Case Note & Summary
The petitioner, Afcons Infrastructure Limited, entered into a contract with the respondent, Konkan Railway Corporation Limited, on 12 December 2005 for construction of tunnels. The contract contained an arbitration agreement under Clause 46.0 and Annexure P, which provided for a three-member arbitral tribunal to be constituted by the respondent sending a panel of names to the petitioner, who could suggest up to two names, and the respondent appointing at least one of them as the petitioner's nominee and the remaining arbitrators. Disputes arose between the parties, and the petitioner invoked arbitration on 30 October 2017. The respondent sent a panel of three names on 16 November 2017, from which the petitioner suggested two names on 30 November 2017. Despite repeated reminders on 12 December 2017, 15 January 2018, 12 February 2018, and 26 March 2018, the respondent failed to appoint any arbitrator. The petitioner then filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of a second arbitrator by the court. The respondent opposed the petition, arguing that the petitioner had not exhausted the agreed mechanism and that the petition was premature. The court analyzed the correspondence and found that the respondent had failed to act as per the agreed procedure for over a year, which constituted a failure of the mechanism. The court held that the respondent's inaction amounted to waiver of its right to appoint an arbitrator, and the petitioner was entitled to invoke Section 11(6). The court allowed the petition and appointed a former judge of the Bombay High Court as the second arbitrator, directing the respondent to bear the costs of the petition.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) of the Arbitration and Conciliation Act, 1996 - Failure of Mechanism - The petitioner sought appointment of a second arbitrator after the respondent failed to appoint its nominee despite repeated requests. The court held that the respondent's inaction constituted a failure of the agreed mechanism, entitling the petitioner to invoke Section 11(6) for appointment by the court. (Paras 1-10) B) Arbitration Law - Waiver of Right to Appoint - Section 11(6) of the Arbitration and Conciliation Act, 1996 - Inaction as Waiver - The respondent's failure to appoint an arbitrator for over a year despite reminders amounted to waiver of its right to appoint. The court found that the respondent had lost its right to appoint an arbitrator under the agreement. (Paras 8-10)
Issue of Consideration
Whether the petitioner is entitled to appointment of an arbitrator by the court under Section 11(6) of the Arbitration and Conciliation Act, 1996, when the respondent failed to appoint an arbitrator despite repeated requests and the agreed mechanism for appointment failed.
Final Decision
The petition is allowed. The court appoints a former judge of the Bombay High Court as the second arbitrator. The respondent shall bear the costs of the petition.
Law Points
- Section 11(6) of the Arbitration and Conciliation Act
- 1996
- Appointment of arbitrator by court when party fails to act as per agreed procedure
- Failure of mechanism under arbitration agreement
- Waiver of right to appoint arbitrator by inaction
