Section 11(5), and whether the court can appoint an arbitrator despite such technical defect.
Final Decision
The court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties. The court held that the wrong citation of Section 11(6) instead of Section 11(5) is not fatal as no prejudice was caused. The court also deprecated the respondent's frivolous objections and delay tactics.
Law Points
- Section 11(5) and 11(6) of Arbitration and Conciliation Act
- 1996
- Section 10(2) of Arbitration and Conciliation Act
- Wrong citation of provision not fatal if no prejudice
- Frivolous objections may lead to costs
