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2007 (4) TMI 626 - SC - Companies LawAppointment of arbitrator - Held that - In the present case, in fact the appellant s demand was to get some retired Judge of the Supreme Court to be appointed as arbitrator on the ground that if any person nominated in the arbitration clause is appointed, then it may suffer from bias or the arbitrator may not be impartial or independent in taking decision. Once a party has entered into an agreement with eyes wide open it cannot wriggle out of the situation that if any person of the respondent-BPCL is appointed as arbitrator he will not be impartial or objective. However, if the appellant feels that the arbitrator has not acted independently or impartially, or he has suffered from any bias, it will always be open to the party to make an application under Section 34 of the Act to set aside the award on the ground that arbitrator acted with bias or malice in law or fact. No reason to interfere with the order passed by the learned Single Judge of the High Court of Delhi in Arbitration Petition No.181 of 2005. The arbitrator has already been appointed. He should proceed in the matter and decide the dispute expeditiously. Consequently, the appeal is dismissed with no order as to costs.
Issues Involved:
1. Appointment of Arbitrator under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996. 2. Interpretation of Clause 91 of the contract regarding the appointment of arbitrator. 3. Validity of the appointment of arbitrator by the Director (Marketing) after the filing of the petition. 4. Applicability of the thirty-day period for appointment of arbitrator under Section 11(6) of the Act. Issue-wise Detailed Analysis: 1. Appointment of Arbitrator under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996: The appellant sought the appointment of a retired Judge of the Supreme Court of India as arbitrator under Section 11(5) of the Act. However, the application was dismissed by the learned Single Judge of the High Court, treating it under Section 11(6) of the Act. The Supreme Court clarified that the application under Section 11(5) was not maintainable and the learned Single Judge's treatment of the application under Section 11(6) was a bona fide error. 2. Interpretation of Clause 91 of the contract regarding the appointment of arbitrator: Clause 91 of the contract stipulated that any dispute should be referred to the sole arbitration of the Director (Marketing) of the Corporation or an officer nominated by him. The appellant requested the Director (Marketing) to appoint a retired Judge of the Supreme Court to ensure impartiality. The Director (Marketing) instead appointed Shri P.S. Bhargava, Executive Director (Quality Control Cell) of BPCL, as the sole arbitrator. 3. Validity of the appointment of arbitrator by the Director (Marketing) after the filing of the petition: The appellant contended that since the appointment of the arbitrator was made after the filing of the petition, the Director (Marketing) lost the right to appoint an arbitrator. The respondent argued that the appointment was made with due dispatch and there was no delay. The learned Single Judge concluded that the appointing authority acted with due dispatch and dismissed the petition. 4. Applicability of the thirty-day period for appointment of arbitrator under Section 11(6) of the Act: The Supreme Court examined the applicability of the thirty-day period under Section 11(6) and referred to the decision in Datar Switchgears Ltd. v. Tata Finance Ltd. & Anr., which clarified that the thirty-day period is not mandatory under Section 11(6). The right to appoint an arbitrator does not get automatically forfeited after thirty days if the appointment is made before the filing of the application under Section 11. The Court reiterated that the period of thirty days is not applicable under Section 11(6) and upheld the validity of the appointment made by the Director (Marketing). Conclusion: The Supreme Court found no reason to interfere with the order passed by the learned Single Judge of the High Court of Delhi. The arbitrator appointed by the Director (Marketing) was directed to proceed with the arbitration and decide the dispute expeditiously. The appeal was dismissed with no order as to costs.
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