Case Note & Summary
The dispute arose from a contract for Military Engineering services awarded to the respondent, M/s. Talson Builders. After completing the contract work, the respondent submitted a final bill, certifying that it included all claims and constituted a full and final settlement. The respondent later sought the appointment of an arbitrator, which the appellants contested, asserting that there was no dispute due to the final settlement. The High Court appointed a retired judge as an arbitrator without addressing the objections raised by the appellants. The Supreme Court examined the High Court's decision and referenced a prior ruling that emphasized the necessity of considering objections regarding the existence of a dispute before appointing an arbitrator. The Court concluded that the High Court's failure to address these objections rendered the appointment vulnerable. Consequently, the Supreme Court set aside the High Court's order and directed it to reconsider the application for the appointment of an arbitrator in accordance with the law, expecting a resolution within three months. The appeal was allowed without costs.
Headnote
A) Arbitration - Appointment of Arbitrator - Validity of Appointment - Arbitration and Conciliation Act, 1996, Section 11(6) - High Court appointed an arbitrator without addressing objections regarding full and final settlement of claims. The Supreme Court held that the High Court should have resolved the objections before appointing an arbitrator, thus setting aside the appointment and remitting the matter for fresh consideration (Paras 4-5).
Issue of Consideration
Whether the High Court erred in appointing an arbitrator despite objections regarding the existence of a dispute due to full and final settlement.
Final Decision
The Supreme Court set aside the High Court's order appointing an arbitrator and remitted the matter for fresh consideration, directing the High Court to resolve the application for appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, preferably within three months.
Law Points
- Arbitration
- appointment of arbitrator
- full and final settlement
- dispute resolution
- Section 11(6) Arbitration and Conciliation Act
- 1996
