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Judgment
P. Sathasivam, J.—Aggrieved by the orders passed by Hon''ble Chief Justice or his nominee Judge in Original Petitions filed u/s 11 of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as ""the Act""), appointing Arbitrators, Central Government organisations, namely,
Telecom Department, Southern Railway, Western Railway, Rajiv Gandhi National Institute, etc., have filed the above writ petitions.
When the above Writ Petitions came up for final hearing before K.P. Sivasubramanian, J., on 7-6-2005, the learned Judge, after referring to the
several grounds raised by the petitioners as well as contesting respondents and the decision of the Supreme Court on the issues raised, found that
the questions raised for consideration pertain to very important issues of interpretation of the provisions of the Act as well as interpreted by the
Supreme Court and have impact not only on all these writ petitions, but also several Original Petitions pending before this Court for appointment of
Arbitrators, and desired that these petitions be heard by a Larger Bench. Pursuant to the same on the orders of the Honourable Chief Justice, the
above Writ Petitions were heard by us.
Since the writ petitioners-Central Government Organisations have raised similar and identical contentions in all these writ petitions, for
convenience we shall refer the factual details as stated in Writ Petition No. 26438 of 2004. According to the petitioners, namely, Madurai
Secondary Switching Area, Department of Telecommunication, now Bharat Sanchar Nigam Ltd., (BSNL), Madurai-2, a Tender for compiling,
printing, binding and supplying copies of Madurai Secondary Switching Area Main directory, Numerical Index, Supplementary Directories and
billing information for a total 5 consecutive annual issues of the said Directory commencing with 1993 issue, all of which will be printed in English.
Pursuant to the notice inviting tender, the first respondent, namely, Sesa Seat Information Systems Ltd., Pune submitted the offer and after process,
the Tender to the first respondent was awarded. Thereafter, the first respondent has entered into an agreement on 29-07-1998 with the first
petitioner.
The first respondent failed to deliver the printed directories and thereafter a dispute arose between the first petitioner and the first respondent. In
view of the said agreement and also in view of Clause No. 38.1, if there is any dispute or difference under the said agreement, the same shall be
referred to the sole Arbitration of concerned Member of the Telecom Board. By letter dated 11-07-1998, the first respondent sought for
appointment of an Arbitrator. Since the petitioners have not appointed the Arbitrator, the first respondent herein filed O.P.No.802 of 1998 before
this Court u/s 11(4) of the Arbitration and Conciliation Act, 1996. The Honourable Chief Justice was pleased to appoint Mr. Justice K. Sampath,
a retired Judge of this Court (second respondent herein) as Arbitrator to resolve the dispute. As per clause No. 38.1 of the Agreement dated 29-
07-1993, the Departmental Arbitrator alone should be appointed and not any other person. Contrary to the said clause, the second respondent
herein has been appointed. Aggrieved by the said order of the Hon''ble Chief Justice dated 26-03-2004, the petitioners herein having no other
remedy except to approach this Court under Article 226 of the Constitution of India, filed the present writ petition. Similar averments have been
made in the other writ petitions.
Heard Mr. V.T. Gopalan, Additional Solicitor General of India for most of the petitioners and Mr. M. Vaidyanathan for petitioner in W.P.No.
15230/2005 and Mr. Vijaynarayan, learned senior counsel, Mrs. Chitra Sampath and Mr. Amalraj for contesting respondents. Mr. M.K. Kabir
also assisted the Court by placing relevant materials.
The following provisions in the Arbitration and Conciliation Act, 1996 are relevant:-
Section 5. Extent of judicial intervention.- Notwithstanding anything contained in any other law for the time being in force, in matters governed by
this Part, no judicial authority shall intervene except where so provided in this Part.
