BALLI PETROCHEMICALS LIMITED versus NATIONAL ALUMINIUM COMPANY LTD.

Citation: [2009] 1 S.C.R. 423 · Decided: 20-01-2009 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Dismissed

Judgment (excerpt)

iii • 
[2009] 1 S.C.R. 423 
BALLI PETROCHEMICALS LIMITED 
A 
v. 
NATIONAL ALUMINIUM COMPANY LTD. 
(Arbitration Petition No. 7 of 2006) 
-; 
·JANUARY 20, 2009 
B 
[TARUN CHATIERJEE, J.] 
• 
Arbitration and Conciliation Act, 1996 - s. 11 (6) - Dispute 
between respondent and petitioner over a global tender -
Arbitration clause in tender provided for appointment of sole c 
.. 
arbitrator - Former Chief Justice of India appointed as sole 
arbitrator - He had resigned - For replacement of earlier 
arbitrator, respondent served upon the petitioner a list/panel 
.+ 
of three names - Petitioner failed to select any one named 
in the list/panel within specified time - Respondent appointed 
D 
"1 
and selected a retired Judge of Delhi High Court as sole 
arbitrator- Petitioner challenged the appointment contending 
that since earlier a former Chief Justice of India had been 
appointed as the sole arbitrator, only a former Chief Justice 
of lridia ought to have been appointed in his place - Held: 
E 
Arbitration clause was very clear - In terms thereof, if was 
open to the respondent to select anyone from the panel of 
j 
three persons in the event the petitioner failed to select any 
·~ 
one of the persons named by respondent within the time 
~ 
specified - Challenge by petitioner cannot be sustained, 
particularly when it did not raise any objection on creditability 
F 
ofthe new arbitrator appointed by respondent. 
J 
The petitioner is a company incorporated in London. 
The respondent is a Government of India undertaking. 
Disputes arose between the parties in respect of the 
G 
..; 
global tender and the purchase order issued by the 
.,. 
respondent pursuant to the tender. 
The arbitration clause enumerated in clause 16 of the 
423 
H 
424 
SUPREME COURT REPORTS 
[2009) 1 S.C.R. 
A tender provided for appointment of a sole Arbitrator. The 
petitioner filed an application under s.11 (6) of the 
Arbitration and Conciliation Act, 1996 for appointment of 
a Sole Arbitrator. A former Chief Justice of India was 
appointed as the Sole arbitrator who entered appearance 
B in the arbitration proceedings but later resigned 
therefrom. 
Subsequently, in terms of the said arbitration clause, 
respondent served upon the petitioner a listfpanel of 
c 
three names, out of which one was to be selected for 
appointment in replacement of the earlier arbitrator, but 
the petitioner failed to appoint or select any one of the 
persons named in t~e list/panel within the time specified. 
Respondent appointed and selected a retired Judge of 
D 
the Delhi High· Court as the sole Arbitrator. 
' 
Before this Court, the Petitioner challenged the 
appointment contending that since earlier a former Chief 
Justice of India had been appointed as the sole arbitrator, 
only a former Chief Justice of India ought to have been 
E appointed in his place. 
Dismissing the arbitration petition, the Court 
HELD: 1. It was open to the respondent to select any 
one from the panel sent by the respondent after the expiry 
F of the period for selecting a person by the petitioner. In 
this case, since the respondent has already exercised the 
arbitration clause and already replaced and selected a 
new sole arbitrator who has already entered appearance, 
there is no reason to replace the appointed arbitrator at 
G this stage when no allegations have been put forward by 
the petitioner against such appointment excepting that 
since a former Chief Justice of India was appointed to 
arbitrate the disputes between the parties, this time also 
arlfclm1ler:itlhfefr•J1Jsticenof!lndta 10'Ughtttoiiffavefbeen 
i-H appointed. [Para 2) (429-G.,H; 430-A-B] 
;. 
BALLI PETROCHEMICALS LIMITED v. NATIONAL 
425 
ALUMINIUM COMPANY LTD. 
1.2. A plain reading of the arbitration clause would 
A 
clearly show that it was solely on the respondent to 
select the person from the panel of three persons in the 
event the petitioner had failed to select any one of the 
persons named by the respondent. In view of the 
aforesaid fact and in view of the fact that the arbitration 
B 
clause was very clear, it would not be necessary to go 
into the details in this matter as the appointment was 
already made and it is only a case of replacement of 
earlier sole arbitrator on the ground of his resignation. 
Therefore, the objections raised by the petitioner cannot c 
be sustained at this stage particularly yvhen the petitioner 
has n~t raised any objection on the creditability of the 
sole arbitrator now ap

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