IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.S. SUNDAR, N. SENTHILKUMAR, JJ.
J. Krishnaveni – Petitioner
Versus
Same Deutz Fahr India Private Limited – Respondent
W.P. No. 4745 of 2024, W.M.P. Nos. 5180, 5181, 5244 of 2024
Decided On : 29-08-2024
Arbitration - Writ Petition - Arbitration and Conciliation Act, 1996 Sections 11, 21; Indian Partnership Act, 1932 Section 69 - The court held that the appointment of an arbitrator under Section 11 is judicial, not administrative, and a writ petition challenging such an order is not maintainable.
Fact of the Case:
The petitioners challenged the appointment of an arbitrator, claiming it was obtained through fraud and that the partnership firm lacked the capacity to appoint counsel due to being unregistered.
Finding of the Court:
The court found that the writ petition was not maintainable as the appointment of the arbitrator was a judicial act, and the petitioners had participated in the arbitration proceedings.
Issues: Whether the writ petition challenging the appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 is maintainable.
Ratio Decidendi: The court concluded that a judicial order made under Section 11 cannot be challenged via a writ petition under Article 226 of the Constitution.
Result: The writ petition is dismissed with costs.
ORDER :
Prayer: Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorari to call for records pertaining to the order passed by this Court in Arb.O.P.(Com.Div.)No. 191 of 2023 dated 27.06.2023 in so far as appointing Hon'ble Mr.Justice M.Jaichandran, Former Judge of High Court of Madras as the Sole Arbitrator residing at D.No. 422, South 2nd Main Road, Kapaleeshwar Nagar, Neelankarai, Chennai-600135 and quash the same as the said appointment was made obtained by playing fraud upon this Court.
1. This writ petition has been filed for the issuance of a Writ of Certiorari to quash the order passed by a Learned Single Judge of this Court in Arb.O.P(Com.Div.) No. 191 of 2023 dated 27.06.2023, wherein, Hon'ble Mr.Justice M.Jaichandran, Former Judge of High Court of Madras, was appointed as a Sole Arbitrator to adjudicate the disputes between the parties herein, alleging that the said appointment was obtained by playing fraud upon this Court.
2. The case of the petitioners is that they have formed an unregistered partnership firm in the name and style of M/s.Krisha Agro Tech and that it is a ‘Partnership at Will’. The petitioners state that they are the partners of the said M/s.Krisha Agro Tech, where 2nd & 3rd petitioners of this writ petition are the Authorized Signatories as per Clause F of the deed. Their businesses had commenced from 25.02.2015 and they had sought for a dealership with the respondent for the sale of its tractors and spare parts.
3. The Respondent had filed Arb.O.P. (Comm. Div.) No. 191 of 2023 before this Court under Section 11(6) of Arbitration and Conciliation Act, 1996 for the appointment of an Arbitrator. This Court, vide order dated 27.06.2023 had appointed Hon'ble Mr.Justice M.Jaichandran, Former Judge of the Madras High Court as a Sole Arbitrator to adjudicate the dispute between the parties.
4. It is seen from the records that there is no dispute that the parties herein entered into a Dealership Agreement dated 03.01.2018. Further, the respondent has issued a notice dated 05.12.2022 under Section 21 of Arbitration and Conciliation Act, 1996 to the petitioners and the same was received by the petitioners. Owing to a lack of reply, the respondents approached this Court under Section 11 of Arbitration and Conciliation Act. This Court ordered issuance of notice. Subsequently, the names of the petitioners were printed in the cause list. As no one appeared on behalf of the petitioners in the Section 11 proceedings, this Court passed an order appointing the Sole Arbitrator in the above Arbitration Original Petition.
5. The petitioners, having appeared in the arbitration proceedings, stated that they have filed a memo before the Tribunal that a sum of Rs.2,00,000/- towards Arbitrator's fees was deposited on 07.01.2024 via NEFT.
6. The main contention raised by the petitioners is that the first respondent in the Arbitration Original Petition is arrayed as “M/s. Krisha Agro Tech, No. 6, GST Road, Mamandur, Chengalpattu, Kanchipuram-603 111.” It is submitted by the counsel that the long and short cause title of Arb.O.P(Com.Div.)No. 191 of 2023, the name of M/s.Krisha Agro Tech is mentioned without describing the proper signatory to receive notice/summons. The petitioners contended that notice was not issued to them prior to the appointment of the Arbitrator. The petitioners further contended that the partnership firm lacks jural capacity to appoint counsel as the firm is not a registered firm as required under Section 69(3)(a) of the Indian Partnership Act, 1932. Under these circumstances, it is argued that a Vakalat could not be filed on behalf of the firm and that the respondent has deliberately played fraud upon the Court.
7. Registry has raised an objection with regard to maintainability of the writ petition. This Court directed the Registry to number the writ petition subject to maintainability keeping the maintainability question open. This Court was pleased to observe as follo
AI
Point of Law : S.13(2) provides that a party who intends to challenge appointment of an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or afte....
Point of law: As per the legal position settled by the Supreme Court in catena of judgments, the High Court has the jurisdiction under Section 11(6) of the said Act to nullify the appointments made b....
Court clarified that initial appointment of an Arbitrator must derive authority from the Arbitration Act, rejecting jurisdiction under Section 8 and confirming that participation does not waive juris....
Only a party to the arbitration agreement can challenge the appointment of an arbitrator under Section 12 of the Arbitration and Conciliation Act, 1996.
An arbitrator's appointment by consent recorded in court meets legal requirements, and jurisdictional challenges based on alleged lack of procedure cannot invalidate prior agreements.
Court emphasized the appointment of an independent arbitrator when doubts of bias arise under arbitration agreements.
A unilateral appointment of an arbitrator by one party without the other's consent is invalid under the Arbitration and Conciliation Act, 1996, rendering any orders made void.
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