Section 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) Failing any agreement referred to in
Sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the
third arbitrator who shall act as the presiding arbitrator. (4) If the appointment procedure in Sub-section (3) applies and- (a) a party fails to appoint
an arbitrator within thirty days from the receipt of a request to do so from the other party; or (b) the two appointed arbitrators fail to agree on the
third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Chief Justice or
any person or institution designated by him.
(5) Failing any agreement referred to in Sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within
thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the
Chief Justice or any person or institution designated by him. (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 the agreement on the appointment
procedure provides other means for securing the appointment.
(7) to (12) xx xx xx Section 12. Grounds for challenge.- (1) xx xx (2) xx xx (3) An arbitrator may be challenged only if- (a) circumstances exist
that give rise to justifiable doubts as to his independence or impartiality, or (b) he does not possess the qualifications agreed to by the parties.
(4) A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes
aware after the appointment has been made. Section 16. Competence of arbitral tribunal to rule on its jurisdiction.- (1)
to (5) xx xx xx (6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance
with Section 34.
Section 34. Application for setting aside arbitral award.- (1) xx xx (2) An arbitral award may be set aside by the Court only if- (v) the composition
of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with
a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; .. ..
(i) Mr. V.T. Gopalan, learned Additional Solicitor General of India by drawing our attention to specific clause/clauses in the agreement for
appointment of arbitrator/arbitrators, would contend that either from officers of the concerned or independent arbitrator, the parties would be
bound by such agreement and neither of the parties would be allowed to resile. He further contended that a conjoint reading of Section 11(2) and
(6) of the Act makes it clear that there is no time stipulated for appointment of an arbitrator and the question of 30 days as per Section 11(3) and
(4) cannot be applied to a case governed by Section 11(2) and (6). In other words, according to him, the time taken for appointment of an
Arbitrator should be reasonable. In any event, according to him, neither the Chief Justice nor the designated Judge have power to appoint any
independent Arbitrator by passing the arbitration clause agreed to between the parties. He finally contended that inasmuch as the order passed by
the Chief Justice and the designated Judge is administrative in nature, the writ would lie.
ii) Countering the above arguments, Mr. Vijaynarayan, learned senior counsel and other counsel appearing for respondents, submitted that if an
application is made, one of the parties to the agreement, after expiry of the period prescribed therein and in the absence of any response from
other party, the Chief Justice or designated Judge has ample power to appoint independent arbitrator. He further contended that once arbitrator is
appointed, in view of the statutory provisions, namely, Sections 5, 12 and 13, the said order cannot be interfered by any Court. In other words,
according to him, once discretion is exercised, the same cannot be interfered by any one including by way of a judicial order. He also submitted
that if the party or parties satisfied the conditions as per the terms of the agreement, the Chief Justice or designated Judge is free to appoint any one
or body as Arbitrators and interference with the said orders is not permitted.
Learned Additional Solicitor General in support of his arguments has relied on the following decisions:-
i) Bhupinder Singh Bindra Vs. Union of India and another, .
ii) Judgment of the Supreme Court in Civil Appeal No. 13076/1996 (Union of India v. Vijay Kumar garg.) iii) Subhash Projects and Marketing
Ltd. Vs. South Eastern Coalfields Limited,
iv) Datar Switchgears Ltd. Vs. Tata Finance Ltd. and Another,
v) Order made in O.P.No.815/1999 of High Court,Madras (Premiere Infrastructure Ltd.,v. Union of India)
vi) 2000(2) RAJ 487 (Del) (Essel Shyam Communicaiton Ltd., v. Union of India)
vii) 2000 3 RAJ 252 Madhya Pradesh (Ashok Coal Depot v. South-Eastern Coal Fields Ltd.)
