Vijender Jain, J. (Oral)

( 1 ) IT has been contended by Mr. Sanat Kumar, counsel for the applicant that the respondent failed to appoint an Arbitrator after expiry of 30 days from the receipt of the request from the applicant. Counsel for the applicant has also contended that the Arbitrator-Mr. J. S. Nirody was the legal counsel of the respondent and, therefore, he could not act as an Arbitrator. Learned counsel for the applicant has contended that in the old Arbitration Act, 1940, in terms of Section 8, sub-Section (2) which is para materia with the new Act, it lays down that if the appointment was not made within fifteen days after service of the notice by the opposite party, the Court could appoint an Arbitrator. He has emphasised that in the old Act the word occurring was may . For proper consideration of the contention of learned counsel for the parties, it is relevant to reproduce Section 8 (2) of Arbitration Act, 1940, which is as follows :

8. (2) If the appointment is not made within fifteen clear days after service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties.

( 2 ) MR. KUMAR has contended that in Arbitration and Conciliation Act, 1996, Section 11 which is similar with Section 8 of the old Act, sub-Section (4) of Section 11 particularly deals with the contingencies when after receipt of request from the opposite party within thirty days, the Arbitrator is not appointed the appointment shall be made upon request of a party. Section 11 (4) of Arbitration and Conciliation Act, 1996 is as follows :

11. (4) If the appointment procedure in sub-section (3) applies and -

(A) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or

(B) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.

( 3 ) LEARNED counsel for the applicant has contended that the legislature has used the expression may in the old Arbitration Act but the expression used shall under sub-section (4) of Section 11 casts a mandatory obligation on the Court to appoint an Arbitrator in the event of failure of the party to appoint an Arbitrator within thirty days of the receipt of this notice. He has placed reliance on the judgment of the Apex Court in Nandyal Coop. Spinning Mills Ltd. Vs. K. V. Mohan Rao (1993 Vol. 2 SCC P. 654 ). What has been contended before me by counsel for the applicant is when Court could supply the vacancy in view of the word may under the old Act of 1940 in the event of the failure of the party to appoint an arbitrator after receipt of notice of fifteen days. In view of the new Act which has incorporated word shall , it is the Court alone which has got the jurisdiction to appoint an Arbitrator and supply the vacancy after notice of such appointment has been given and party has failed to appoint the Arbitrator within thirty days of the receipt of the notice and that is the object and purpose of the new Act.

( 4 ) ON the other hand, learned counsel appearing for the respondent-Mr. Manoj Chatterjee has contended that in the Arbitration Clause between the parties there is no stipulation of the time frame in which the Arbitrator has to be appointed. Clause 23 (1) of the Contract is as follows :-

23. 1 In the event of any dispute/disputes arising under or out of or relating to the construction, meaning, operation or effect of this contract or breach thereof, the matters in dispute shall be REFERRED TO to two arbitrators one each to be nominated by the parties contracting herein and in

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