2001 (8) TMI 1281 - HC - Companies Law

Summary

Issues: Scope and effect of section 11(2) of the Arbitration and Conciliation Act, 1996

Analysis:

1. Background and Disputes: The appeals revolve around disputes stemming from a lease deed dated 28-10-1993 concerning a property in New Delhi. The lease deed included an arbitration clause, and the appellant invoked this clause due to the respondent's failure to hand over vacant possession as per the agreement. The arbitrator issued an Award on 28-4-1997, which was corrected for clerical error on 29-7-1997.

2. Failure to Appoint Arbitrator: The respondent in all appeals failed to appoint their arbitrator within the specified time frame, despite multiple reminders from the appellant. Consequently, the appellant requested their appointed arbitrator to act as the sole arbitrator per the arbitration clause.

3. Legal Contention: The main issue before the court was the effect of the unilateral reference to the arbitrator or the failure of the other party to appoint an arbitrator. The respondent argued that under section 11 of the Act, the Chief Justice should have been approached for the appointment of an arbitrator. However, the appellant contended that the arbitration clause itself provided a procedure for appointment, allowing the arbitrator appointed by one party to act as the sole arbitrator in case of the other party's failure to appoint.

4. Interpretation of Section 11(6)(c): The court referred to a similar case decided by the Bombay High Court, emphasizing that if the agreement between parties specifies an appointment procedure, the sole arbitrator can proceed with the proceedings. In this case, the agreement allowed the first arbitrator to act as the sole arbitrator after the other party's failure to appoint an arbitrator.

5. Enforcement of Award: The court highlighted that the respondent did not challenge the award under section 34(2)(v) of the Act, which could have been done if the arbitral procedure was not in accordance with the agreement. As a result, the arbitral award was final and enforceable as a decree under section 36 of the Act.

6. Court Decision: The court disagreed with the Single Judge's conclusion that the award was a nullity due to the sole arbitrator proceeding with the matter. Given the agreement in the arbitration clause and the respondent's failure to object within the specified time frame, the court held that the execution petition was maintainable, and the award was enforceable as a decree.

7. Outcome: The court set aside the previous judgment and directed the execution of the award as a decree of the court, dismissing the objections raised by the respondent. The original execution petitions were restored for further legal proceedings.

8. Costs: Each party was left to bear their own costs in the matter.

This detailed analysis covers the issues raised in the judgment, providing a comprehensive understanding of the court's decision regarding the scope and effect of section 11(2) of the Arbitration and Conciliation Act, 1996.