Case Note & Summary
The dispute arose from an agreement between M/s. Premier Files Ltd. and the Union of India for piling work, which included a clause for dispute resolution through arbitration. After the completion of the work and payment of the final bill, disputes emerged, prompting the respondent to request the appointment of an Arbitrator. The Union of India appointed Shri O.P. Gaddhyan, who later resigned, leading the respondent to file an application in the High Court for a new Arbitrator. While this application was pending, the competent authority appointed another Arbitrator on July 14, 2006. The High Court, however, appointed a senior advocate as an Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996. The Union of India challenged this order, arguing that it violated the arbitration agreement's clause requiring the competent authority to appoint the Arbitrator. The Supreme Court agreed, noting that the competent authority had already appointed Shri S.C. Padhi as an Arbitrator before the High Court's order. The Court set aside the High Court's decision, reinstating the appointment of Shri S.C. Padhi and directing him to issue a reasoned award within six months. The appeal was allowed, and no costs were awarded.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Violation of Agreement Clause - Arbitration and Conciliation Act, 1996, Section 11(6) - The High Court appointed a lawyer Arbitrator despite an existing appointment by the competent authority, violating the arbitration agreement's clause requiring appointment by the competent authority. The Supreme Court set aside the High Court's order and restored the appointment of the previously designated Arbitrator, directing him to pass a reasoned award within six months (Paras 3-5).
Issue of Consideration
Whether the High Court's appointment of a lawyer Arbitrator violated the terms of the arbitration agreement.
Final Decision
The Supreme Court set aside the High Court's order appointing a lawyer Arbitrator and restored the appointment of Shri S.C. Padhi as the sole Arbitrator. The Court directed the Arbitrator to pass a reasoned award within six months from the communication of the order.
Law Points
- Arbitration Agreement
- Appointment of Arbitrator
- Section 11(6) Arbitration and Conciliation Act
- 1996
- Competent Authority
- Violation of Agreement Clause
