2011 (11) TMI 798 - HC - Indian Laws

Summary

Issues involved: Appointment of Arbitrator by Municipal Corporation of Delhi (MCD) u/s 11(6) of the Arbitration and Conciliation Act, 1996.

Summary:

Issue 1: Appointment of Arbitrator by MCD after filing of the petition
The MCD appointed an Engineer Member of the Delhi Development Authority as a sole Arbitrator after the petition was filed by the Petitioner. The Petitioner argued that MCD forfeited its right to appoint an Arbitrator as per previous legal notices. The MCD contended that the appointment was made in accordance with the arbitration clause.

Issue 2: Interpretation of Section 11(6) of the Act
The Supreme Court's decision in Datar Switchgears v. Tata Finance Ltd. clarified that the right to appoint an Arbitrator u/s 11(6) does not automatically forfeit after 30 days of demand. The appointment must be made before the first party moves the Court under Section 11. The Court relied on this interpretation to appoint an Arbitrator in this case.

Issue 3: Application of previous legal precedents
The decisions in Datar Switchgears, Punj Lloyd v. Petronet MHB Ltd., and Union of India v. Bharat Battery Manufacturing Co. affirmed the interpretation of Section 11(6) and the consequences of not appointing an Arbitrator within the specified time frame. These precedents were applied to determine the outcome of the present case.

Conclusion:
The Court appointed a retired Additional District & Sessions Judge as a Sole Arbitrator to adjudicate the disputes between the parties. The interim orders were to continue until the Petitioner filed an application under Section 17 of the Act within four weeks. Failure to do so would result in the vacation of the interim order.