High Court of Karnataka Allows Petition Under Section 11(6) of Arbitration and Conciliation Act, 1996 for Appointment of Sole Arbitrator in Shareholder Dispute. Court Appoints Retired Judge as Arbitrator Due to Respondents' Failure to Appoint.

High Court: Karnataka High Court Bench: BENGALURU In Favour of Prosecution
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Case Note & Summary

The petitioner, Mr. Bhupinder Singh Chadha, filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitral tribunal to resolve disputes arising under a Shareholders Agreement dated 27/01/2014 entered into between the petitioner and respondent nos. 1, 2, and 3. The respondents failed to appoint an arbitrator despite notice. The High Court of Karnataka, presided over by Justice Suraj Govindaraj, held that since an arbitration clause exists in the agreement and the respondents did not appoint an arbitrator, the petitioner is entitled to the appointment. The court appointed Sri. Justice A.V. Chandrashekar (Retired Judge of this Court) as the sole arbitrator to adjudicate the disputes, with the arbitrator to fix his own fees and proceed in accordance with the Act. The petition was allowed.

Headnote

A) Arbitration Law - Appointment of Arbitrator - Section 11(6) Arbitration and Conciliation Act, 1996 - Existence of Arbitration Agreement - Petitioner sought appointment of sole arbitrator to adjudicate disputes under Shareholders Agreement dated 27/01/2014 - Respondents failed to appoint arbitrator despite notice - Court held that since arbitration clause exists and respondents did not appoint arbitrator, petitioner is entitled to appointment under Section 11(6) - Appointed Sri. Justice A.V. Chandrashekar (Retd.) as sole arbitrator (Paras 1-3).

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Issue of Consideration

Whether the petitioner is entitled to appointment of an arbitral tribunal under Section 11(6) of the Arbitration and Conciliation Act, 1996, given the existence of an arbitration clause in the Shareholders Agreement dated 27/01/2014 and the respondents' failure to appoint an arbitrator.

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Final Decision

The petition is allowed. Sri. Justice A.V. Chandrashekar (Retired Judge of this Court) is appointed as the sole arbitrator to adjudicate the disputes between the parties. The arbitrator shall fix his own fees and proceed in accordance with the Arbitration and Conciliation Act, 1996.

Law Points

  • Section 11(6) of Arbitration and Conciliation Act
  • 1996
  • Appointment of arbitrator
  • Existence of arbitration agreement
  • Failure to appoint arbitrator
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Case Details

2022 LawText (KAR) (09) 57

CMP No. 469 of 2022

2022-09-23

Suraj Govindaraj

Sri. Shashi Kiran Shetty, Ms. Latha S Shetty, Sri. Harish Kumar V.L., Sri. Pradeep Nayak, Sri. Nitya Kalyani

Mr. Bhupinder Singh Chadha @ B.S. Chadha

Primus Living Space Pvt Ltd, Sri. Satish P Chandra, Sri. Chetan Satish Chandra, M/S Amaryllis Health Care Pvt Ltd, T.M. Arun Kumar

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Nature of Litigation

Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitral tribunal.

Remedy Sought

Petitioner seeks appointment of a sole arbitrator to adjudicate disputes under the Shareholders Agreement dated 27/01/2014.

Filing Reason

Respondents failed to appoint an arbitrator despite existence of arbitration clause and notice.

Issues

Whether the petitioner is entitled to appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996?

Submissions/Arguments

Petitioner argued that there is an arbitration clause in the Shareholders Agreement and respondents failed to appoint arbitrator. Respondents did not oppose the appointment.

Ratio Decidendi

Where an arbitration agreement exists and the respondents fail to appoint an arbitrator despite notice, the court has jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint an arbitrator.

Judgment Excerpts

THE CMP IS FILED UNDER SEC.11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO EXERCISE ITS JURISDICTION AND POWER UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996 AND TO APPOINT AN ARBITRAL TRIBUNAL CONSISTING OF SOLE ARBITRATOR TO ADJUDICATE AND RESOLVE THE DISPUTES THAT HAVE ARISEN UNDER THE SHAREHOLDERS AGREEMENT DATED 27/01/2014 AS PER ANNEXURE-A BETWEEN THE PETITIONER AND THE RESPONDENT NO.1, 2 AND 3 AND ETC.

Procedural History

The petitioner filed CMP No. 469 of 2022 under Section 11(6) of the Arbitration and Conciliation Act, 1996. The matter came up for admission on 23rd September 2022, and the court made the order appointing the arbitrator.

Acts & Sections

  • Arbitration and Conciliation Act, 1996: Section 11(6)
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