viii) 2001 2 ALR 215 (Bel House Associates (P) Ltd., v. Gm, Southern Railway)
ix) Kamala Solvent Vs. Manipal Finance Corporation Ltd., Manipal and Others,
x) 2001.4 RAJ 243 (Delhi) (Vindhya Telelinks Ltd., v. Department of Telecommunicaitons )
xi) Order made in O.P.No.28385/2001 of High Court of Kerala (Union of India v. M.O. Simon)
xii) Order made in O.P.No.7412/2003 of High Court of Kerala (General Manager, Southern Railway, Chennai v. Ms. Chandragiri Construction
Company)
xiii) 2002 .4 RAJ 437 (Kar) (J.L. Prasad v. General Manager, Southern Railway, Chennai)
xiv) Union of India (UOI) and Another Vs. Sohan Lal Puglia,
xv) 2004 10 SCC 504 (Union of India v. M.P. Gupta)
Now we shall analyse these decisions one by one. The first case, namely, Bhupinder Singh Bindra Vs. Union of India and another, is a case
decided under the Arbitration Act, 1940 (old Act). In view of the repealing of the said Act and enactment of new Arbitration and Conciliation Act,
1996, adding various new clauses, the said decision rendered under old Act is not directly on the point. The next one, namely, judgement of the
Supreme Court in Civil Appeal No. 13076/96 is also of the same effect, since the same relates to old Act.
The third one, namely, Subhash Projects and Marketing Ltd. Vs. South Eastern Coalfields Limited, is a judgement by a learned Single Judge
of Madhya Pradesh High Court, relates to an order passed in an application filed u/s 11 of the Act. Likewise, the order of this court in O.P.No.
815/99; 2000 II RAJ 487 (Delhi); 2000 III Raj 252 (MP); 20 01 II ALR 215; 2001 IV RAJ 243 (Delhi); 2002 Vol.IV RAJ page 437
(Karnataka) all relate to orders passed in applications filed u/s 11 of the 1996 Act. It is not in dispute that an order of Chief Justice or designated
Judge is an administrative order, hence the same cannot be challenged in an appeal. However, as held in State of Orissa and Others Vs.
Gokulananda Jena, , an order made by the Designated judge, being an administrative order is amenable to writ jurisdiction under Article 226 of the
Constitution. In the light of the fact that the said orders were passed in applications filed u/s 11 of the Act, the same need not be considered.
The other decisions, namely, order made in O.P. No. 28385/2001 (High Court of Kerala), order made in O.P.No. 7412/2003 (High Court of
Kerala) are consent orders and the same cannot be cited as a binding precedent. The other two decisions, namely, Union of India (UOI) and
Another Vs. Sohan Lal Puglia, ; and 2004 Volume X SCC 504 (cited supra) also arose under old Act. Except the decision of the Supreme Court
reported in 2000 8 SCC 151 (cited supra), all other decisions relied on by the learned Additional Solicitor General are either under the old Act or
the orders were passed on consent of both parties or administrative orders passed in an application filed u/s 11 of the Act.
In Datar Switchgears Ltd. Vs. Tata Finance Ltd. and Another, , the respondent made the appointment before the appellant filed application u/s
11(6). But the said appointment was made beyond 30 days. The question is, whether in a case falling u/s 11(6), the opposite party cannot appoint
an arbitrator after the expiry of 30 days from the date of demand. The following conclusion of Their Lordships is relevant: (para 19)
Para 19. So far as cases falling u/s 11(6) are concerned such as the one before us no time limit has been prescribed under the Act, whereas a
period of 30 days has been prescribed u/s 11(4) and Section 11(5) of the Act. In our view, therefore, so far as Section 11(6) is concerned, if one
party demands the opposite party to appoint an arbitrator and the opposite party does not make an appointment within 30 days of the demand, the
right to appointment does not get automatically forfeited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of
the demand, but before the first party has moved the court u/s 11, that would be sufficient. In other words, in cases arising u/s 11(6), if the
opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an
appointment has to be made before the former files application u/s 11 seeking appointment of an arbitrator. Only then the right of the opposite
party ceases. We do not, therefore, agree with the observation in the above judgments that if the appointment is not made within 30 days of
demand, the right to appoint an arbitrator u/s 11(6) is forfeited. 20.xxx xx 21.xxx xx 22. While interpreting the power of the court to appoint an
arbitrator u/s 8 of the Arbitration Act, 1940, this Court in Bhupinder Singh Bindra Vs. Union of India and another, in para 3 held as under: (SCC
p.330)
It is settled law that court cannot interpose and interdict the appointment of an arbitrator, whom the parties have chosen under the terms of the
contract unless legal misconduct of the arbitrator, fraud, disqualification etc. is pleaded and proved. It is not in the power of the party at his own
will or pleasure to revoke the authority of the arbitrator appointed with his consent. There must be just and sufficient cause for revocation.
