High Court of Judicature at Bombay Appoints Sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 in a Commercial Contract Dispute. Appointment Made after Respondent Failed to Prove Valid Appointment of Arbitrator Despite Alleged Forfeiture of Right.

Application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of a sole arbitrator

Applicant sought appointment of a sole arbitrator by the court

Respondent failed to appoint an arbitrator within 30 days of the notice invoking arbitration and before filing of the application, allegedly forfeiting its right

By order dated 22 September 2006, evidence was ordered to be recorded on commission; the Commissioner's report was taken on record by order dated 5 October 2007

Whether the Respondent had forfeited its right to appoint an arbitrator by failing to appoint within 30 days of the notice invoking arbitration and before filing of the application Whether the disputed correspondence constituted valid appointment of arbitrator, including whether communication of acceptance to the other party is necessary for completion of appointment Whether the Respondent proved the correspondence

Applicant argued that even assuming the disputed letters were proved, the appointment was not complete until communication of the arbitrator's acceptance to the other party, which occurred only in the affidavit-in-reply after filing, thus the Respondent forfeited its right Applicant contended that the correspondence was not proved and the Respondent failed to act within the stipulated time Respondent relied on the correspondence to show that an arbitrator was appointed before filing and within 30 days Respondent relied on Keshavsingh Dwarkadas v. Indian Engineering Company to argue that communication of the arbitrator's acceptance to the other party is not a prerequisite for a valid appointment

Under Section 11(6) of the Arbitration and Conciliation Act, 1996, if a party fails to act as required under the agreed appointment procedure or the appointed person fails to perform the function, the court may appoint an arbitrator. A party alleging appointment of an arbitrator must prove the appointment if disputed; failure to do so results in forfeiture of the right to appoint. Communication of the arbitrator's acceptance to the other party is not a prerequisite for a valid appointment, but the appointment itself must be proved.

I have come to the conclusion that the correspondence was not proved by the Respondent. The Respondent and its CMD having failed to appoint an arbitrator within thirty days from the receipt of the Petitioner's letter dated 29th March 2006 invoking arbitration and before the above application was filed, had forfeited its right to appoint an arbitrator. It is not necessary for me to consider these commentaries and judgments qua the second and third conditions in view of the judgments relied upon by Mr. Dwarkadas of a learned Single Judge of this Court in the case of Keshavsingh Dwarkadas Vs. Indian Engineering Company, AIR 1969 Bombay 227, which was affirmed by the Supreme Court in Keshavsingh Vs. Indian Engineering Company (1971) 2 SCC 706, which conclusively answer the questions against Mr. Khambatta.

Agreement dated 8 January 2003; disputes arose; Applicant's letter dated 29 March 2006 invoking arbitration and calling for appointment within 30 days; Respondent's advocate's letter dated 21 April 2006; Application filed on 3 May 2006; Respondent claimed appointment letters dated 24 April 2006, 2 May 2006, 8 May 2006, and 11 May 2006; Respondent's advocate's letter dated 17 May 2006 mentioning appointment; Affidavit-in-reply filed on 9 June 2006 disclosing correspondence; Order dated 22 September 2006 directing evidence on commission; Commissioner's report taken on record 5 October 2007; Judgment on 19 November 2010.

• Arbitration and Conciliation Act, 1996: Section 11(6)