Case Note & Summary
The applicant, L.A. Motors Pvt. Ltd., filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator to resolve disputes arising from a Dealership Agreement dated 5th October 2006 and a Renewal Agreement dated 31st October 2012 with the respondent, Hyundai Motor India Ltd. The dealership agreement contained an arbitration clause (Clause 11) which provided that disputes would be referred to a sole arbitrator mutually agreed upon by the parties. Disputes arose, and on 10th March 2014, the applicant's advocate sent a notice invoking arbitration and proposing two names for appointment as sole arbitrator: Mr. Rahul Chitnis or Mr. Naushad Engineer. The respondent replied on 3rd April 2014, rejecting the proposal on the ground that the applicant had no right to nominate or appoint an arbitrator as it was contrary to the terms of the agreement. The respondent did not propose any alternative name. The applicant then filed the present application. The court examined the arbitration clause and noted that it required mutual agreement on the arbitrator. Since the respondent did not concur with the applicant's proposal, the condition for appointment under the clause was not fulfilled. The court held that it had the power under Section 11 to appoint an arbitrator in such circumstances. The court appointed a former judge of the Bombay High Court as the sole arbitrator to adjudicate the disputes between the parties. The court directed the arbitrator to file a disclosure under Section 12 of the Act and made the appointment subject to the arbitrator's consent.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of the Arbitration and Conciliation Act, 1996 - Failure to Concur - The applicant invoked arbitration clause and proposed names of arbitrators; respondent rejected the proposal contending it was contrary to the agreement. The court held that since the respondent did not concur with the applicant's proposal, the condition for appointment under the arbitration clause was not fulfilled, and the court could appoint an arbitrator under Section 11. The court appointed a former judge as sole arbitrator to adjudicate the disputes. (Paras 1-10)
Issue of Consideration
Whether the court can appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 when the respondent fails to concur with the applicant's proposal for appointment of a sole arbitrator.
Final Decision
The court allowed the application and appointed a former judge of the Bombay High Court as the sole arbitrator to adjudicate the disputes between the parties. The arbitrator was directed to file a disclosure under Section 12 of the Act, and the appointment was made subject to the arbitrator's consent.
Law Points
- Section 11 of the Arbitration and Conciliation Act
- 1996
- Appointment of arbitrator
- Existence of arbitration agreement
- Failure to concur on appointment
- Court's power to appoint
