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TMI Blog2009 (7) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... der the laws of Malaysia and is engaged in the business of fabrication of all types of offshore and onshore structures and complexes. The respondent on the other hand is the company incorporated under the (Indian) Companies Act, 1956 and is inter alia engaged in the business of providing engineering and related technical services for petroleum refineries and other industrial projects. 3. The necessary facts of the case are that Oil and Natural Gas Corporation Limited (ONGC) invited a tender vide notification dated November 17, 2003 for carrying work of Survey, Design, Engineering, Procurement, Fabrication, Anticorrosion and Weight coating, Laying of submarine pipeline, Installation of SPM, Load out, Tie- down/Sea-fastening and various other jobs in respect of Mumbai High South Field offshore site. 4. In connection with the said tender issued by ONGC, respondent and petitioner entered into a Business Agreement on 22/01/2004 by which it was agreed that the respondent shall quote as a bidder against the said Tender with the petitioner as a sub-contractor for identified scope of work. The tender was awarded by ONGC to the respondent by notice dated 10/03/2004 for the said fabrica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued is that in this case the arbitration panel must consist of three arbitrators, one is to be nominated by each party and the third arbitrator is to be chosen by the nominated arbitrators. Learned counsel for the petitioner on the other hand did not accept the said stand of the learned counsel for the respondent and submitted that in terms of the agreement in this case dispute can be decided by the sole arbitrator. Matter was actually heard before this Court on the aforesaid controversy. 8. Learned counsel for the petitioner submitted that admittedly the arbitration clauses in the contract which govern the rights of the parties in the matter of arbitration are as follows: 12.1 This Subcontract shall be governed by and construed in accordance with the Laws of India. The Courts at Delhi shall have sole jurisdiction. 12.2 The Parties shall endeavour to resolve any dispute or difference amicably through joint negotiation and when necessary by reference to the Chief Executive of EIL and SSE. If any dispute or difference, which cannot be mutually resolved by the parties, the same shall be referred to arbitration in accordance with the provisions contained in Indian Arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter to a panel of three arbitrators is not ruled out if the arbitration clause is properly construed alongwith Section 10 of the said Act. 16. Learned counsel admitted that Clause 12.2 is silent about the number of arbitrators but Clause 12.3 refers to an expression `arbitrator(s)'. By relying on the said expression in Clause 12.3 learned counsel submits that the arbitration clause thus postulates the appointment of more than one arbitrator. As there cannot be two arbitrators which is an even number, the minimum number of arbitrators other than one would be three. 17. Learned counsel also submitted that while clause 12.2 stipulates that the arbitration between the parties would be governed under the said Act it also says in clause 12.2 that it shall generally be in accordance with UNCITRAL rules. 18. Learned counsel also submitted that they have a policy that in matters involving high stakes above Rupees ten crores, it should be referred to a Committee on panel of arbitrators. In support of this submission, learned counsel referred to a Standard Contract Clauses which have been disclosed in the counter affidavit filed by the respondent and reliance was placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rator(s) to give reasons. 23. The Arbitration Tribunal as defined under Section 2(d) of the Act means a sole arbitrator or a panel of arbitrators . 24. Section 10(2) of the Act is very relevant in order to resolve the controversy in this case in as much as Section 10(2) makes it very clear where the number of arbitrator is not determined, the arbitral tribunal shall consist of a sole arbitrator. In this connection if UNCITRAL rules are referred the position will remain the same. UNCITRAL model law on International Commercial Arbitration also accepts the same definition of Arbitration Tribunal in Article 2(b). Article 10 of those rules is almost identical with Section 10 of the said Act. Article 2(b) and Article 10 of those rules are extracted herein below:- Article 2. Definition and rules of interpretation - For the purposes of this Law: (a) xxx xxx (b) arbitral tribunal means a sole arbitrator or a panel of arbitrators. Article 10. Number of arbitrators - (1) The parties are free to determine the number of arbitrators. (2) Failing such determination, the number of arbitrators shall be three. 25. Therefore, the definition of Arbitral Tribunal in Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, or if it is silent as to the mode of arbitration. 32. In the instant case, the arbitration clause 12.2 is silent as to the number of arbitrator. The said clause read with Section 10(2) of the Act makes it very clear that arbitral tribunal in the instant case would be consisting of a sole arbitrator. 33. The learned counsel for the respondent has referred to its policy decision which has been quoted hereinabove. Such policy decision cannot change the contractual clause. In any event the contract between the parties was entered into in 2004. The said policy decision came into effect in 2005. Therefore, the said policy decision cannot in any way override contract between the parties. 34. The parties autonomy in the arbitration agreement must be given due importance in construing the intention of the parties. In so far as reference to the expression `arbitrator(s)' in clause 12.3 is concerned, the same does not in any way affect the intention of the parties in clause 12.2. 35. It is noted in this connection that parties have freedom to change the number of arbitrator even after the contract has been entered and by mutual consent the parties may amend the contract. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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