The appointment of a substitute arbitrator under section 15(2) of the Arbitration and Conciliation Act, 1996, should be governed by the same rules that were applicable to the appointment of the arbitrator being replaced.

JUDGMENT :

Moushumi Bhattacharya, J.

1. The petitioner seeks appointment of arbitrators in place and stead of the arbitrators who were appointed by an order of Court dated 22.2.2022. The arbitrators were later elevated to the Bench/relocated outside India and communicated their inability to perform their duties. The petitioner has filed the present applications for appointment of arbitral tribunals under sections 14 and 15 of The Arbitration and Conciliation Act, 1996.

2. The question which falls for adjudication is the governing provisions of the 1996 Act with regard to the appointment of the Tribunal. In other words, whether the procedure for appointment of a new arbitral tribunal should revert to

i) section 14 of the Act which contemplates an arbitrator’s failure or impossibility to act or

ii) to section 11 where the Court intervenes in the matter of appointment of arbitrators subject to circumstances existing under the situations envisaged in section 11 of the Act.

3. The petitioner urges that the appointment should be governed by section 14 while the respondent stresses on the need to start afresh from the stage of section 11(5) of the Act. The submissions made on behalf of the parties should be presented in a little more detail.

4. Learned counsel appearing for the petitioner submits that the arbitrator was de facto unable to perform her functions under section 14(i)(a) by reason of the elevation and relocation. Counsel relies on section 15(2) which provides for appointment of a substitute arbitrator when the mandate of an arbitrator terminates under section 14 or by reason of the additional circumstances referred to in section 15(1). Counsel submits that the procedure for substitution of an arbitrator under section 15 must be the same as the initial appointment of the arbitrator whose mandate came to an end by reason of the inability. Counsel submits that the respondent had forfeited the right of appointment of an arbitrator under section 11 in the earlier proceedings and hence cannot seek to revive that right. Counsel urges that the Court now has the jurisdiction to appoint an arbitrator in the same manner as the previous appointment on 22.2.2022.

5. Learned counsel appearing for the respondent places emphasis on the concept of party autonomy to urge that the Court can only appoint an arbitrator under section 11(5) and (6) of the Act and that sections 14 and 15 do not confer any power on the Court to make such appointment. It is submitted that the petitioner had unilaterally appointed a sole arbitrator which prompted the respondent to make a written request to the unilaterally-appointed sole arbitrator to withdraw as he was ineligible to act as an arbitrator. The controversy between the parties arose after the arbitrator refused to withdraw resulting in the respondent filing an application under section 14 before the Court. Counsel submits that unlike the earlier circumstances, there is no controversy between the parties in the present proceeding as the arbitrators were unable to continue with their functions. It is also submitted that the “rules” mentioned in section 15(2) would be the rules as contained in section 11(5) of the Act which would mean that the procedure for appointment should revert to the stage of section 11(5) for appointment of a new Arbitral Tribunal. Counsel submits that section 11(5) must be complied with before the Court intervenes to appoint an arbitrator as sought for in the present application.

The issue for decision :

6. The dilemma confronting the parties – and the Court -is the stage to which the appointment of the arbitrator should revert on the erstwhile arbitrators becoming de jure/de facto unable to perform their functions. The application for appointment has accordingly been made under sections 14 and 15 of The Arbitration and Conciliation Act, 1996 on the termination of the mandate of the arbitrators.

7. The question which is to be answered is whether the Court steps in to appoint an arbitrator