When parties have entered into a contract and settled on a procedure, due importance has to be given to such procedure. Even though rigor of
the doctrine of freedom of contract has been whittled down by various labour and social welfare legislation, still the court has to respect the terms
of the contract entered into by parties and endeavour to give importance and effect to it. When the party has not disputed the arbitration clause,
normally he is bound by it and obliged to comply with the procedure laid down under the said clause.
It is clear from the above decision that in so far as matters relating to Section 11(6), if one party demands opposite party to appoint an
arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appointment does not get automatically
forfeited after expiry of 30 days. However, if action was taken before the first party has moved the Court u/s 11, the same would be acceptable.
Now we shall consider whether the writ petition questioning the order of Chief Justice or designated Judge is maintainable under Article 226 of
the Constitution of India as discussed in State of Orissa and Others Vs. Gokulananda Jena, . In that appeal, the State of Orissa has challenged the
validity of the order made by the Judge designated by the Chief Justice of the said Court for appointment of an arbitrator u/s 11(6) of the Act by
way of a writ petition. The High Court after referring to a judgement of the Supreme Court delivered by a Constitutional Bench in the case of
Konkan Railway Corporation Ltd. and Another Vs. Rani Construction Pvt. Ltd., came to the conclusion that a writ petition under Article 226 of
the Constitution of India questioning the correctness of an order made by a designated Judge u/s 11(6) of the Act is not maintainable, because the
said order is an administrative order and the Supreme Court in the case of Konkan Railway (cited above) has held that such an order cannot be
challenged before it under Article 136 of the Constitution of India. Drawing an analogy from the said judgment, the High Court came to the
conclusion that even a writ petition under Article 226 of the Constitution of India will not be maintainable. The said conclusion of the Orissa High
Court was not accepted by the Supreme Court. The following conclusion in para 6 and 8 is relevant:
It is to be noted that an administrative order is amenable to the writ jurisdiction under Article 226 of the Constitution of India and we find that
such an order made by the Designated Judge u/s 11(6) of the Act is not an exception to this rule. The power of the High Court under Article 226
to entertain a writ petition cannot be equated with the power of the Supreme Court to entertain an appeal under Article 136 of the Constitution of
India. The power of the High Court to entertain a writ petition is an original power while power of this Court while entertaining an appeal under
Article 136 of the Constitution is an appellate power.
However, we must notice that in view of Section 16 read with Sections 12 and 13 of the Act, as interpreted by the Constitution Bench of this
Court in Konkan Railway Corporation Ltd. and Another Vs. Rani Construction Pvt. Ltd., almost all disputes which could be presently
contemplated can be raised and agitated before the arbitrator appointed by the Designated Judge u/s 11(6) of the Act. From the perusal of the
said provisions of the Act, it is clear that there is hardly any area of dispute which cannot be decided by the arbitrator appointed by the Designated
Judge. If that be so, since an alternative efficacious remedy is available before the arbitrator, a writ court normally would not entertain a challenge
to an order of the Designated judge made u/s 11(6) of the Act which includes considering the question of jurisdiction of the arbitrator himself.
Therefore, in our view even though a writ petition under Article 226 of the Constitution is available to an aggrieved party, ground available for
challenge in such a petition is limited because of the alternative remedy available under the Act itself.
