Case Note & Summary
The applicant, Inspira IT Products Pvt. Ltd., filed an application under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996, seeking appointment of a substitute arbitrator. The background is that this Court (K.R.Shriram, J.) by an order dated 12 February 2018 in Company Petition No.422 of 2016 appointed Ms. Manjiri Shah, Advocate, as sole arbitrator by consent of the parties. The arbitrator entered reference, and the applicant filed its statement of claim on 4 April 2018, while the respondent filed its statement of defence on 6 September 2018. During the proceedings, the respondent also filed an application for an interim award seeking rejection of the claim on limitation grounds. However, the learned sole arbitrator resigned. The applicant then filed the present application for appointment of a substitute arbitrator. The respondent opposed the application, arguing that the court should not appoint a substitute arbitrator and that the parties should be relegated to the arbitration agreement. The court considered the provisions of Sections 14 and 15 of the Act. Section 14 deals with termination of the arbitrator's mandate, and Section 15 provides for appointment of a substitute arbitrator. The court noted that upon resignation, the mandate of the arbitrator terminates. The court held that since the arbitrator was appointed by this Court, this Court has the power to appoint a substitute arbitrator under Section 15(2) of the Act. The court rejected the respondent's contention that the parties should be relegated to the arbitration agreement, as the original appointment was by the court and not by the parties. The court allowed the application and appointed Mr. Shailesh Shah, Advocate, as the substitute sole arbitrator to continue the proceedings from the stage already reached. The court directed the arbitrator to make necessary disclosures under Section 11(8) read with Section 12(1) of the Act and to fix fees in consultation with the parties. The court also directed that the fees and expenses be shared equally between the parties.
Headnote
A) Arbitration - Termination of Arbitrator's Mandate - Resignation - Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 - The sole arbitrator appointed by the court resigned after entering reference. The court held that the mandate of the arbitrator terminates upon resignation and the court which originally appointed the arbitrator has the power to appoint a substitute arbitrator under Section 15(2) of the Act. The court allowed the application and appointed a substitute arbitrator. (Paras 1-6)
Issue of Consideration
Whether upon resignation of the sole arbitrator appointed by the court, the court can appoint a substitute arbitrator under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996.
Final Decision
The court allowed the application and appointed Mr. Shailesh Shah, Advocate, as the substitute sole arbitrator to continue the proceedings from the stage already reached. The arbitrator was directed to make necessary disclosures under Section 11(8) read with Section 12(1) of the Act and to fix fees in consultation with the parties. Fees and expenses to be shared equally between the parties.
Law Points
- Termination of arbitrator's mandate upon resignation
- Appointment of substitute arbitrator by same court
- Sections 14 and 15 of Arbitration and Conciliation Act
- 1996
