2018 (9) TMI 930 - SC - Indian Laws

Constitution of an arbitral tribunal - Appointment of Sole Arbitrator - adjudication of claims of the petitioner under the Commission Processing Contract dated 11.09.2014 - Held that - Clause 15 refers to arbitration or court. Thus, there is an option and the petitioner has invoked the arbitration clause and, therefore, we have no hesitation, in the obtaining factual matrix of the case, for appointment of an arbitrator and, accordingly, Justice Prakash Prabhakar Naolekar, formerly a Judge of this Court, is appointed as sole Arbitrator to arbitrate upon the disputes which have arisen between the parties. The arbitration petition is allowed.

Summary

Issues involved:
Constitution of arbitral tribunal with a sole arbitrator under Section 11(5) of the Arbitration and Conciliation Act, 1996; Interpretation of arbitration clause in the Commission Processing Contract.

Analysis:

The petitioner, a company from China, sought the constitution of an arbitral tribunal with a sole arbitrator to resolve disputes under a Commission Processing Contract with the respondent, an Indian partnership firm. The contract was for the supply of certain products, and disputes arose during its performance, leading to the need for arbitration. The respondent refused to consent to the appointment of the sole arbitrator, prompting the petitioner to approach the Court for relief. The arbitration clause in the contract mentioned resolving disputes through consultation and, if unsuccessful, through arbitration or court. The petitioner argued for arbitration, while the respondent contended that the disputes should be adjudicated in court, not through arbitration.

The Court analyzed the arbitration clause, emphasizing the need to understand its intent. Referring to a previous case, the Court highlighted the importance of parties' intention to resolve disputes through arbitration. In this case, the clause provided an option for arbitration or court, and since the petitioner invoked the arbitration clause, the Court appointed a sole arbitrator to adjudicate the disputes. Justice Prakash Prabhakar Naolekar was appointed as the sole Arbitrator, with guidance from the Arbitration & Conciliation (Amendment) Act, 2015, to ensure timely completion of arbitration proceedings. The Registry was directed to inform the Arbitrator, and the parties were allowed to communicate the order to the Arbitrator. The arbitration petition was allowed, with no costs imposed.