Case Note & Summary
The petitioner, M/s. Reliance Webstore Pvt. Ltd., filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award dated 26th January 2012 passed by a learned arbitrator in favor of the respondent, Pushpam Communications. The dispute arose from a notice dated 15th November 2009, wherein the respondent suggested the name of Justice P.V. Kakade (Retd.) as arbitrator and called upon the petitioner to agree. The petitioner did not agree to the suggested name. Despite the lack of consent, the arbitrator proceeded on the presumption that he was appointed by consent of both parties. The petitioner raised an objection before the arbitrator regarding his jurisdiction, arguing that he was unilaterally appointed by the respondent. The petitioner contended that since no consent was given, the only remedy for the respondent was to file an application under Section 11(6) of the Act before the Chief Justice for appointment of an arbitrator. Instead, the respondent proceeded with the arbitration before the unilaterally appointed arbitrator. The court agreed with the petitioner, holding that an arbitrator must be appointed by consent of both parties, and in the absence of consent, the only remedy is to seek appointment under Section 11(6). Since no such application was filed, the arbitrator lacked jurisdiction. Consequently, the court set aside the award and allowed the petition.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Consent Requirement - Section 11(6) of the Arbitration and Conciliation Act, 1996 - The court held that an arbitrator must be appointed by consent of both parties. In the absence of consent, the only remedy is to file an application under Section 11(6) before the Chief Justice for appointment. Since the respondent unilaterally appointed the arbitrator without the petitioner's consent and no Section 11(6) application was filed, the arbitrator lacked jurisdiction. The award was set aside. (Paras 4-5)
Issue of Consideration
Whether an arbitrator appointed unilaterally by one party without the consent of the other party has jurisdiction to act as an arbitrator under the Arbitration and Conciliation Act, 1996.
Final Decision
The court allowed the petition and set aside the arbitral award dated 26th January 2012.
Law Points
- Arbitrator must be appointed by consent of both parties
- unilateral appointment invalid
- Section 11(6) application required for appointment in absence of consent
Case Details
2013 LawText (BOM) (02) 49
Arbitration Petition No.577 of 2012
Mr. Premlal Krishnan i/b. Dave & Co., for the Petitioner; Mr. Simil Purohit i/b. Innus Shaikh, for the Respondent
M/s. Reliance Webstore Pvt. Ltd.
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Nature of Litigation
Petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award.
Remedy Sought
Petitioner sought to set aside the arbitral award dated 26th January 2012.
Filing Reason
Petitioner challenged the award on the ground that the arbitrator was unilaterally appointed by the respondent without the petitioner's consent, thus lacking jurisdiction.
Previous Decisions
The learned arbitrator passed an award dated 26th January 2012 allowing some claims of the respondent.
Issues
Whether the arbitrator appointed unilaterally by the respondent without the petitioner's consent had jurisdiction to act as arbitrator.
Whether the award is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Submissions/Arguments
Petitioner argued that since it did not consent to the arbitrator suggested by the respondent, the arbitrator could not act and the respondent should have filed an application under Section 11(6) for appointment.
Respondent proceeded with arbitration before the unilaterally appointed arbitrator without filing a Section 11(6) application.
Ratio Decidendi
An arbitrator must be appointed by consent of both parties. In the absence of consent, the only remedy is to file an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 before the Chief Justice for appointment. Since the respondent unilaterally appointed the arbitrator without the petitioner's consent and no Section 11(6) application was filed, the arbitrator lacked jurisdiction, and the award is liable to be set aside.
Judgment Excerpts
In my view, the Arbitrator should have been appointed by consent of both the parties and in absence of consent of any of the parties, the only remedy is to get the Arbitrator appointed by filing application under Section 11(6) of the said Act before the Hon'ble the Chief Justice.
Procedural History
The respondent suggested an arbitrator by notice dated 15th November 2009. The petitioner did not consent. The arbitrator proceeded and passed an award on 26th January 2012. The petitioner filed this petition under Section 34 challenging the award.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11(6), Section 34
