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DELHI HIGH COURT
C.HARI SHANKAR
Prime Comfort (P.) Limited – Appellant
Versus
New India Assurance Co. Ltd. – Respondent
(Video-Conferencing)
1. This is a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, consequent on failure of the parties, between them, to appoint a competent arbitral tribunal to arbitrate on their disputes.
2. Given the nature of the controversy, it is not necessary to set out the facts relating to the disputes. Suffice it to state that paras 4.1 to 4.11 of the petition set out the disputes in controversy.
3. Consequent to the claim, raised by the petitioner on the respondent, not being met by the respondent, the petitioner, vide letter dated 26th June, 2020, invoked the provision for arbitration in the agreement between the parties. The said letter also appointed an Advocate, to arbitrate on the disputes, and called upon the respondent to appoint/nominate its arbitrator.
4. The petition asserts that the arbitration clause, in the agreement between the parties, provided for a period of two months within which the respondent could appoint its arbitrator. The respondent did not do so. The petitioner has, therefore, invoked the jurisdiction of this Court under Section 11(6) of the 1996 Act.
5. Mr. Patel, learned Senior Counsel for the
A sole arbitrator can be appointed by a party if the opposing party defaults on arbitrator appointment, per arbitration clause and judicial precedent.
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.
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.
The court appointed an arbitrator as the parties consented to arbitration under the existing arbitration clause, complying with statutory requirements.
The Court has the independent authority to appoint an arbitrator under Section 11 of the Arbitration Act regardless of the parties' proposed panel of arbitrators.
The appointment of the arbitrator must be in accordance with the arbitration agreement and must satisfy the provisions of the arbitration act.
A party's right to appoint an arbitrator can be forfeited if they fail to do so within the agreed timeframe as per the arbitration agreement.
Unilateral appointment of an arbitrator is contrary to Section 12(5) of the Arbitration and Conciliation Act, necessitating mutual agreement for such appointment.
Petition seeking appointment of Arbitrator is not sustainable in a situation where arbitration clause itself is disputed.
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