LexACE PIPELINE CONTRACTS PRIVATE LIMITED versus BHARAT PETROLEUM CORPORATION LIMITED
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-f· ACE PIPELINE CONTRACTS PRIV A 1E LIMIIBD A v. BHARAT PETROLEUM CORPORATION LIMIIBD APRIL 4, 2007 [AK MA THUR AND TAR UN CHATTERJEE, JJ.] B • Arbitration and Conciliation Act, 1996: ss.11 & 34-Appointment of Arbitrator-Courts can issue mandamus to c authorities to appoint arbitrators as per the arbitration clause-But choice can go beyond the designated persons or institutions in exceptional cases for reasons to be recorded or where both parties agree for common name- Once a party has entered into an agreement with eyes wide open it cannot plead that if any person nominated in the arbitration clause is appointed as arbitrator he will not be impartial or objective-However, if a party feels that the arbitrator has not acted independently or impartially, or he has suffered D -t from any bias, it can make application under s.34 to set aside the arbitra/ ,. award on the ground that arbitrator acted with bias or malice in law or fact. s.11 (6)-Application under-Held: Period of limitation of thirty days cannot be invoked under s.11 (6). E Appellant and Respondent-Corporation had entered into a contract which contained an arbitration clause in terms of which disputes between the parties were to be referred to the sole arbitration of an officer of the Respondent- Corporation. Some differences arose between the parties on which Appellant requested Respondent-Corporation to appoint an arbitrator. It is alleged that F no one was appointed as arbitrator, pursuant to which Appellant filed application before High Court under Section 11 of the Arbitration and Conciliation Act, 1996 demanding appointment of some retired Judge of the Supreme Cpurt as arbitrator on the ground that if any person nominated in the arbitration clause is appointed, then it may suffer from bias or the G arbitrator may not be impartial or independent in taking decision. High Court dismissed the application. Hence the present appeal r Dismissing the appeal, the Court HELD: 1. A person of any nationality may be appointed as Arbitrator, H 777 -i 778 SUPREME COURT REPORTS (2007] 4 S.C.R. A unless otherwise agreed between the parties. Sub-section (2) of Section 11 says that subject to sub-section (6), the parties are free to agree on a procedure .... for appointing the arbitrator or arbitrators. Sub-section (3) provides that failing any agreement referred to in sub-section (2), one arbitrator can be appointed by each party and the two arbitrators so appointed shall appoint the B third arbitrator who shall act as the presiding arbitrator. Sub-section (4) says that in case a party fails to make appointment within thirty days from the date of receipt of the request to do so from the other party, or that the two appointed arbitrators fail to nominate the third arbitrator within thirty days >- from the date of their appointment, the appointment shall be made by the Chief • Justice or by any person or institution designated by him. Sub-section (5) c says failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, ifthe 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. Therefore, the concept of thirty D days is there in sub-sections (4) & (5). This is in the event the parties did not come to appoint arbitrator or the two nominated arbitrators fail to agree within thirty days for appointment of third arbitrator, application can be moved under Section 11(5) of the Act to the Chief Justice for appointment ofarbitrator. .., .... But in sub-section (6), where, the procedure has already been agreed upon by the parties, as in the present case, and in that event, if a party fails to act as E required under that procedure or the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure or a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may in that event, request the Chief Justice or a person or an institution designated by him to make necessary measures, F unless the agreement on the appointment procedure provides other means for appointment of arbitrator. Therefore, so far as the period of thirty days is concerned, it is not mentioned in Sub-s
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