Case Note & Summary
The petitioner, Anheuser Busch InBev India Limited, filed a Civil Miscellaneous Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of the remaining members of a three-member arbitral tribunal and constitution of the tribunal for reference of disputes arising out of a Brewing Agreement dated 06.02.2015. The respondents included East Godavari Breweries Private Limited, Scarp Marketing Private Limited, and individuals Satish Babu Sana, S.V. Bapuji, and S. Guruju. The arbitration clause (Clause 24.1) provided that each party would appoint one arbitrator, and the two appointed arbitrators would appoint the third arbitrator. The petitioner appointed its arbitrator, but the respondents' appointed arbitrator failed to take steps to appoint the third arbitrator, resulting in a deadlock. The petitioner approached the High Court under Section 11(6) to break the impasse. The court heard arguments from senior advocates representing both sides. The court analyzed the arbitration agreement and the failure of the appointment mechanism. It held that when the procedure agreed upon by the parties fails, the court has the power under Section 11(6) to appoint arbitrators to complete the constitution of the tribunal. The court appointed the remaining members of the arbitral tribunal and directed the constitution of the tribunal to proceed with the arbitration. The decision facilitated the resolution of disputes through arbitration as per the parties' agreement.
Headnote
A) Arbitration Law - Appointment of Arbitrators - Section 11(6) of the Arbitration and Conciliation Act, 1996 - Failure of Appointed Arbitrator - The petitioner sought appointment of remaining members of a three-member arbitral tribunal after the respondent's appointed arbitrator failed to constitute the tribunal. The court held that when the procedure agreed upon by the parties fails, the court may intervene under Section 11(6) to appoint arbitrators and complete the constitution of the tribunal. (Paras 1-10) B) Arbitration Law - Arbitration Agreement - Clause 24.1 of Brewing Agreement - The arbitration clause provided for a three-member tribunal with each party appointing one arbitrator and the two appointed arbitrators appointing the third. The court found that the respondent's arbitrator did not take steps to appoint the third arbitrator, leading to a failure of the appointment mechanism. (Paras 1-5) C) Arbitration Law - Court's Role - Section 11(6) of the Arbitration and Conciliation Act, 1996 - The court emphasized that its role under Section 11(6) is to facilitate the arbitration process and ensure the tribunal is constituted as per the parties' agreement. The court appointed the remaining arbitrators to break the deadlock. (Paras 6-10)
Issue of Consideration
Whether the High Court can appoint the remaining members of a three-member arbitral tribunal under Section 11(6) of the Arbitration and Conciliation Act, 1996 when the party-appointed arbitrator fails to constitute the tribunal as per the arbitration agreement.
Final Decision
The High Court allowed the petition and appointed the remaining members of the three-member arbitral tribunal, directing the constitution of the tribunal to proceed with the arbitration.
Law Points
- Section 11(6) of the Arbitration and Conciliation Act
- 1996 empowers the High Court to appoint arbitrators when the procedure agreed upon by the parties fails
- the court must ensure the arbitral tribunal is constituted in accordance with the arbitration agreement
- the court's role is to facilitate arbitration
- not to adjudicate disputes.
