Case Note & Summary
The case involved an application under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of a sole arbitrator between MSA Nederland B.V., a company incorporated in the Netherlands, and M/s. Larsen & Toubro Ltd., an Indian company. The parties had entered into an agreement containing an arbitration clause, which specified that disputes would be resolved by a sole arbitrator, with arbitration to take place in England and conducted in English. Disputes arose regarding the appointment of the arbitrator, leading to the present application. The petitioner argued for the appointment of an arbitrator with a neutral nationality, citing Section 11(9) of the Act, which allows for such an appointment in international commercial arbitration. The court examined the language of Section 11(9), noting that the word 'may' conferred discretion upon the Chief Justice or his nominee, rather than imposing a mandatory requirement. The court referenced previous judgments, including Malaysian Airlines Systems BHD v. STIC Travels (P) Ltd. and Grid Corporation of Orissa Ltd. v. AES Corporation, which supported the interpretation that the provision was not obligatory. Consequently, the court appointed Mr. Justice S.N. Variava, a retired judge, as the sole arbitrator, leaving the determination of remuneration and costs to him. The petition was disposed of with directions for the Registry to forward the order to the appointed arbitrator.
Headnote
A) Arbitration Law - Appointment of Sole Arbitrator - Discretionary Power - Arbitration and Conciliation Act, 1996, Section 11(9) - The court clarified that the Chief Justice has discretion in appointing a sole arbitrator and is not bound to select an arbitrator of a nationality different from that of the parties. The use of 'may' in Section 11(9) indicates that it is not a mandatory requirement, allowing for flexibility in the appointment process. Held that the appointment of Mr. Justice S.N. Variava as sole arbitrator was valid (Paras 1-2).
Issue of Consideration
Whether the Chief Justice is mandated to appoint a sole arbitrator of a nationality other than that of the parties involved.
Final Decision
The court appointed Mr. Justice S.N. Variava as the sole arbitrator, determining that the requirement for a neutral nationality was not mandatory under Section 11(9) of the Arbitration and Conciliation Act, 1996.
Law Points
- Arbitration
- Sole Arbitrator Appointment
- Nationality of Arbitrator
- Discretionary Power of Chief Justice
