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TMI Blog2009 (2) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... n 6 of the 1996 Act, the substitute Arbitrator is to be appointed by the Chief Justice and/or his designate or in accordance with the arbitration agreement. 3. Disputes appear to have arisen in connection with a contract which, inter alia, contained an arbitration clause which is set out herein below for convenience: Arbitration Except where otherwise provided in the contract all question and disputes relating to the meaning of specifications, designs, drawings and instructions herein contained and as to the quality of the workmanship or materials used on the work or as to any other question claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered by the single Judge having determination. If the application succeeds, the single Judge refers the application to the Hon'ble Chief Justice and/or His designate for naming the Arbitrator. 7. After the said application under the 1996 Act, being A.P.No.144 of 2006, was filed in this Court, the respondent appointed an Arbitrator. However, by an order dated November 23, 2007 this Court (Pinaki Chandra Ghose, J) allowed the said application, being A.P.No.l44 of 2006, inter alia holding that it was settled law that once an application was filed in Court for appointment of an Arbitrator by the Chief Justice and/or His designate, the respondent lost its right to appoint an Arbitrator in accordance with the agreement. 8. The Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce: 15(2) - Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. 14. The language and tenor of section 15(2) is significant. Legislature has, in its wisdom, very carefully used the expression the substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced instead of using the expression the substitute arbitrator shall be appointed in accordance with the procedure for appointment laid down in the arbitration agreement executed between the parties. 15. If it were the legislative intention that a substitute arbitrator sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointment of an arbitrator. Only then the right of the opposite party ceases. 18. In Yashwith Construction P. Ltd. v. Simplex Concrete Piles India Ltd. Anr., reported in AIR 2006 SC 2798 the Supreme Court held as follows: Obviously, section 11(6) of the Act has application only when a party or the concerned person had failed to act in terms of the arbitration agreement. When section 15(2) says that substitute arbitrator can be appointed according to the rules that were applicable for the appointment of the arbitrator originally, it is not confined to an appointment under any statutory rule or rule framed under the Act or under the scheme. It only mean that the appointment of the substitute arbitrator must be done according to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n agreement. The judgment was rendered in an appeal arising out of an order of the Andhra Pradesh High Court which is clearly distinguishable in facts. In that case the initial appointment of arbitrator was made by the Managing Director and not by the Chief Justice or his designate. On termination of mandate, the substitute arbitrator had also promptly been appointed. 21. In Union of India v. Bharat Battery Manufacturing Co. (P) Ltd., reported in (2007) 7 SCC 684 cited by Mr. Sen, the Supreme Court relying on its earlier judgment in Punj Lloyd Ltd. v. Petronet MHB Ltd. reported in (2006) 2 SCC 638 and Datar Switchgears Ltd. (supra) held party filed an application under section 11(6) of the Act, the other party extinguished its right to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was liable to be allowed. The proposition that emerges from various judgments referred to above is that an arbitrator must be appointed in accordance with the procedure agreed between the parties. If however the party required, in terms of the agreement, to appoint or to agree to an arbitrator fails to do so within the time stipulated in the agreement and/or in section 11 of the 1996 Act, the other party might request the Chief Justice or his designate to appoint an arbitrator under section 11. Once an application under section 11 is made, the right of the other party to appoint an arbitrator, in accordance with the agreement, gets extinguished. The right under the agreement, of a party, to appoint an arbitrator, which stands extinguished ..... X X X X Extracts X X X X X X X X Extracts X X X X
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