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TMI Blog2013 (3) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... tor appropriately. The appointment of the arbitrator by the Corporation during the pendency of proceedings u/s 11(6) was of no consequence. In the course of arguments before us, on behalf of the Appellant certain names of retired High Court Judges were indicated to the senior counsel for the Corporation for appointment as sole arbitrator but the Corporation did not agree to any of the names proposed by the Appellant. In the circumstances, we are left with no choice but to send the matter back to the Chief Justice of the Allahabad High Court for an appropriate order on the application made by the dealer u/s 11(6). Civil Appeal is, accordingly, allowed. The impugned order is set aside. Arbitration Case, Deep Trading Co. v. Indian Oil Corporation and Ors., is restored to the file of the High Court of Judicature at Allahabad for fresh consideration by the Chief Justice or the designate Judge, as the case may be, in accordance with law and in light of the observations made above. - R.M. Lodha, Jasti Chelameswar And Madan B. Lokur, JJ. For the Appellant : Amit Sharma, Adv. For the Respondents : Abhinav Vashisht, Sr. Adv., Priya Puri, Sagar Singhal and Anuj Malhotra, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition before this Court but that was dismissed on 06.12.2004 being an interlocutory order. 8. On or about 06.12.2004, the dealer moved the Chief Justice of the Allahabad High Court under Section 11(6) for the appointment of an arbitrator as the Corporation had failed to act under the agreement. While the said proceedings were pending, on 28.12.2004, the Corporation appointed Shri B. Parihar, Senior Manager, (LPG Engineering) of its U.P. State Office as the sole arbitrator. 9. When the above application came up for consideration, the Chief Justice found no reason to appoint the arbitrator, as sought by the dealer, since the arbitrator had already been appointed by the Corporation. The brief order dated 06.12.2007, by which the dealer's application under Section 11(6) was dismissed by the Chief Justice of the Allahabad High Court, reads as under: 1. Heard Mr. Siddharth Singh, in support of this application and Mr. Prakash Padia, Learned Counsel appearing for the Respondents. 2. The dispute in this matter is regarding suspension of the Petitioner's agency as a kerosene dealer for sometime. The applicant applied for appointment of an arbitrator by writing a letter i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shall apply to the arbitration proceeding under this clause. The award shall be made in writing within six months after entering upon the reference or within such extended time not exceeding further four months as the sole arbitrator shall by a writing under his own hands appoint. 11. Sub-sections (1), (2), (6) and (8) of Section 11 are relevant for consideration of the present matter which read as follows: 11. Appointment of arbitrators.-(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties. (2) Subject to Sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators. (3) to (5) xxx (6) Where, under an appointment procedure agreed upon by the parties,- (a) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators, fail to reach an agreement 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason to appoint any fresh arbitrator since the arbitrator has been appointed by the Corporation. 15. Mr. Abhinav Vashishta, learned senior counsel for the Respondents, on the other hand, relied upon a decision of this Court in Northern Railway Administration, Ministry of Railway, New Delhi v. Patel Engineering Co. Limited (2008) 10 SCC 240 and submitted that while considering application under Section 11(6) for appointment of arbitrator, the Court must keep in view twin requirements of Section 11(8) and, seen thus, the view of the learned Chief Justice in the impugned order does not call for any interference. 16. In Datar Switchgears Ltd. v. Tata Finance Ltd. and Anr. (2000) 8 SCC 151, a two-Judge Bench of this Court considered the scheme of Section 11, noted the distinguishing features between Section 11(5) and Section 11(6) and then considered the question whether in a case falling under Section 11(6), the opposite party cannot appoint an arbitrator after the expiry of thirty days from the date of demand. This Court held that in cases arising under Section 11(6), if the opposite party has not made an appointment within thirty days of the demand, the right to make appointm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of this Court considered the scheme of Section 11. Insofar as Section 11(8) is concerned, this Court stated that appointment of the arbitrator or arbitrators named in the arbitration agreement is not a must, but while making the appointment the twin requirements mentioned therein have to be kept in view. 20. If we apply the legal position exposited by this Court in Datar Switchgears Ltd. v. Tata Finance Ltd. and Anr. (2000) 8 SCC 151 to the admitted facts, it will be seen that the Corporation has forfeited its right to appoint the arbitrator. It is so for the reason that on 09.08.2004, the dealer called upon the Corporation to appoint the arbitrator in accordance with terms of Clause 29 of the agreement but that was not done till the dealer had made application under Section 11(6) to the Chief Justice of the Allahabad High Court for appointment of the arbitrator. The appointment was made by the Corporation only during the pendency of the proceedings under Section 11(6). Such appointment by the Corporation after forfeiture of its right is of no consequence and has not disentitled the dealer to seek appointment of the arbitrator by the Chief Justice under Section 11(6). We answ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s having worked its course. According to the arbitration clause, sole arbitrator would be ED(NR) or his nominee and no one else. In the circumstances, it was not open to either of the parties to unilaterally appoint any arbitrator for resolution of the disputes. Sections 11(6)(c), 13 and 15 of the 1996 Act have no application in light of the reasons indicated above. 23. We are afraid that what has been stated above has no application to the present fact situation. In Newton Engineering and Chem. Ltd. v. Indian Oil Corporation Ltd. and Ors. Civil Appeal No. 7587 of 2012; Decided on 18.10.2012, this Court was not concerned with the question of forfeiture of right of the Corporation for appointment of an arbitrator. No such argument was raised in that case. The question raised in Newton Engineering and Chem. Ltd. v. Indian Oil Corporation Ltd. and Ors. Civil Appeal No. 7587 of 2012; Decided on 18.10.2012 was entirely different. In the present case, the Corporation has failed to act as required under the procedure agreed upon by the parties in Clause 29 and despite the demand by the dealer to appoint the arbitrator, the Corporation did not make appointment until the application was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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