1. Application under Section 11, Arbitration & Conciliation Act, 1996 for appointment of an arbitrator in an international commercial arbitration following a party's failure to nominate. (Para 1 , 3 )
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2019 Supreme(SC) 1244
SUPREME COURT OF INDIA
UDAY UMESH LALIT, INDU MALHOTRA, SANJIV KHANNA, JJ.
M/s. Shaf Broadcast Pvt. Ltd. - Petitioner
Versus
Doordarshan - A Constituent of Prasar Bharti & Anr - Respondents
Arbitration Petition No. 36 of 2019
Decided On : 07-11-2019
Advocates Appeared:
For the Parties:Abhimanyu Tewari, Reginald Valsalan, Viren Sibal, Rajeev Sharma, M/s. Pratap & Co., Advocates
For the Parties:Abhimanyu Tewari, Reginald Valsalan, Viren Sibal, Rajeev Sharma, M/s. Pratap & Co., Advocates
Important Points
IMPORTANT POINT
Arbitrator can be appointed as per request of parties.
Arbitrator can be appointed as per request of parties.
Subject
Arbitration Law - Appointment of Arbitrator
Act Referred
Headnote
Arbitration and Conciliation Act, 1996 – Section 11 – Arbitration application – International Commercial Arbitration – Even though arbitration agreement provides for a three-member arbitral tribunal, Counsel for all parties at the time of hearing, requested for appointment of a Sole Arbitrator in modification of arbitration clause stipulating a three-member tribunal, to adjudicate the disputes – A Former Judge, Supreme Court of India appointed as Sole Arbitrator subject to declarations being made under Section 12 of Arbitration and Conciliation Act, 1996 with respect to independence and impartiality and ability to devote sufficient time to complete arbitration within period of 12 months – Arbitration be conducted at New Delhi as Seat of arbitration – Arbitrator will be paid fees in accordance with Fourth Schedule of Arbitration and Conciliation Act, 1996 as amended. (Paras 4, 5, 6 and 7)
Facts of the case:
Petitioner has filed an Application under Section 11 of Arbitration & Conciliation Act, 1996 for appointment of Arbitrator on behalf of Respondent No. 1 – Doordarshan, in an international commercial arbitration.
Findings of Court:
Arbitration clause specifies that Seat of arbitration will be at New Delhi, India. We direct arbitration be conducted at New Delhi as Seat of arbitration.
Result : Matter disposed of.
Legal Category Hierarchy
Table of Contents
2. Request by all parties to modify the arbitration agreement's requirement for a three-member tribunal to the appointment of a sole arbitrator. (Para 4 )
3. The court accepted the parties' mutual consent to modify the arbitration clause to appoint a sole arbitrator instead of a three-member tribunal. (Para 4 , 5 )
4. Parties to an arbitration agreement may mutually consent to modify the composition of the arbitral tribunal from a multi-member to a sole arbitrator. (Para 4 , 5 )
5. Appointment of a sole arbitrator subject to statutory declarations, confirmation of the seat of arbitration, and determination of fees per the Fourth Schedule. (Para 5 , 6 , 7 )
6. Can a court appoint a sole arbitrator if the arbitration agreement stipulates a three-member tribunal?
Yes, the court may appoint a sole arbitrator if the counsel for all parties request and consent to the modification of the arbitration clause stipulating a three-member tribunal. (Para 4 , 5 )
7. What conditions must an appointed arbitrator satisfy regarding independence and timeline?
The arbitrator must make declarations under Section 12 of the Arbitration and Conciliation Act, 1996 regarding independence and impartiality, and must be able to complete the proceedings within the time limit specified under Section 29A. (Para 5 )
8. How are the seat of arbitration and arbitrator fees determined in a Section 11 appointment?
The seat of arbitration is determined by the arbitration clause in the agreement, and fees are paid in accordance with the Fourth Schedule of the Arbitration and Conciliation Act, 1996. (Para 6 , 7 )
ORDER :
INDU MALHOTRA, J.
1. The Petitioner has filed an Application under Section 11 of the Arbitration & Conciliation Act, 1996 for appointment of an Arbitrator on behalf of Respondent No. 1 – Doordarshan, in an international commercial arbitration.
2. The Petitioner – Company and Respondent No. 2 entered into a Contract dated 08.03.2010 with Respondent No. 1 – Doordarshan. The Contract contains an arbitration clause, which reads as under :
“8.2 Arbitration: In the case of dispute arising upon or in relation to or in connection with the Contract between HB and the Entity, which has not been settled amicably, any Party can refer the dispute for Arbitration under (Indian) Arbitration and Conciliation Act, 1996. Such disputes shall be referred to an Arbitral Tribunal consisting on 3 (three) arbitrators, one each to be appointed by HB and the Entity, the third arbitrator shall be chosen by the two arbitrators so appointed by the Parties which shall act as Presiding Arbitrator. In case of failure of the two arbitrators, appointed by the Parties to reach a consensus regarding the appointment of the third arbitrator within a period of Thirty (3) days from the date of appointment of the two arbitrators, the Presiding Arbitrator shall be appointed by the Secretary of the Ministry of Information and Broadcasting, Government of India. The Arbitration and Conciliation Act, 1996 and any statutory modification or reenactment thereof shall apply to these Arbitration proceedings.
8.3 Arbitration proceedings shall be held in India at New Delhi and the language of the Arbitration proceedings and that of all documents and communications between the Parties shall be English. The law as applicable in India shall govern the rights and obligations of the parties.”
3. Disputes arose between the parties, which led to the invocation of the arbitration clause on 14.01.2019 by the Petitioner – Company. The Petitioner – Company nominated its arbitrator on 28.02.2019 in terms of the agreement. However, Respondent No. 1 – Doordarshan failed to nominate an arbitrator. Consequently, the Petitioner – Company has filed the present Application under Section 11 of the Arbitration & Conciliation Act, 1996 seeking appointment of an Arbitrator by the Court on behalf of Respondent No. 1 – Doordarshan.
4. Even though the arbitration agreement provides for a three-member arbitral tribunal, the Counsel for all the parties at the time of hearing, requested for the appointment of a Sole Arbitrator in modification of the arbitration clause stipulating a three-member tribunal, to adjudicate the disputes.
5. Accordingly, with the consent of the Counsel for the parties, we appoint Mr. Justice (Retd.) A. M. Sapre, Former Judge, Supreme Court of India as the Sole Arbitrator subject to the declarations being made under Section 12 of the Arbitration and Conciliation Act, 1996 with respect to independence and impartiality, and the ability to devote sufficient time to complete the arbitration within the period of 12 months. The learned Arbitrator is requested to complete the proceedings within the time-limit specified under Section 29A.
6. The arbitration clause specifies that the Seat of arbitration will be at New Delhi, India. We direct the arbitration be conducted at New Delhi as the Seat of arbitration.
7. The Arbitrator will be paid fees in accordance with the Fourth Schedule of the Arbitration and Conciliation Act, 1996 as amended.
8. A copy of this Order be despatched to Mr. Justice (Retd.) A. M. Sapre, Former Judge, Supreme Court of India at the following address:
“Mr. Justice (Retd.) A. M.
Sapre, Former Judge, Supreme
Court of India,
C-203, Second Floor
Sarvodaya Enclave
New Delhi – 110017
Tel No.: 011-40254823
Mob. No.: 7042955488”
The parties are directed to appear before the learned Arbitrator on 15.11.2019 at 11 a.m.
The matter is disposed of accordingly.
