Case Note & Summary
The dispute arose between M/s Continental India Private Limited and the General Manager Northern Railway regarding the appointment of an arbitrator under their agreement. The appellant filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, after the respondent failed to appoint an arbitrator as per the arbitration clause in the agreement. The High Court allowed the application but directed the appointment of an arbitrator in accordance with the General Conditions of Contract (GCC), which the appellant contended was not applicable. The appellant argued that the GCC was neither signed by the parties nor referenced in the original agreement, and thus the High Court erred in its direction. The respondent's counsel did not dispute the failure to appoint an arbitrator but could not justify the applicability of the GCC. The Supreme Court analyzed the arbitration clause and concluded that the respondent forfeited its right to appoint an arbitrator due to its failure to act within the stipulated time. The court held that the High Court's direction to constitute an Arbitral Tribunal under the GCC was unsustainable and quashed that order. Instead, the court appointed a sole arbitrator to resolve the dispute, allowing the appeal and avoiding further delays in the arbitration process.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Right to Appoint Forfeited - Arbitration and Conciliation Act, 1996, Section 11(6) - The respondent failed to appoint an arbitrator as per the arbitration clause in the agreement, leading to the forfeiture of its right to appoint. The court held that the Chief Justice or his nominee was required to appoint a sole arbitrator under Section 11(6) of the Act (Paras 6-8).
Issue of Consideration
Whether the High Court erred in directing the appointment of an arbitrator under the General Conditions of Contract instead of appointing a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Final Decision
The Supreme Court quashed the High Court's order directing the appointment of an arbitrator under the GCC and appointed Smt. Justice R. Banumathi as a sole arbitrator to adjudicate the dispute, allowing the appeal.
Law Points
- Arbitration agreement
- appointment of arbitrator
- Section 11(6) Arbitration and Conciliation Act
- 1996
- General Conditions of Contract
- forfeiture of right to appoint arbitrator
