2016 Supreme(Bom) 558

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.D. DHANUKA, J.
Roptonal Ltd. (Erstwhile the Indian) Film Company (Cyprus) Ltd. – Petitioner
Versus
Anees Bazmee, An Indian Inhabitant – Respondent
REVIEW PETITION (L) NO. 7 OF 2016 & ARBITRATION APPLICATION NO. 97 OF 2013
Decided On : 08-06-2016

The power to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 is conferred on the Chief Justice of the High Court or his designate and not on the High Court itself. The power under Section 11(6) of the Act is not an administrative power but a judicial power.

Headnote:

ARBITRATION - Appointment of arbitrator - Jurisdiction - International commercial arbitration - Chief Justice of High Court - Powers - Section 11(6) and 11(9) of the Arbitration and Conciliation Act, 1996.

Fact of the Case:

The petitioners, Viacom 18 Media Private Limited and Roptonal Limited, Cyprus, filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (the Act) in the High Court of Bombay for the appointment of an arbitrator in a dispute with the respondent. The respondent did not raise any issue of jurisdiction of the Chief Justice or his designate to hear and entertain the application. The learned designate of the Chief Justice appointed a former Chief Justice of Allahabad High Court as a sole arbitrator by consent of the parties. The petitioners later realized that since one of the parties to the arbitration agreement was incorporated outside India, the arbitration would be an International Commercial Arbitration and thus the application for appointment of an arbitrator could only be filed before the Chief Justice of India under Section 11(9) of the Act and not under Section 11(6) before the Chief Justice of the High Court. The petitioners filed a Review Petition (L) No.32 of 2015 in the High Court of Bombay seeking recall of the order dated 27th June 2014 passed by the then designate of the Chief Justice on the ground that the then designate of the Chief Justice had no jurisdiction to pass the said order under Section 11(6) of the Act since one of the parties to the proceedings was incorporated in a country other than India and there was an inherent lack of jurisdiction in the learned designate of the Chief Justice to pass any such order. The High Court allowed the Review Petition and recalled the order dated 27th June 2014 passed in Arbitration Application No.166 of 2013 and dismissed the said arbitration application being without jurisdiction. The petitioners filed the present review petition seeking recall of the order dated 12th June 2014 passed by the learned designate of the Chief Justice on similar grounds.

Finding of the Court:

The High Court held that: * The power to appoint an arbitrator under Section 11(6) of the Act is conferred on the Chief Justice of the High Court or his designate and not on the High Court itself. * The power under Section 11(6) of the Act is not an administrative power but a judicial power. * The Chief Justice or his designate has the right to decide the preliminary aspects as indicated in the judgment, including his own jurisdiction to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his power and on the qualifications of the arbitrator or arbitrators. * The Chief Justice or the judge designated would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11 of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the judge designate. * In a case where an arbitral tribunal has been constituted by the parties without having recourse to Section 11 of the Act, the arbitral tribunal will have the jurisdiction to decide all matters as contemplated by Section 16 of the Act. * Since an order passed by the Chief Justice of the High Court or by the designated judge of that court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution of India to the Supreme Court. * There can be no appeal against an order of the Chief Justice of India or a judge of the Supreme Court designated by him while entertaining an application under Section 11 of the Act. * The provisions of Section 11(6) or Section 11(9) of the Act are not derogable and thus the question of waiver under Section 4 of the Act does not arise. * The powers of the Chief Justice of High Court or his designate under Section 11(6) and power of Chief Justice of India or his designate can be exercised only when there is failure of consent of parties though there is an arbitration agreement exist and cannot be equated with powers of court in other proceedings where there was no arbitration agreement recorded between the parties initially. * The order dated 12th June, 2014 passed by the learned designate of the Chief Justice in arbitration application No.97 of 2013 is recalled. * Arbitration Application No.97 of 2013 is dismissed being without jurisdiction.

Issues: 1. Whether the Chief Justice of the High Court or his designate had jurisdiction to appoint an arbitrator under Section 11(6) of the Act in a case of international commercial arbitration where one of the parties to the arbitration agreement was incorporated outside India? 2. Whether the petitioners could challenge the appointment of the arbitrator made by the learned designate of the Chief Justice even though they had consented to the appointment and participated in the arbitral proceedings?

Ratio Decidendi: 1. The power to appoint an arbitrator under Section 11(6) of the Act is conferred on the Chief Justice of the High Court or his designate and not on the High Court itself. 2. The power under Section 11(6) of the Act is not an administrative power but a judicial power. 3. The Chief Justice or his designate has the right to decide the preliminary aspects as indicated in the judgment, including his own jurisdiction to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his power and on the qualifications of the arbitrator or arbitrators. 4. The Chief Justice or the judge designated would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11 of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the judge designate. 5. In a case where an arbitral tribunal has been constituted by the parties without having recourse to Section 11 of the Act, the arbitral tribunal will have the jurisdiction to decide all matters as contemplated by Section 16 of the Act. 6. Since an order passed by the Chief Justice of the High Court or by the designated judge of that court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution of India to the Supreme Court. 7. There can be no appeal against an order of the Chief Justice of India or a judge of the Supreme Court designated by him while entertaining an application under Section 11 of the Act. 8. The provisions of Section 11(6) or Section 11(9) of the Act are not derogable and thus the question of waiver under Section 4 of the Act does not arise. 9. The powers of the Chief Justice of High Court or his designate under Section 11(6) and power of Chief Justice of India or his designate can be exercised only when there is failure of consent of parties though there is an arbitration agreement exist and cannot be equated with powers of court in other proceedings where there was no arbitration agreement recorded between the parties initially.

Final Decision: The High Court allowed the review petition and recalled the order dated 12th June 2014 passed by the learned designate of the Chief Justice in Arbitration Application No.97 of 2013. The High Court also dismissed Arbitration Application No.97 of 2013 being without jurisdiction.