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DELHI HIGH COURT
C.HARI SHANKAR
MS Fam Bhagat Infratech Pvt. Ltd. – Appellant
Versus
Alok Kumar Agarwal – Respondent
| Table of Content |
|---|
| 1. existence of arbitration agreement clauses. (Para 1) |
| 2. law rendering clauses unsustainable. (Para 2) |
| 3. no objection to appointment of new arbitrator. (Para 3 , 4) |
| 4. termination of the current arbitrator's mandate. (Para 5) |
| 5. appointment and proceedings of new arbitrator. (Para 6 , 7 , 8 , 9 , 10 , 11) |
(Video-Conferencing)
1. Clauses 9.1 and 9.2 of the agreement, dated 23rd August, 2011, between the petitioner and the respondents in the present case reads as under:
"9.1 That in the event of any dispute or question arising out in between the parties hereto, such dispute shall be referred to the sole arbitration of an Arbitrator to be nominated by the FIRST PARTY upon, whose decision/award shall be final and binding upon the parties hereto. The FIRST PARTY and SECOND PARTY agree not to move or proceed against the award of such arbitrator(s).
9.2 The place of arbitration shall be Delhi/New Delhi."
2. Clearly, in view of law laid down by the Supreme Court in Perkins Eastman Architects DPC v. HSCC (India) Limited, 2019 SCC OnLine SC 1517 and Bharat Broadband Network Ltd. v. United Telecoms Ltd., (2019) 5 SCC 755 as well as Section 12(5) of the Arbitra
An arbitration clause that allows one party exclusive authority to appoint an arbitrator is invalid and contradicts statutory provisions, necessitating the appointment of a new arbitrator.
The court emphasized that the timeframe for appointing an arbitrator, as set in the agreement, is mandatory, and any deviation undermines the arbitration agreement's validity.
The authority to appoint an arbitrator cannot be solely conferred to one party, as per the mandatory provisions of the Arbitration and Conciliation Act, 1996.
The court found the arbitration clause unenforceable as it contradicted statutory provisions, appointing a new arbitrator while affirming the binding nature of arbitration according to the provisions....
Unilateral appointment of an arbitrator is contrary to Section 12(5) of the Arbitration and Conciliation Act, necessitating mutual agreement for such appointment.
Strict enforcement of arbitration agreement and the law does not permit either party to act as an arbitrator or appoint the arbitrator to arbitrate on the disputes.
Unilateral appointment of an arbitrator violates impartiality; appointment must comply with arbitration agreements and allow equal rights for both parties.
Arbitrator - Appointment procedure - In cases where one party has a right to appoint a sole arbitrator, its choice will always have an element of exclusivity in determining or charting course for dis....
The court affirms the validity of the arbitration agreement and appoints an arbitrator as the parties consented to resolve disputes via arbitration.
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