Case Note & Summary
The applicant, Prakash Askram Jain, entered into a transport agreement with the Governor of Maharashtra on 30/03/2001 for transporting food grains and other commodities from 01/04/2001 to 31/05/2006. The contract was extended by two years until 31/05/2008. The applicant claimed entitlement to rates over and above 5% per year as per term no.3 of the agreement, seeking the difference between the agreed rates and the rates paid in other districts due to general increase. The District Supply Officer, Nandurbar, rejected this claim by communication dated 13/07/2009. The applicant then invoked the arbitration clause (clause 27) of the agreement. The Commissioner nominated the Additional Collector as the arbitrator. However, the applicant filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator by the court, alleging that the respondents failed to appoint an arbitrator within 30 days of the demand. The court noted that the respondents did not file any reply or opposition. The court held that the respondents' failure to appoint an arbitrator within 30 days constitutes a deemed failure, and the court has the power to appoint an arbitrator under Section 11(6). The court appointed a retired District Judge as the sole arbitrator to adjudicate the dispute.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) of the Arbitration and Conciliation Act, 1996 - Failure to Appoint - The applicant invoked the arbitration clause after a dispute arose regarding transport rates. The respondents failed to appoint an arbitrator within 30 days as required. The court held that the respondents' failure to appoint an arbitrator within the stipulated period constitutes a deemed failure, entitling the applicant to seek appointment from the court under Section 11(6). The court appointed a retired District Judge as the sole arbitrator. (Paras 1-5)
Issue of Consideration
Whether the applicant is entitled to appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, given the respondents' failure to appoint an arbitrator within 30 days of the demand.
Final Decision
The court allowed the application and appointed a retired District Judge as the sole arbitrator to adjudicate the dispute between the parties.
Law Points
- Arbitration clause
- appointment of arbitrator
- failure to appoint within 30 days
- Section 11(6) of Arbitration and Conciliation Act
- 1996
- deemed failure
- court's power to appoint
Case Details
2021 LawText (BOM) (07) 3
Arbitration Application No. 9 of 2021
Mr. G. K. Naik Thigle for the Petitioner, Mr. S. W. Munde, AGP for Respondents
The State of Maharashtra, The Divisional Commissioner, The District Collector, The District Supply Officer
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Nature of Litigation
Arbitration application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.
Remedy Sought
Appointment of an arbitrator by the court to adjudicate the dispute arising from a transport agreement.
Filing Reason
The respondents failed to appoint an arbitrator within 30 days of the applicant's demand, despite the existence of an arbitration clause.
Previous Decisions
The District Supply Officer rejected the applicant's claim for enhanced rates by communication dated 13/07/2009.
Issues
Whether the respondents' failure to appoint an arbitrator within 30 days of the demand entitles the applicant to seek appointment under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Submissions/Arguments
The applicant submitted that the contract was extended and he was entitled to rates over and above 5% per year as per term no.3, and the respondents failed to appoint an arbitrator within 30 days.
The respondents did not file any reply or opposition.
Ratio Decidendi
The failure of the respondents to appoint an arbitrator within 30 days of the demand constitutes a deemed failure, and the court has the power to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Judgment Excerpts
It is not in dispute, that an agreement for transport of food grains and other commodities come to be executed, between the applicant, and the Governor of Maharashtra, in pursuance to tenders, invited by the Collector, Nandurbar on 30/03/2001...
The respondents have not filed any reply. In view of the failure of the respondents to appoint an arbitrator within 30 days, the applicant is entitled to appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Procedural History
The applicant entered into a transport agreement on 30/03/2001. The contract was extended until 31/05/2008. The applicant's claim for enhanced rates was rejected on 13/07/2009. The applicant invoked the arbitration clause. The Commissioner nominated the Additional Collector as arbitrator. The applicant filed Arbitration Application No. 9 of 2021 under Section 11(6) of the Arbitration and Conciliation Act, 1996. The court reserved judgment on 16/07/2021 and pronounced on 23/07/2021.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11(6)
