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TMI Blog2002 (1) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... , in clause 7, the service of a notice upon the other party to the arbitration agreement to show cause why the nomination of an arbitrator, as requested, should not be made, it is bad and must be amended. The other party needs to be given notice of the request only so that it may know of it and it may, if it so chooses, assist the Chief Justice or his designate in the nomination of an arbitrator. X X X X Extracts X X X X X X X X Extracts X X X X ..... nistrative order. It, therefore, becomes necessary to request the Attorney General to assist the Court, Mr. Andhyarujina, who is in Court but is not appearing in the matter, has advanced some submissions before us. He shall also be entitled to do so when the matter is taken up again before a Constitution Bench. The Registry shall furnish a copy of this order and a copy of the paper books both to the Attorney General and to Mr. Andhyarujina. Adjourned accordingly." 3. To determine whether the order of the Chief Justice or his designate under section 11 is a judicial order or an administrative order, it is necessary to take note of certain provisions of the act. Section 2(e) defines a Court thus : "(e)'Court' means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes;" Section 5 reads thus : "Extent of judicial intervention.--N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expected of them under that procedure; or (c)a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment. (7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justice or the person or institution designated by him is final. (8) The Chief Justice or the person or institution designated by him, in appointing an arbitrator, shall have due regard to-- (a )any qualifications required of the arbitrator by the agreement of the parties; and (b)other considerations as are likely to secure the appointment of an independent and impartial arbitrator. (9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, the Chief Justice of India or the person or institution designated by him may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities. (10) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the arbitration proceedings and make an award. That award can be sought to be set aside under section 34. 5. Section 16 empowers the arbitral tribunal to rule on its own jurisdiction. Clause (1) of section 16 is relevant, and reads thus : "Competence of arbitral Tribunal to rule on its jurisdiction.--(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,-- (a )an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and (b)a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. 6. If a party is aggrieved by an arbitral award made after rejection of his plea of jurisdiction, he can challenge it in accordance with section 34. Section 34, so far as is relevant reads thus : "Application for setting aside arbitral award.--(1) Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conferred on the Chief Justice of India under sub-section (10) of section 11 of the Arbitration and Conciliation Ordinance, 1996, I hereby make the following Scheme. 1. Short title. - This Scheme may be called the Appointment of Arbitrators by the Chief Justice of India Scheme, 1996. 2. Submission of request. - The request to the Chief Justice under sub-section (4) or sub-section (5) or sub-section (6) of section 11 shall be made in writing and shall be accompanied by-- (a)the original arbitration agreement or a duly certified copy thereof; (b)the names and addresses of the parties to the arbitration agreement; (c)the names and addresses of the arbitrators, if any, already appointed; (d)the name and address of the person or institution, if any, to whom or which any function has been entrusted by the parties to the arbitration agreement under the appointment procedure agreed upon by them; (e)the qualifications required, if any, of the arbitrators by the agreement of the parties; (f)a brief written statement describing the general nature of the dispute and the points at issue; (g)the relief or remedy sought; and (h)an affidavit, supported by the relevant document, to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt made or measure taken by the Chief Justice or any person or institution designated by him in pursuance of the request under paragraph 1 shall be communicated in writing to-- (a)the parties to the arbitration agreement; (b)the arbitrators, if any, already appointed by the parties to the arbitration agreement; (c)the person or the institution referred to in paragraph 2(d); (d)the arbitrator appointed in pursuance of the request. 10. Requests and communications to be sent to Registrar. - All requests under this Scheme and communications relating thereto which are addressed to the Chief Justice shall be presented to the Registrar of this court, who shall maintain a separate Register of such requests and communications. 11. Delivery and receipt of written communications. - The provisions of sub-sections (1) and (2) of section 3 of the Arbitration and Conciliation Ordinance, 1996 shall, so far as may be, apply to all written communications received or sent under this Scheme. 12. Costs for processing requests. - The party making a request under this Scheme shall, on receipt of notice of demand from-- (a )the Registry of the court where the Chief Justice makes the appointment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, independence and impartiality of the arbitrator and in respect of the jurisdiction of the arbitrator could be raised before the arbitrator, who would decide the same. If a contingency arose where the Chief Justice or his designate refused to make an appointment, the party seeking the appointment was not without remedy. An intervention was possible by a court in the same way as an intervention was possible against an administrative order of the executive. In other words, it would be a case of non-performance of his duty by the Chief Justice or his designate and, therefore, a mandamus would lie. In such an event there would not be any inordinate delay in setting the arbitral process in motion. The nature and function performed by the Chief Justice or his designate being essentially to aid the constitution of the arbitral tribunal, it could not be held to be a judicial function, as otherwise the Legislature would have used the expression 'court' or 'judicial authority'. It was, therefore, held that an order under section 11 refusing to appoint an arbitrator was not amenable to the jurisdiction of this Court under article 136 of the Constitution. 