The above decision makes it clear that a writ petition under Article 226 of the Constitution of India is maintainable as against the order made by the
Chief Justice or Designated Judge u/s 11(6) of the Act on limited grounds. To make it clear that even if writ petition is maintainable in view of
Sections 16 read with Sections 12 and 13, almost all disputes can be raised and agitated before the Arbitrator and normally the writ court would
not entertain a challenge to an order of appointment made by the Chief Justice or the Designated Judge.
Now let us consider the decisions relied on by Mr. Vijaynarayan, learned senior counsel. Like the learned Additional Solicitor General, he also
relied on the judgement of the Supreme Court in Datar Switchgears Ltd. Vs. Tata Finance Ltd. and Another, . Following the Datar Switchgear
case (supra), it was held in Nucon India (P) Ltd. Vs. Delhi Vidyut Board (Desu), , that an appointment has to be made by the opposite party of an
arbitrator before filing of the application u/s 11(6) of the Act. It was also held that if the appointment is made after the filing of the application u/s
11, then such an appointment is a nullity and in fact no appointment in the eye of law. It is non est. The following conclusion in Konkan Railway
case has been heavily relied on: (para 17, 19 and 21)
17..The decision of the Chief Justice or his designate is final. In nominating an arbitrator the Chief Justice or his designate must have regard to the
qualifications required of the arbitrator in the agreement between the parties and to other considerations that will secure the nomination of an
independent and impartial arbitrator.
19.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 would take due care to see that a competent, independent and impartial arbitrator is
nominated.
It might also be that in a given case the Chief Justice or his designate may have nominated an arbitrator although the period of thirty days had
not expired. If so, the Arbitral Tribunal would have been improperly constituted and be without jurisdiction. It would then be open to the aggrieved
party to require the Arbitral Tribunal to rule on its jurisdiction. Section 16 provides for this. It states that the Arbitral Tribunal may rule on its own
jurisdiction. That the Arbitral Tribunal may rule on any objections with respect to the existence or validity of the arbitration agreement shows that
the Arbitral Tribunals authority u/s 16 is not confined to the width of its jurisdiction, as was submitted by learned counsel for the appellants, but
goes to the very root of its jurisdiction. There would, therefore, be no impediment in contending before the Arbitral Tribunal that it had been
wrongly constituted by reason of the fact that the Chief Justice or his designate had nominated an arbitrator although the period of thirty days had
not expired and, therefore, it had no jurisdiction.
The above decision makes it clear that even Arbitral Tribunal can rule on its jurisdiction.
In O.P.No.705/2004 dated 07-01-2005, N.V. Balasubramanian, J., of this Court, following the decision of the Supreme Court in Datar
Switchgears Limited and other subsequent decisions, held that the power of the respondents to appoint an arbitrator in terms of clause 35 of the
agreement would not cease on the expiry of 30 days from the date of the receipt of the notice, but their power would be lost on the date the
petitioner approached this Court and presented the necessary petition for appointment of an arbitrator.
In Hythro Power Corporation Ltd. Vs. Delhi Transco Ltd., , after reiterating the decision in Konkan Railway Corporations case (supra), the
Hon''ble Supreme Court has held that the Chief Justice or his Designate u/s 11 exercised purely administrative functions and it is not open to him to
discharge any judicial function of adjudicating the dispute even regarding the existence of arbitration agreement. They further held that the power
that is exercised by the nominee of the Chief Justice u/s 11 of the Act is in the nature of an administrative order. It is also clear from the above
decision that even if there is any infirmity in the arbitration clause, it had to be adjudicated by the very Arbitral Tribunal after a reference is made to
it being so constituted and it is not for the ICA or the learned Judge in the High Court to undertake this impermissible adjudicatory task of
adjudicating highly contentious issues between the parties.
