Case Note & Summary
The Supreme Court of India dealt with Arbitration Application No. 32 of 2019, where the Applicants sought the appointment of a sole arbitrator under the Arbitration and Conciliation Act, 1996. The dispute arose from a contract dated 22nd May 2017 between the Applicants, a consortium of Perkins Eastman Architects DPC and Edifice Consultants Private Limited, and the Respondent, HSCC (India) Ltd. The Applicants alleged that the Respondent failed to comply with the dispute resolution clause of the contract, which required the Chairman and Managing Director to appoint an arbitrator. The Respondent contended that the appointment made by the Chief General Manager was valid and denied any inaction on their part. The court examined the contractual obligations and the timeline of events, including the invocation of the arbitration clause and the subsequent appointment of an arbitrator. The court identified two main legal issues: whether the arbitration was international commercial arbitration and whether the court should appoint an arbitrator due to the Respondent's failure to comply with the contractual terms. Ultimately, the court dismissed the application, ruling that the arbitration did not qualify as international commercial arbitration and that the Respondent's appointment of an arbitrator, although late, did not warrant intervention by the court. The court emphasized the importance of impartiality in the appointment process and referenced previous judgments to support its reasoning.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Validity of Appointment - Arbitration and Conciliation Act, 1996, Section 11(6), 11(12)(a) - The court considered whether the appointment of an arbitrator by the Chief General Manager was valid as it was not made by the Chairman and Managing Director as required by the contract. The court held that the appointment was not valid as it did not comply with the contractual stipulations (Paras 19-22). B) Arbitration Law - International Commercial Arbitration - Definition and Applicability - Arbitration and Conciliation Act, 1996, Section 2(1)(f) - The court analyzed whether the arbitration could be classified as international commercial arbitration based on the lead member's nationality and the central management's location. It concluded that the arbitration did not qualify as international commercial arbitration since the lead member was an Indian entity (Paras 10-11).
Issue of Consideration
Whether the arbitration in the present case would be an International Commercial Arbitration and whether a case is made out for the exercise of power by the Court to appoint an arbitrator.
Final Decision
The Supreme Court dismissed the application for the appointment of a sole arbitrator, ruling that the arbitration did not qualify as international commercial arbitration and that the appointment made by the Chief General Manager was invalid as it did not comply with the contractual stipulations.
Law Points
- Arbitration
- appointment of arbitrator
- dispute resolution
- international commercial arbitration
- impartiality
