Case Note & Summary
The applicant, Manish Gunwani, filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator. The arbitration agreement was contained in an employment contract dated 14 August 2007 between the applicant and the respondent, Lehman Brother Securities Pvt. Ltd. The arbitration clause provided that disputes would be resolved by binding arbitration in Mumbai pursuant to the Rules of Arbitration of the International Chamber of Commerce (ICC). The applicant invoked arbitration by a letter dated 3 November 2011. However, the respondent's reply revealed that the applicant had earlier invoked arbitration by a letter dated 16 February 2010, to which the respondent replied on 19 March 2010 stating that it would respond as per ICC Rules. The applicant suppressed these earlier communications. The court noted that under Section 11(6), recourse to the court is available only if a party fails to act as required under the agreed procedure, or if the parties or arbitrators fail to reach an agreement, or if an institution fails to perform its function. Since the parties had agreed to ICC Rules, the applicant should have first approached the ICC. There was no allegation that the ICC failed to act. Relying on The Iron and Steel Company Limited v. M/s. Tiwari Road Lines (AIR 2007 SC 2064), the court held that the application was premature and not maintainable. The court dismissed the application with no order as to costs.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) Arbitration and Conciliation Act, 1996 - Agreed Procedure - Where parties have agreed to arbitration under ICC Rules, the applicant must first invoke that procedure and demonstrate failure of the institution to act before approaching the court under Section 11(6). The court held that since the applicant suppressed earlier correspondence and did not show that the ICC failed to act, the application was not maintainable. (Paras 1-3)
Issue of Consideration
Whether an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 is maintainable when the parties have agreed to an institutional arbitration procedure under the ICC Rules and the applicant has not first taken recourse to that procedure.
Final Decision
The court dismissed the arbitration application with no order as to costs, holding that the applicant must first take recourse to the agreed procedure under the ICC Rules before approaching the court under Section 11(6).
Law Points
- Arbitration agreement
- Section 11(6) Arbitration and Conciliation Act
- 1996
- ICC Rules
- Agreed procedure
- Failure to act
- Exhaustion of remedy