Now we shall consider the decisions relied on by Mr. M. Vaidyanathan, learned counsel appearing for the petitioner in W.P.No. 15230/2005
and Mrs. Chitra Sampath appearing for some of the respondents. In Banwari Lal Kotiya Vs. P.C. Aggarwal, , while considering Arbitration Act,
1940, the Supreme Court has held that in our view resort to Section 20 of the Arbitration Act on the part of the appellant before approaching the
Arbitrators for adjudication was unnecessary and the award was and is binding on the respondent.
In S. Rajan Vs. State of Kerala and another, in para 12 it has been held that only in cases where the agreement does not specify the arbitrator
and the parities cannot also agree upon an arbitrator, does the court get the jurisdiction to appoint an arbitrator.
The decisions cited by Mr. Amalraj, learned counsel appearing for some of the respondents would show that if a duty is cast on a party to
appoint an Arbitrator and despite demand he fails to respond, he can still appoint prior to the opposite party invoking the provisions of Section
11(6) of the Act. Thereafter, the right to appoint cannot be exercised. On the failure of the appointing authority to Act as required under agreed
procedure, it is the duty of the Chief Justice or His designate to appoint an Arbitrator. On the failure of the appointing authority to nominate an
Arbitrator, the defence of non-arbitrability of the dispute would fall within the realm of the Arbitrator for decision and it will not take away the right
to reference.
Mrs. Chitra Sampath, learned counsel appearing for some of the respondents, has also referred to various decisions in support of her claim
which is similar to the stand taken by Mr. Vijaynarayan. In Food Corporation of India Vs. Thakur Shipping Co. and Others, it has been held that
where a party to an arbitration agreement chooses to maintain silence in the face of repeated requests by the other party to take steps for
arbitration, the case is not one of mere inaction. Failing to act when a party is called upon to do so is a positive gesture signifying unwillingness or
want of readiness to go to arbitration. In G. Ramachandra Reddy and Co. Vs. Chief Engineer, Madras Zone, Military Engineering Service, , it was
held that the Court should endeavour that the contract should always be given effect to, though the contracting party had failed to act according to
contract. It is to be seen, whether the contract provided for the appointment of a named arbitrator, and if so, the parties normally would be bound
by the terms of contract and the Court would not be justified to appoint any arbitrator unless the arbitrator refused or neglected to enter upon the
reference, etc. In the absence of any named arbitrator it would be open to the contracting parties to agree for an appointment of an arbitrator by
agreement even after the proceedings were laid in the Court u/s 20 of the Act. In the absence of any such agreement, the Court gets jurisdiction
and power to appoint an arbitrator. Thus when the notice was given to the opposite contracting party to appoint an arbitrator in terms of the
contract and if no action had been taken, it must be deemed that he neglected to act upon the contract. When no agreement was reached, even in
the Court between the parties, the Court gets jurisdiction and power to appoint an arbitrator. Finally, it was concluded that even if Section 8(a) per
se does not apply, notice was an intimation to the opposite contracting party to act upon the terms of the contract and his/its non-availment entails
the forfeiture of the power to appoint an arbitrator in terms of the contract and gives right to the other party to invoke the Courts jurisdiction u/s
20.
Mr. M.K. Kabir who volunteered and assisted the Court, has also cited decisions of various High Courts and the Supreme Court. On a
reading of the decisions, it shows that if a duty is cast on a party to appoint an Arbitrator and despite demand he fails to respond, he can still
appoint prior to the opposite party invoking the provisions of Section 11(6) of the Act. Thereafter, the right to appoint cannot be exercised. On the
failure of the appointing authority to Act as required under the agreed procedure, it is the duty of the Chief Justice or His designate to appoint an
Arbitrator. On the failure of the appointing authority to nominate an Arbitrator, the defence of non arbitrability of the dispute would fall within the
realm of the Arbitrator for decision and it will not take away the right to reference. When the authorised person under a contract fails to appoint the
Arbitrator in accordance with the conditions of contract, then he has abdicated his power to appoint. The order of the Chief Justice or his
designate appointing an Arbitrator u/s 11(6) of the Act is not amenable to the jurisdiction under Article 226 of the Constitution. A challenge to an
order of appointment passed by the designated Judge can be made through writ petition but since alternate efficacious remedy is available writ
court will not entertain the challenge. However, intervention by writ court under Article 226 would be possible if the designated Judge has failed to
or refused to appoint an arbitrator only. In administrative decision judicial review is permissible to see whether there is any infirmity in the decision
making process and not in the decision itself.
