Case Note & Summary
The Supreme Court addressed a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996, by a Malaysian company seeking the appointment of an arbitral tribunal to resolve disputes with an Indian company. The disputes arose from a subcontract related to a project awarded by Oil and Natural Gas Corporation Limited (ONGC) for offshore work. The petitioner claimed unpaid dues amounting to over $14 million and invoked the arbitration clause in February 2008. The respondent contested the invocation, suggesting that arbitration was premature and proposed a joint settlement mechanism. However, both parties eventually acknowledged the existence of arbitrable disputes. The core legal issue revolved around whether the arbitration should be conducted by a sole arbitrator or a panel of three arbitrators. The petitioner argued for a sole arbitrator based on the silence of the arbitration clause regarding the number of arbitrators, while the respondent contended that the clause implied a panel of three. The court analyzed the arbitration clause and relevant provisions of the Act, concluding that the absence of a specified number of arbitrators in the clause necessitated the appointment of a sole arbitrator under Section 10(2). The court appointed Justice D.P. Wadhwa as the sole arbitrator and directed him to resolve the dispute expeditiously, preferably within six months. The petition was allowed without costs.
Headnote
A) Arbitration Law - Composition of Arbitral Tribunal - Number of Arbitrators - Arbitration and Conciliation Act, 1996, Section 10 - The court held that in the absence of a clear determination of the number of arbitrators in the arbitration clause, the tribunal shall consist of a sole arbitrator as per Section 10(2) of the Act. The court emphasized that the silence in the arbitration clause regarding the number of arbitrators leads to the application of the statutory provision, thus appointing a sole arbitrator. (Paras 27-32).
Issue of Consideration
Whether the arbitration clause allows for a sole arbitrator or requires a panel of three arbitrators.
Final Decision
The court appointed Justice D.P. Wadhwa as the sole arbitrator and directed him to resolve the dispute within six months. The petition was allowed without costs.
Law Points
- Arbitration
- Sole Arbitrator
- Arbitration Clause
- UNCITRAL Rules
- Section 10 Arbitration and Conciliation Act
- 1996
