Case Note & Summary
The applicant, M/s. Bhagheeratha Engineering Ltd., filed an application under section 11(6) read with section 15(2) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator on behalf of the respondent, M/s. Sesa Sterlite Limited (formerly Vedanta Alumina Ltd.), to act along with the arbitrator nominated by the applicant and to select the presiding arbitrator. The arbitration agreement was contained in a letter of intent dated 19th February, 2004. Disputes arose between the parties, and the applicant nominated an arbitrator. The respondent did not nominate any arbitrator. The applicant had previously filed Arbitration Application No.78 of 2012 under section 11(6) before the Chief Justice of the Bombay High Court. On 9th May, 2012, the learned designate of the Chief Justice observed that the arbitration agreement was in the letter of intent dated 19th February, 2003 (as recorded in the order), which provided for reference of disputes to arbitration. The order also noted that the respondent had terminated the contract by a letter dated 5th January, 2008, following which the applicant invoked arbitration on 10th April, 2008, and again by letter dated 4th April, 2011, with no response. The learned designate appointed a former judge of the Bombay High Court as nominee arbitrator on behalf of the respondent. However, the present application was filed because the respondent still failed to nominate an arbitrator. The court considered the application and, noting the respondent's failure to nominate, allowed the application and appointed an arbitrator on behalf of the respondent.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) read with Section 15(2) of the Arbitration and Conciliation Act, 1996 - Failure to Nominate - The applicant sought appointment of an arbitrator on behalf of the respondent as the respondent failed to nominate an arbitrator despite invocation of arbitration clause. The court held that since the respondent did not nominate an arbitrator, the court could appoint an arbitrator on its behalf under section 11(6) read with section 15(2) of the Act. (Paras 1-4)
Issue of Consideration
Whether the court can appoint an arbitrator on behalf of the respondent under section 11(6) read with section 15(2) of the Arbitration and Conciliation Act, 1996, when the respondent failed to nominate an arbitrator despite invocation of the arbitration clause.
Final Decision
The court allowed the application and appointed an arbitrator on behalf of the respondent to act along with the arbitrator nominated by the applicant and to select the presiding arbitrator.
Law Points
- Appointment of arbitrator under section 11(6) read with section 15(2) of the Arbitration and Conciliation Act
- 1996
- Failure to nominate arbitrator despite invocation
- Termination of contract does not extinguish arbitration clause
Case Details
2015 LawText (BOM) (07) 79
Arbitration Application No.352 of 2014
Mr. Vikram Shinde i/b Mr. Parul Sharma for the Applicant; Mr. Arif Bookwala, Senior Counsel with Ms. Jyoti Ghorpade for the Respondent
M/s. Bhagheeratha Engineering Ltd.
M/s. Sesa Sterlite Limited (Formerly known as M/s. Vedanta Alumina Ltd.)
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Nature of Litigation
Application under section 11(6) read with section 15(2) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator on behalf of the respondent.
Remedy Sought
The applicant sought appointment of an arbitrator on behalf of the respondent to act along with the arbitrator nominated by the applicant and to select the presiding arbitrator.
Filing Reason
The respondent failed to nominate an arbitrator despite invocation of the arbitration clause contained in the letter of intent dated 19th February, 2004.
Previous Decisions
Arbitration Application No.78 of 2012 was filed under section 11(6) before the Chief Justice of this Court. On 9th May, 2012, the learned designate of the Chief Justice observed that the arbitration agreement was contained in the letter of intent dated 19th February, 2003 (as per order) and appointed a former judge of this Court as nominee arbitrator on behalf of the respondent.
Issues
Whether the court can appoint an arbitrator on behalf of the respondent under section 11(6) read with section 15(2) of the Arbitration and Conciliation Act, 1996, when the respondent failed to nominate an arbitrator despite invocation of the arbitration clause.
Submissions/Arguments
The applicant submitted that the respondent did not nominate any arbitrator despite invocation of arbitration, and therefore the court should appoint an arbitrator on behalf of the respondent.
Ratio Decidendi
Under section 11(6) read with section 15(2) of the Arbitration and Conciliation Act, 1996, if a party fails to nominate an arbitrator despite invocation of the arbitration clause, the court may appoint an arbitrator on behalf of that party to constitute the arbitral tribunal.
Judgment Excerpts
By this application filed under section 11(6) read with 15(2) and 15(1) and (a) of the Arbitration & Conciliation Act, 1996 (for short 'the Arbitration Act'), the applicant seeks an appointment of the arbitrator on behalf of the respondent to act along with the arbitrator nominated by the applicant and to select the presiding arbitrator.
It is not in dispute that the arbitration agreement is recorded between the parties in the letter of intent dated 19th February, 2004.
Procedural History
The applicant filed Arbitration Application No.78 of 2012 under section 11(6) before the Chief Justice of this Court. On 9th May, 2012, the learned designate of the Chief Justice observed the arbitration agreement and appointed a former judge as nominee arbitrator on behalf of the respondent. Subsequently, the applicant filed the present Arbitration Application No.352 of 2014 seeking appointment of an arbitrator on behalf of the respondent.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11(6), Section 15(2), Section 15(1), Section 15(a)
