Case Note & Summary
The petitioners, Cabcom Cables Limited and others, filed a petition under section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award dated 14th January 2019 passed by a sole arbitrator. The award allowed the claims of the respondent, SBI Global Factors Limited, in a commercial dispute arising from an agreement between the parties. The petitioners argued that the appointment of the arbitrator was invalid because it was made by the respondent's advocate rather than by the respondent itself, relying on clause 23.1 of the agreement which allowed the respondent to appoint a sole arbitrator. They cited the Supreme Court judgment in TRF Ltd. v. Energo Engineering Projects Ltd. to support their contention that such an appointment was impermissible. The respondent contended that the appointment by the advocate was valid as the advocate acted on behalf of the respondent. The court examined the disclosure made by the arbitrator under section 11(8) of the Act and the submissions of both parties. The court held that the appointment by the advocate was valid because the advocate was not ineligible to act as an arbitrator, unlike the situation in TRF Ltd. where the appointing authority was itself ineligible. The court found no merit in the petition and dismissed it, upholding the arbitral award.
Headnote
A) Arbitration - Appointment of Arbitrator - Validity of Appointment by Advocate - Section 34, Arbitration and Conciliation Act, 1996 - The petitioners challenged the arbitral award on the ground that the arbitrator was appointed by the respondent's advocate and not by the respondent itself. The court held that the appointment by the advocate on behalf of the respondent is valid as the advocate acts as an agent of the party. The court distinguished the judgment in TRF Ltd. v. Energo Engineering Projects Ltd., noting that in that case the appointment was by a person who was ineligible, whereas here the advocate was not ineligible. The petition was dismissed. (Paras 1-5)
Issue of Consideration
Whether the appointment of the sole arbitrator by an advocate on behalf of the respondent (original claimant) under clause 23.1 of the agreement is valid and whether the arbitral award is liable to be set aside under section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision
The court dismissed the petition, holding that the appointment of the arbitrator by the respondent's advocate was valid and the arbitral award was not liable to be set aside.
Law Points
- Arbitration
- Appointment of Arbitrator
- Section 34
- Section 11(8)
- TRF Ltd. v. Energo Engineering Projects Ltd.
- Unilateral Appointment
- Advocate Appointment