From the above mentioned decisions of the High Courts and the Supreme Court, the following principles emerged:-
i. If the conditions of contract or the arbitration clause appended thereto envisages that a particular person/authority should appoint an Arbitrator,
to decide the dispute and differences which have arisen in the contract, within a time-frame stipulated therein, then, he is bound to comply with the
stipulation.
ii. If the appointing authority fails to do so, then, the other party has the right to move the Chief Justice or Designated Judge for appointment of the
Arbitrator u/s 11 of the Arbitration and Conciliation Act, 1996.
iii. If prior to filing the petition u/s 11 of the Act, the appointing authority appoints the arbitrator as stipulated in the Agreement, then, the said
reference is valid.
iv. Once the petition for appointment is filed before the Court, then, the other party abdicates its right to appoint the Arbitrator as per the
provisions stipulated under the Agreement or in terms of the Arbitration clause and the court alone has the power to appoint.
v. While so appointing the Arbitrator, the Court is not bound to appoint the person/panel stated by the respondent as arbitrators and the court can
appoint any independent and impartial arbitrator.
vi. The appointment so made, though it is an Administrative Order, is not open to challenge through a writ petition as judicial review is permissible
only to see whether there is any infirmity in the decision making process and not in the decision itself. Even if writ is maintainable, yet, in view of
Section 16 read with Sections 12 and 13 almost all disputes can be raised and agitated before the Arbitrator and as the above alternate efficacious
remedy is available writ court will not entertain a challenge to the appointment made by the Chief Justice or Designated Judge.
vii. It is only where the Chief Justice or the Designated Judge fails to appoint an Arbitrator as per the Agreement or Arbitration Clause appended
thereto, a challenge under Article 226 of the Constitution will be entertained by the Writ Court.
viii. While appointing the Arbitrator the Chief Justice or the Designated Judge cannot decide any contentious issues as the challenge procedure
contemplated under the Act empowers the Arbitrator to decide all disputes including the Constitution of the Tribunal, its `jurisdiction, the existence
of the Arbitration clause etc., and any such decision is open to challenge u/s 34 of the Arbitration and Conciliation Act, 1996.
ix. The intention of the legislature while enacting the Arbitration and Conciliation Act, 1996 was to minimize the supervisory role of courts from
appointment to the passing of the Award.
In most of the cases, it is demonstrated before us that the other party has not either replied to the notice or filed any counter in the petition filed
u/s 11(4) of the Act seeking for appointment of an Arbitrator. Further, only after satisfying all pre-requisites for invocation of Arbitration and
Conciliation Act, 1996, the Chief Justice or his Designated Judge appointed the Arbitrator. It is also brought to our notice that the other party has
not referred the matter to arbitration till such time, another party can approach this court by filing petition. It is further stated that though it is a
named Arbitrator, in view of the fact that in spite of one party making demand for appointment of Arbitrator, the other party has not responded
and referred the matter to the named Arbitrator, we are of the view that the applications filed before the Chief Justice or Designated Judge for
appointment of independent and impartial Arbitrator cannot be faulted with.
In the light of our discussion, and in view of the principles as enunciated by the High Courts and the Supreme Court in various decisions cited
supra, we do not find any merit in these petitions; accordingly all the petitions are dismissed. No costs. All the connected W.P.Ms., are closed.