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2004 Supreme(Del) 855

High Court Of Delhi
PRASAR BHARATI - Appellant
Versus
STRACON (INDIA) LIMITED - Respondent
Arbitration Petition 28 of 2004
Decided On : 09/30/2004

Advocates Appeared:
ANISH DAYAL, ARVIND NIGAM, RAJEEV SHARMA, Vijay M.Chauhan

The appointment of an arbitrator under Section 11(6)(c) is an administrative function, and objections to the arbitration clause and issues of limitation should be raised before the arbitrator, not the court.

Headnote:

Arbitration - Appointment of Independent Arbitrator - Arbitration and Conciliation Act, 1996, Section 11(6)(c)

Fact of the Case:

The petitioner filed a petition under Section 11(6)(c) of the Arbitration and Conciliation Act, 1996 for the appointment of an independent arbitrator due to disputes arising from an Accreditation agreement with the respondent.

Finding of the Court:

The court found that the appointment of an arbitrator is an administrative function and not adjudicatory. The court also held that objections to the arbitration clause and issues of limitation should be raised before the arbitrator, not the court.

Issues: The issues included the appointment of an arbitrator, objections to the arbitration clause, and the question of limitation.

Ratio Decidendi: The court clarified that the appointment of an arbitrator is an administrative function, objections to the arbitration clause should be raised before the arbitrator, and issues of limitation should be addressed by the arbitrator.

Final Decision: The court appointed a retired Judge as the arbitrator and directed the parties to file statements of claims, with the arbitrator instructed to dispose of the reference expeditiously.

MUKUL MUDGAL, J.

( 1 ) ALLOWED subject to all just exceptions. Delay in re-filing the petition stands condoned. Arb. P. No. 28/04 this is a petition under Section 11 (6) (c) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `act ) filed by Prasar Bharati for appointment of an independent arbitrator.

( 2 ) THIS petition again raises the questions which repeatedly arise during proceedings for the appointment of an independent arbitrator under Section 11 (6) (c) of the Act. The petitioner had entered into an Accreditation agreement dated 5th June, 1997 with the respondent by which the respondent was required to book advertisements for the programmes telecast by the petitioner and the respondent was allowed a commission @ 15% of the advertisement revenue collected by it and rest of the revenue was to be remitted back to the petitioner. Clause 5 of the agreement between the parties providing for settlement of disputes by way of arbitration reads as follows:-

"5. In the event of any question, dispute or difference arising under these presents or in connection therewith except as to any matters the decision of which is specially provided for by these presents, the same shall be referred to the sole arbitration of an Officer appointed to be the arbitrator by the Director General, doordarshan. It will be no objection that the arbitrator is a Government Servant, he has expressed views on all or any of the matters in dispute or difference. The award of the arbitrator shall be final and binding on the parties to these presents. In the event of the arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, it shall be lawful for the Director General, doordarshan to appoint another arbitrator in place of the outgoing arbitrator in the manner aforesaid. The arbitrator may, from time to time, with the consent of the parties to these presents enlarge time for making and publishing the award. Upon every and any such reference, the assessment of the costs of an incidental to the refer onced and the award respectively shall be in the discretion of the arbitrator. Subject as aforesaid, the Arbitration Act, 1940 and the rules thereunder and any statutory modification thereof for the time being in force shall be deemed to apply to the arbitration proceedings under this clause. "

( 3 ) THAT admittedly upon disputes arising between the parties and in accordance with the above clause, the petitioner had called upon the Director General, doordarshan and the respondent to appoint an arbitrator by addressing a communication to the Director General as provided in the aforesaid Clause 5 on 8th February, 2003 by a letter admittedly received by the Office of the d. G. , Doordarshan as well as the respondent. In reply, the petitioner had been informed by the Directorate general, Doordarshan that the post of the Director general, Doordarshan was lying vacant and its request for appointment of an arbitrator can only be acted upon by the Director General as and when he is appointed and as such no action has been taken on the petitioner s request for appointment of an arbitrator. On 23th January, 2004 the petitioner approached this Court under sub-section (6) of Section 11 of the Act. On 28th January, 2004 notice was issued to the respondents. In reply to the arbitration petition, Mr. Arvind K. Nigam along with Mr. Anish Dayal appears on behalf of the respondents and has raised the following pleas in opposition to the prayer made in the petition for appointment of an arbitrator:- (i) that there is no arbitration agreement between the parties to appoint an arbitrator as no arbitration clause is contained in the agreement between the parties. (ii) The dispute is stale one and is barred by limitation. (iii) the disputes between the parties stood settled as the bank guarantee was returned to the petitioner and (iv) that the present petition is also barred by limitation. Mr. Rajiv Sharma, the learned co












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