Case Note & Summary
The petitioners, Srinivasa Construction (a registered partnership firm) and its partners, filed a petition under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator. The dispute arose out of a construction agreement dated 05/09/1988 entered into between the petitioners and the respondent society (The Mysore and Chamarajanagara District School Teachers House Building Co-operative Society Ltd.). The agreement contained an arbitration clause (Clause 21) providing for reference of disputes to arbitration. The petitioners alleged that the respondents failed to pay the full amount due for the construction work and that disputes arose. The petitioners invoked the arbitration clause and appointed their arbitrator, but the respondents failed to appoint their arbitrator. The respondents opposed the petition, contending that the agreement was not an arbitration agreement, that the dispute was not arbitrable, and that the claim was barred by limitation. The court examined Clause 21 and found it to be an arbitration agreement. The court held that the arbitration clause survives the completion of the contract and that the disputes raised by the petitioners are arbitrable. The court rejected the respondents' objections and appointed a sole arbitrator to adjudicate the disputes. The court directed the arbitrator to enter upon reference and make an award within the time stipulated under the Act.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) of the Arbitration and Conciliation Act, 1996 - Existence of Arbitration Agreement - The petitioners sought appointment of an arbitrator under Clause 21 of the agreement dated 05/09/1988. The respondents contended that the agreement was not an arbitration agreement and that the dispute was not arbitrable. The court held that Clause 21 is an arbitration agreement and the dispute is arbitrable. The court appointed a sole arbitrator to adjudicate the disputes between the parties. (Paras 1-10) B) Arbitration Law - Survival of Arbitration Clause - Section 11(6) of the Arbitration and Conciliation Act, 1996 - The respondents argued that the agreement had been completed and no dispute existed. The court held that the arbitration clause survives the completion of the contract and disputes arising out of the contract are arbitrable. (Paras 5-8)
Issue of Consideration
Whether the dispute between the parties is arbitrable and whether the court should appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 when the respondents failed to appoint an arbitrator as per the agreement.
Final Decision
The court allowed the petition and appointed a sole arbitrator to adjudicate the disputes between the parties. The arbitrator was directed to enter upon reference and make an award within the time stipulated under the Arbitration and Conciliation Act, 1996.
Law Points
- Arbitration clause survives termination of contract
- Section 11(6) of Arbitration and Conciliation Act
- 1996
- Appointment of arbitrator by court when party fails to appoint
- Existence of arbitration agreement
- Dispute referable to arbitration
