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IN THE HIGH COURT OF JUDICATURE AT MADRAS
ABDUL QUDDHOSE, J
Sundaram Finance Ltd. – Appellant
Versus
S.C. Shah and Company Private Limited – Respondent
ORDER :
1. These petitions have been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (in short “the Act”) seeking for appointment of an Arbitrator by this Court.
2. There seems to be a dispute between the petitioner and the respondents arising out of the following loan contracts:-
a) Working Capital Facility Agreement; and Guarantee Deed, both dated 26.04.2023.
b) Working Capital Facility Agreement; and Guarantee Deed, both dated 09.05.2023.
3. The arbitration clause contained in the aforesaid contracts is reproduced hereunder:-
“15.17. Dispute Resolution:
(a) All disputes, differences and/or claim, arising out of this Agreement, whether during its subsistence or thereafter shall be settled by Arbitration in accordance with the provisions of The Arbitration and Conciliation Act, 1996, or any statutory amendments thereof and shall be referred to the Sole Arbitration of an Arbitrator nominated by the Managing Director of SFL. It is agreed that Sole Arbitrator nominated under this clause shall adjudicate the disputes, differences and/or claims on the basis of the written pleadings, documents and submissions filed by the parties, dispensing with oral evidence and techni
The court must appoint an arbitrator when parties do not reach consensus despite an existing arbitration clause as stipulated under the Arbitration and Conciliation Act, 1996.
The existence of an arbitration clause allows a party to seek court assistance for appointing an arbitrator when no consensus exists, with other disputes to be resolved by the arbitrator.
Court held that under Section 11 of the Arbitration and Conciliation Act, an arbitrator can be appointed when an arbitration clause exists and procedural requirements are met.
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 appointed an arbitrator as the parties consented to arbitration under the existing arbitration clause, complying with statutory requirements.
The court affirmed that failure to respond to conciliation requests allows for the appointment of an arbitrator under the Arbitration and Conciliation Act, 1996.
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