2018 (4) TMI 781 - SC - Indian Laws

Appointment of an Arbitrator - Section 11(6) read with Section 11(9) of the Arbitration and Conciliation Act, 1996 - existence of arbitration clause in the contract - Held that - the letter dated 14.06.2010 is a part of the Contract and it shall be read and construed as an integral part of the Contract. Therefore, the contention of the respondent-Company that there does not exist any arbitration agreement between the parties is not sustainable in the eyes of law - Arbitration clause exists in the Contract. It is a cardinal principle of the Arbitration and Conciliation Act that the parties are free to decide the number of arbitrators, provided, it is an odd number, as well as the procedure for appointing them - Justice Amitava Roy, a former Judge of this Court, is appointed as the sole Arbitrator to adjudicate the disputes between the parties on such fees he may fix. Petition disposed off.

Summary

Issues:
1) Appointment of an Arbitrator under the Arbitration and Conciliation Act, 1996 for disputes between parties.
2) Existence of an arbitration agreement between the parties.
3) Interpretation of the Contract Agreement and Clause 3.14 regarding arbitration.
4) Appointment of a sole Arbitrator in case of disagreement on the procedure.

Analysis:
1) The case involved petitions filed under Section 11(6) read with Section 11(9) of the Arbitration and Conciliation Act, 1996 for the appointment of an Arbitrator to resolve disputes between the petitioner-Company and the respondent-Company. The Court emphasized the limited scope of the court's role in appointing an Arbitrator, focusing on the existence of an Arbitration Agreement and the petitioner's case for the appointment.

2) The Court examined the Contract Agreement dated 30.08.2010 and Clause 3.14, which outlined the arbitration process in case of disputes. It was established that the letter dated 14.06.2010 formed an integral part of the Contract, containing the arbitration clause. The respondent-Company's argument against the existence of an arbitration agreement was deemed unsustainable, and the Court ruled in favor of the petitioner-Company.

3) The principle of party autonomy in choosing the number of arbitrators and the appointment procedure was highlighted. However, in cases of disagreement or inability to constitute the Arbitral Tribunal mutually, Section 11 of the Act provides a mechanism for judicial intervention in appointing an Arbitrator. The Court appointed Justice Amitava Roy as the sole Arbitrator to resolve the disputes, subject to necessary disclosures and eligibility criteria under the Act.

4) The judgment emphasized the importance of adhering to the arbitration agreement within the Contract and the Act's provisions for the appointment of an Arbitrator in case of unresolved disputes. The appointment of a sole Arbitrator was deemed appropriate in this scenario, ensuring a fair resolution of the disputes between the parties.