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Issues involved: Interpretation of arbitration clause and appointment of arbitrator under section 11(6) of the Arbitration and Conciliation Act, 1996.
Interpretation of Arbitration Clause: The judgment dealt with a case where disputes arose between parties governed by an agreement with an arbitration clause. The clause specified that disputes shall be referred to the Functional Director of the owner for arbitration. The clause also outlined the procedure for appointment of an arbitrator and continuation of arbitration in case of transfer or vacancy. The appellant demanded appointment of an arbitrator as per the clause, but the respondent failed to act, leading to a legal dispute. Appointment of Arbitrator under Section 11(6): The appellant, after serving notice and not receiving a response from the respondent regarding arbitrator appointment, approached the Chief Justice of the High Court under section 11(6) of the Arbitration and Conciliation Act, 1996. The designated Judge of the High Court refused to appoint an arbitrator, stating that the appellant should follow the procedure outlined in the arbitration clause. The appellant then filed a petition under Article 226 of the Constitution, which was also dismissed. The Supreme Court, after considering the arguments, allowed the appeal, citing a previous case law that emphasized the right to appoint an arbitrator not being automatically forfeited after 30 days, but the appointment must be made before the other party moves the court under Section 11. Decision: The Supreme Court set aside the orders of the designated Judge and the Division Bench, directing the application under Section 11(6) to be restored before the Chief Justice of the High Court for consideration and appointment of an arbitrator in accordance with the law. No costs were awarded in the matter.
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