Case Note & Summary
The dispute arose from a hire purchase agreement between the parties regarding the sale of machinery. The applicant, SAN-A Trading Co. Ltd., sought the appointment of an arbitrator after the initially named arbitrator, Mr. Manabu Nonoguchi, expressed his inability to act. The applicant claimed that the respondent, I.C. Textiles Ltd., failed to pay the agreed instalments and was liable to return the machinery. The respondent contended that it was a sick company under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and that the arbitration clause was exhausted upon the arbitrator's withdrawal. The court analyzed the provisions of the Arbitration and Conciliation Act, 1996, particularly Sections 11 and 15, and concluded that the arbitration clause remained valid as the agreement did not prohibit the appointment of a substitute arbitrator. The court noted that the named arbitrator later expressed willingness to act, leading to his reinstatement. The court appointed Mr. Nonoguchi as the arbitrator to adjudicate the disputes, emphasizing the importance of the parties' choice in selecting an arbitrator. The applications were disposed of accordingly.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Authority of Court to Appoint - Arbitration and Conciliation Act, 1996, Section 11 - The court held that the named arbitrator's refusal to act does not extinguish the arbitration clause, and the court can appoint a substitute arbitrator if the agreement does not explicitly prohibit it. The court found that the named arbitrator was willing to act, thus reinstating him as the arbitrator. (Paras 1-6).
Issue of Consideration
Whether the court can appoint an arbitrator when the named arbitrator has expressed inability to act, and the respondent is a sick company under SICA.
Final Decision
The court appointed Mr. Manabu Nonoguchi as the arbitrator to adjudicate the disputes between the parties, emphasizing that the arbitration clause remained valid.
Law Points
- Arbitration
- appointment of arbitrator
- sick company
- SICA
- Section 11
- Section 15
- Section 22
