Appointment Of Arbitrator Under Section 11 (4), (5) & (6) Of The Arbitration Act: A Never-Ending Saga Of Judicial Interpretation - Litigation - India Law Articles in English - Mondaq Business Briefing - Books and Journals - VLEX 321978023

Appointment Of Arbitrator Under Section 11 (4), (5) & (6) Of The Arbitration Act: A Never-Ending Saga Of Judicial Interpretation

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Article by Vishal Bhat, Associate1

Introduction

The docket of the Supreme Court has been growing larger and larger by the year and this has been affecting its quality and efficacity in the delivery of justice. It has time and again been articulated by a number of jurists in this country that the Supreme Court should curtail its wide jurisdiction and confine itself to a set of core issues. In several cases before the Apex Court, it has often been observed that the area of controversy is limited, law well settled and does not require attention of the Apex Court of this country to decide such matter. Yet, it has time and again been noticed that the Apex Court adjudicates on the issue and delivers judgments that run into several pages where no great proposition of law requiring the attention of the Supreme Court is laid down.

One such area of concern is the field of Arbitration which is now a growing and fertile field of litigation for lawyers. The Arbitration and Conciliation Act of 1996 was the result of recommendations for reform,2 particularly in the matter of speeding up the arbitration process3 and reducing intervention by the court and reducing litigation in the country.4 The 1996 Act is also no different from the 1940 Act. Even 14 years after its enactment, we find every year that there are no less than a 100 cases of the Supreme Court reported on arbitration and especially appointment of Arbitrator under Sec. 11 (4) , (5) & (6) of the Arbitration Act, 1996.5 This has been adding to the existing burden of the Court and in spite of that, a large number of appeals are filed in the Supreme Court.

Appointment of Arbitrator by Chief Justice

The Parties to an arbitration are free to agree on the procedure for appointing of arbitrators.6 The situations suitable for intervention of the Chief Justice or his designate naming an arbitrator are:

The procedure agreed is not followed; There is no agreement on procedure. In both situations, the intervention of the Chief Justice or his designate7 are necessary. Under the first situation, if a party fails to act under such procedure, or the parties (or the two arbitrators, one appointed by each party) are unable to reach an agreement expected of them under such procedure, or a third party (including an institution) fails to perform any function entrusted to it under such procedure, any part may request the Chief Justice or his designate to take necessary measure, unless such other measure have been provided in the agreement for securing such appointment.8

Contentious Issues under Chief Justice's Powers

In a petition moved under Section 11 of the 1996 Act, the Supreme Court has in a catena of cases held that the broad issues which can be decided by the Chief Justice are as follows9

Territorial Jurisdiction;10 Existence of an Arbitration Agreement;11 Appointment of an Arbitrator;12 Subsistence of an Arbitrable Dispute;13 Appointment of an Arbitrator: Administrative or Judicial

Section 11 provides for the procedure of appointment of Arbitrator by the Chief Justice. S. 11 (7) of the 1996 Act provides that 'a decision on a matter entrusted by ss. (4) or ss.(5) or ss.(6) to the Chief Justice or the person or institution by him is final.' This led to a number of disputes regarding the nature of the order passed by the Chief Justice on appointment of Arbitrators and whether the same was judicial or administrative in nature?

(i) Initial Interpretation: Order is Administrative

Amongst some of the earliest interpretations of the provision of S.11(7) was the case of Sundaram Finance Ltd v. NEPC India Ltd.14 In this case it was held "Under the 1996 Act appointment of arbitrator/s is made as per the provision of Section 11 which does not require the Court to pass a judicial order appointing arbitrator/s."  This decision was reiterated in the case of Ador Samia Private Ltd v. Peekav Holdings Limited,15 where it was held by the Hon'ble Supreme Court...

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