10. In the referring judgment the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue. Reliance was placed upon sub-section (7) of section 11, which refers to a 'decision' on the matter entrusted to the Chief Justice or his designate, and on sub-section (8), which requires the Chief Justice or his designate to have due regard to the qualifications required of the arbitrator by the agreement of the parties and other considerations as are likely to secure the appointment of an independent and impartial arbitrator. In the learned counsel submission, these also indicated that the Chief Justice or his designate had to perform an adjudicatory function in naming an arbitrator. The learned counsel submitted that section 16 of the Act enabled the arbitral tribunal to decide on the width of its jurisdiction but it could not decide whether or not an arbitrator had no jurisdiction because he had been appointed by the Chief Justice or his designate even though the period of thirty days of the receipt of the request to do so had not elapsed; this was an issue which had to be decided by the Chief Justice or his designate. Reliance was placed upon clause 7 of the Appointment of Arbitrators by the Chief Justice of India Scheme; it was submitted that the affected parties had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sections 12 and 13 applied even to an arbitrator who had been nominated by the Chief Justice or his designate under section 11. In the submission of the learned Attorney General, the competence of the arbitral tribunal to rule on its own jurisdiction under section 16 was not confined to the width of its jurisdiction but extended to deciding whether it had any jurisdiction at all. Section 34 gave a party adversely affected by an arbitral award the right to approach a court to set aside on the stated grounds, which included the composition of the arbitral tribunal. An order under section 34 was appealable under section 37, as was an order accepting the plea that the arbitral tribunal did not have jurisdiction. The learned Attorney General drew our attention to the judgments of this Court in Engineering Mazdoor Sabha Representing Workmen Employed under the Hind Cycles Ltd. v. The Hind Cycle Ltd. 1963 Supp. (1) SCR 625 and Jaswant Sugar Mills Ltd. v. Lakshmichand 1963 Supp. (1) SCR 242 to submit that a tribunal was a body that exercised an adjudicatory function. The Chief Justice or his designate under section 11 performed neither an adjudicatory function nor they were exercising the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except that it need not operate to end the dispute. 'Determination' or 'order' must be judicial or quasi-judicial; purely administrative or executive direction is not contemplated to be made the subject-matter of appeal to this Court. The essence of the authority of this Court being judicial, this Court does not exercise administrative or executive powers, i.e., character of the power conferred upon this Court, original or appellate, by its constitution being judicial, the determination or order sought to be appealed from must have the character of a judicial adjudication." The Court went on to state that to make a decision or an act judicial, the following criteria must be satisfied: "(1)it is in substance a determination upon investigation of a question by the application of objective standards to facts found in the light of pre-existing legal rule; (2)it declares rights or imposes upon parties obligations affecting their civil rights; and (3)that the investigation is subject to certain procedural attributes contemplating an opportunity of presenting its case to a party, ascertainment of facts by means of evidence if a dispute be on questions of fact, and if the dispute be on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns on subjective tests or inclinations...". 19. To put it concisely, for an order properly to be the subject of a petition for special leave to appeal under article 136 it must be an adjudicatory order, an order that adjudicates upon the rival contentions of parties, and it must be passed by an authority constituted by the State by law for the purpose in discharge of the State's obligation to secure justice to its people. 20. Section 11 deals with the appointment of arbitrators. It provides that the parties are free to agree on a procedure for appointing an arbitrator or arbitrators. In the event of there being no agreement in regard to such procedure, in an arbitration by three arbitrators each party is required to appoint one arbitrator and the two arbitrators so appointed must appoint the third arbitrator. If a party fails to appoint an arbitrator within thirty days from the request to do so by the other party or the two arbitrators appointed by the parties fail to agree on a third arbitrator within thirty days of their appointment, a party may request the Chief Justice to nominate an arbitrator and the nomination shall be made by the Chief Justice or any person or institution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or his designate is required to perform an adjudicatory function. That the word 'decision' is used in the matter of the request by a party to nominate an arbitrator does not of itself mean that an adjudicatory decision is contemplated. 22. As we see it, the only function of the Chief Justice or his designate under section 11 is to fill the gap left by a party to the arbitration agreement or by the two arbitrators appointed by the parties and nominate an arbitrator. This is to enable the arbitral tribunal to be expeditiously constituted and the arbitration proceedings to commence. The function has been left to the Chief Justice or his designate advisedly, with a view to ensure that the nomination of the arbitrator is made by a person occupying high judicial office or his designate, who take would due care to see that a competent, independent and impartial arbitrator is nominated. 23. It might be that though the Chief Justice or his designate might have taken all due care to nominate an independent and impartial arbitrator, a party in a given case may have justifiable doubts about that arbitrator's independence or impartiality. In that event it would be open to that party to chall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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