VERY IMPORTANT POINT
Proceedings for the appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 have a very narrow scope and the same are not covered by Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985,and as such an application for appointment of arbitrator cannot be rejected on the ground BIFR had framed scheme for revival of company.

Headnote:(i) Arbitration and Conciliation Act, 1996-Section 11 r/w Section 22 of Sick Industrial Companies (Special Provisions) Act, 1985-Application for appointment of arbitration-Objection on ground that respondent Company was a declared sick Industrial Company and scheme was framed by BIFR and Section 22 would a bar-Held : Proceedings u/s 11 have very narrow scope and same are not covered by section 22 of SICA- take appropriate step to stay arbitration proceedings under Arbitration and conciliation Act-Arbitration appointed. (Para 3)
(ii) Sick Industrial Companies (Special Provisions) Act, 1985 r/w Section 11 of Arbitration and Conciliation Act, 1996-Bar of suit etc. against sick company-Proceedings u/s 11 of Arbitration and Concialiation Act are not covered by Section 22 of SICA-No bar to appoint arbitrator u/s 11 proceedings. (Para 3)

ORDER

1. Objection is overruled in view of the directions given by Hon ble the Chief Justice of India.

2. This is an application under Section 11 of the Arbitration and Concialition Act, 1996 for the appointment of an arbitrator. The application is made under the "Appointment of Arbitrators by Hon ble the Chief Justice of India Scheme, 1996", framed pursuant to Section 11.

3. In the present case, under Sections 11(5) and (6), the Chief Justice or any person designated by him to take necessary measures is required to appoint an arbitrator as provided therein. It is not disputed by either side that the requirements of these sub-sections are complied with in the present case. It is, however, contended by learned counsel for the respondent that since the respondent Company has been declared as a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985, and a scheme for the said Company has also been framed under the said Act, an arbitrator should not be appointed. The provisions of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 have been shown to me. The present proceedings, however, for the appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 have a very narrow scope and the same are not covered by Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985. If however, the respondents desire that the arbitration proceedings should not be proceeded with, it is open to them to take appropriate legal steps in that connection under the provisions of the Arbitration and Conciliation Act, 1996 and in accordance with law.

4. In the premises, by consent of both parties, Justice S. Ranganathan, retired Judge of the Supreme Court of India is appointed as sole arbitrator, as prayed for in the arbitration petition.

(C.R.) Order accordingly.

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