Case Note & Summary
The petition was filed by M/s Comed Chemicals Ltd. under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of a third arbitrator or a sole arbitrator due to a dispute with Dr. C.N. Ramchand. The petitioner, a company registered under the Indian Companies Act, 1956, had entered into a Memorandum of Understanding with the respondent for the development of bio-industrial products. The respondent was appointed as Director (Technical) but allegedly failed to fulfill his obligations, leading to his resignation and subsequent disputes over the arbitration clause in their agreement. The respondent contended that he was a British national, and thus the arbitration fell under international commercial arbitration, which should be adjudicated by the Chief Justice of India. The petitioner initially approached the High Court of Gujarat, but upon the respondent's objection, withdrew the application to file it in the Supreme Court. The court examined the nature of the relationship between the parties, determining that the respondent was not merely an employee but held a dual capacity as both an employee and a director, which involved commercial elements. The court concluded that the arbitration clause was valid and applicable, appointing a sole arbitrator to resolve the dispute. The decision emphasized the broad interpretation of commercial relationships under the Act, affirming the need for arbitration in this context.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Jurisdiction of Chief Justice - Section 11 Arbitration and Conciliation Act, 1996 - The court held that the application for appointment of an arbitrator was maintainable as the dispute was covered under international commercial arbitration due to the respondent being a British national. The court appointed a sole arbitrator to resolve the dispute as per the arbitration clause in the agreement (Paras 10-33).
Issue of Consideration
Whether the dispute between the parties falls under the provisions of the Arbitration and Conciliation Act, 1996 and whether the respondent was merely an employee or had a commercial relationship.
Final Decision
The court allowed the application, appointing Mr. Madhukar Fanse, retired Judge, City Civil Court, Ahmedabad as the sole arbitrator to resolve the dispute between the parties.
Law Points
- Arbitration
- International Commercial Arbitration
- Appointment of Arbitrator
- Arbitration Agreement
- Dual Capacity of Director
