1. Special Leave Petition challenging a High Court judgment — Appointment of arbitrator — Incapacity of appointing authority. (Para 1 )
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2021 Supreme(SC) 1207
SUPREME COURT OF INDIA
Rohinton Fali Nariman, Navin Sinha, K.M. Joseph, JJ.
Union Of India - Petitioner
Versus
M/S Tantia Constructions Limited - Respondents
Petition(s) for Special Leave to Appeal (C) No(s). 12670/2020
Decided On : 11-01-2021
Important Points
The Court expressed prima facie disagreement with the ruling in Central Organisation for Railway Electrification vs. M/s ECI-SPIC-SMO-MCML (JV), questioning the validity of arbitrator appointments when the appointing authority is incapacitated from referring the matter to arbitration, and requested a larger Bench to review the issue.
Subject
Arbitration - Appointment Authority
Headnote
(A) Arbitration Act, 1996 - Section 11 - Special leave petition dismissed as the High Court's judgment was deemed faultless. Court expresses disagreement with prior judgment, suggesting that if the appointing authority cannot refer a matter to arbitration, subsequent appointments may not be valid based on case specifics. (Paras 1-2)
(B) Judicial Review - Courts may request larger benches to evaluate discrepancies in previous judgments for legal correctness. (Paras 2)
Facts of the case:
This case involves a special leave petition by the Union of India against a judgment from the High Court regarding the arbitration appointment process.
Findings of Court:
The High Court's decision was upheld as correct, with the court dismissing the petition.
Issues: Whether appointments remain valid if the appointing authority is incapacitated from referring matters to arbitration.
Ratio Decidendi: The judgment emphasizes that the inability of the appointing authority affects the validity of the appointments, indicating a need for a larger bench to reevaluate the previous ruling.
Result: Special Leave Petition dismissed.
(B) Judicial Review - Courts may request larger benches to evaluate discrepancies in previous judgments for legal correctness. (Paras 2)
Facts of the case:
This case involves a special leave petition by the Union of India against a judgment from the High Court regarding the arbitration appointment process.
Findings of Court:
The High Court's decision was upheld as correct, with the court dismissing the petition.
Issues: Whether appointments remain valid if the appointing authority is incapacitated from referring matters to arbitration.
Ratio Decidendi: The judgment emphasizes that the inability of the appointing authority affects the validity of the appointments, indicating a need for a larger bench to reevaluate the previous ruling.
Result: Special Leave Petition dismissed.
Legal Category Hierarchy
-
civil law
-
arbitration and conciliation
- appointment of arbitrators (Para 1)
-
arbitration and conciliation
Advocates:
Advocate Appeared:
For the Petitioner: Mr. K.M. Natarj, ASG, Mr. Sharath Nambiar, Adv., Mr. Uday P Yadav, Adv., Mr. Raj Bahadur Yadav, AOR
For the Respondent: Mr. Soumya Chakraborty,Sr. Adv., Mr. Raghunath Ghose, Adv., Mr. Santanu Ghosh Adv., Mr. Nikhil Jain, AOR
Advocate Appeared:
For the Petitioner: Mr. K.M. Natarj, ASG, Mr. Sharath Nambiar, Adv., Mr. Uday P Yadav, Adv., Mr. Raj Bahadur Yadav, AOR
For the Respondent: Mr. Soumya Chakraborty,Sr. Adv., Mr. Raghunath Ghose, Adv., Mr. Santanu Ghosh Adv., Mr. Nikhil Jain, AOR
Table of Contents
2. Validity of arbitrator appointments when the appointing authority is incapacitated from referring the matter to arbitration. (Para 1 )
3. Prima facie disagreement with the view that appointments may be valid despite the appointing authority's incapacity to refer the matter to arbitration. (Para 1 )
4. Once the appointing authority is incapacitated from referring a matter to arbitration, subsequent appointments cannot be valid. (Para 1 )
5. Special Leave Petition dismissed — Request to constitute a larger Bench to review a prior three-judge bench decision. (Para 1 , 2 )
6. Whether an arbitrator's appointment is valid if the appointing authority is incapacitated from referring the matter to arbitration?
No, the court held that once the appointing authority itself is incapacitated from referring the matter to arbitration, it does not follow that appointments may be valid depending on the facts of the case. (Para 1 )
ORDER :
1. Having heard Mr. K.M. Nataraj, learned ASG for sometime, it is clear that on the facts of this case, the judgment of the High Court cannot be faulted with. Accordingly, the Special Leave Petition is dismissed. However, reliance has been placed upon a recent three-Judge Bench decision of this Court delivered on 17.12.2019 in Central Organisation for Railway Electrification vs. M/s ECI-SPIC-SMO-MCML (JV) A Joint Venture Company, 2019 SCC OnLine 1635. We have perused the aforesaid judgment and prima facie disagree with it for the basic reason that once the appointing authority itself is incapacitated from referring the matter to arbitration, it does not then follow that notwithstanding this yet appointments may be valid depending on the facts of the case.
2. We therefore request the Hon’ble Chief Justice to constitute a larger Bench to look into the correctness of this judgment.
3. Pending application stands disposed of.
