Arbitration

Topics: Judge, Arbitration, Court Pages: 5 (1661 words) Published: September 24, 2013
CASE ANALYSIS WITH RESPECT TO SECTION 11 OF THE ARBITRATION AND CONCILIATION ACT, 1996 The success of arbitration largely depends upon the selection of fair, impartial and competent arbitrator. The arbitrator is a creature of agreement between the parties. The parties are given the choice to agree between them, the procedure of appointment of Arbitrator and the number of Arbitrators to be appointed. It is subject to some regulations by law. In the absence of an agreement between the parties with respect to appointment of Arbitrator, the law provides a body of rules to fill the void. The Act of 1940 provided for appointment of Arbitrator or Umpire under Section 8 on various grounds by Court. The important changes made, apart from removing the role of Civil Court from the appointed procedure, in the new Act. In the present Act, there is no provision for notice and hearing by the Court. The same is done away with. It would imply that challenge regarding the services of notices or ancillary matters would not at all require the judicial scrutiny before the appointment is made. The cases regarding the same are as follows:

1) Konkan Railway Corporation Limited v. Rani Construction Ltd In Ador Samia Private Limited Vs. Peekay Holdings Limited & Ors. [1999], the court had held that the order of the Chief Justice or his designate in exercise of the power under Section 11 of the Arbitration Act was an administrative order and that such order was not amenable to the jurisdiction of Supreme Court under Article 136. The decision of the Bench of the three learned Judges affirmed this view in Konkan Railway Corporation Ltd. & Ors. Vs. Mehul Construction Co., [2000]. Thereafter, in the present case, a Bench of two learned Judges referred to a larger Bench the decision of the three learned Judges for re-consideration. This is how the matter came to before a Constitution Bench. Two issues which were to be decided in this case was- Whether such an order was a judicial order or an administrative order Does the Chief Justice or his nominee, acting under Section 11, have the authority to decide any contentious issues between the parties to the alleged arbitration agreement? A related question was-

Even if the said order is held to be administrative in nature what is the remedy open to the person concerned if his request for appointment of an arbitrator is turned down by the learned Chief Justice or his nominee, for some reason or other?

HELD:
The Court observed-
The three Judge Bench noted that the Act was based upon the UNCITRAL Model framed by the Commission on International Trade Law established by the United Nations. It said that if a comparison was made between the language of Section 11 of the Act and Article 11 of the Model Law it was apparent that the Act had designated the Chief Justice of a High Court in cases of domestic arbitration and the Chief Justice of India in cases of international commercial arbitration to be the authority to perform the function of appointment of an arbitrator whereas under the Model Law that power had been vested in the court. When the matter is placed before the Chief Justice or his designate under Section 11 it was not appropriate for the Chief Justice or his designate to entertain any contentious issues between the parties and decide the same. 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 arbitration proceedings to commence. A bare reading of Sections 13 and 16 made it clear that questions with regard to the qualifications, 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...
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