DELTA MECHCONS (INDIA) LTD. versus M/S MARUBENI CORPORATION

Citation: [2007] 7 S.C.R. 281 · Decided: 18-05-2007 · Supreme Court of India · Bench: P.K. BALASUBRAMANYAN · Disposal: Hearing Adjourned

Judgment (excerpt)

; 
DELTA MECHCONS (INDIA) LTD. 
A 
v. 
MIS MARUBENI CORPORATION 
MAY 18, 2007 
[P.K. BALASUBRAMANY AN, J.] 
B 
Arbitration and Conciliation Act, 1996: 
s. I I-Appointment of Chairman of arbitral tribunal-Arbitration 
agreement providing for appointment of one arbitrator by each party and C 
Chairman of arbitral tribunal to be nominated by the two arbitrators-
Presiding arbitrator not to be of the nationality of contracting parties-Two 
arbitrators so appointed, failed to nominate presiding arbitrator-As per 
agreement when the International Chamber of Commerce was approached, 
it declined to appoint Chairman of arbitration tribunal-Application u/s 11 D 
filed before Chief Justice of India for appointment of presiding arbitrator-
Held: Though parties have agreed that arbitration should be conducted in 
accordance with Rules of Conciliation and Arbitration of the International 
Chamber of Commerce, but agreement to follow Rules of ICC with conduct 
of arbitration proceedings is different from the agreement regarding 
appointment of arbitral tribunal-There is no obligation on parties to E 
undertake before ICC, to have the arbitration in accordance with its 
procedure-The procedure agreed upon the parties to constitute arbitral 
tribunal having broken down, petitioner is justified in approaching the Chief 
Justice of India of appointment of a presiding arbitrator-As per arbitration 
agreement, Chairman of orbitral tribunal has to be of a nationality different F 
form the nationality of contracting parties-It cannot be said that since 
arbitrator was in the circumstances to be appointed by the Chief Justice of 
India or his nominee in terms of s. J l of the Act, the restriction of nationality 
would not apply-Chairman of arbitral to be appointed hos to be a nationality 
different from nationality of either parties-Parties would, therefore, submit 
an agreed name with consent of that person or in case they are not able to G 
agree, they would submit two names each with consent of nominees for being 
considered for appointment as Chairman of arbitral tribunal-Rules of 
Conciliation and Arbitration of the International Chamber of Commerce. 
281 
H 
282 
SUPREME COURT REPORTS 
[2007) 7 S.C.R. 
A 
CIVIL ORIGINAL JURISDICTION : Arbitration Petition No. 11 of 2006. 
B 
c 
(Under Section 11 (6) of the Arbitration and Conciliation Act 1998) 
M.C. Dhingra, Dr. V.K. Agrawal, Sunil Goel and Aarti Topu for the 
Petitioners. 
Harish N. Salve, Sr. Adv., Manu Nair and Viplav Shanna (for Suresh A. 
Shroff & Co.) for the Respondent. 
The Order of the Court was delivered by 
ORDER 
I. The respondent took up the project of construction of a thennal 
power plant at Ramagundam in Karimnagar District of the State of Andhra 
Pradesh. It entered into four sub-contracts with the petitioner relating to that 
work. The general conditions of sub-contracts were to be part of the four 
D separate contracts. The sub-contracts were tenninated on 25.7.2001 with effect 
from 7.8.2001. It appears that there were subsequent discussions between the 
parties and on the basis of ascertainment of the sums due to the petitioner 
the same were paid by the respondent and the petitioner i.n return gave in 
writing that it had received full and final paym(int from the respondent fu . 
tenns of the settlement between the two and also a certificate that all payments 
E against the said four sub-contracts have been made by the respondent to the 
petitioner and received by the petitioner and that no bills are pending with 
the respondent for settlement. After the matters. rested on this basis, the 
petitioner made a claim in respect of the four sub-contracts. The petitioner 
also named an arbitrator and called upon the respondent to name an arbitrator 
in tenns of the arbitration agreement. The respondent disputed ·the claims of 
F the petitioner and pleaded that there was no subsisting claim for the petitioner 
based on any of the four sub-contracts. Even then without prejudice to its · 
contentions the respondent also named an arbitrator. In terms of the arbitration 
agreement, the two nominated.arbitrators had together to name the Chainnan 
ofthe Arbitral Tribunal or the presiding arbitrator. The nominated arbitrators 
failed to do so. 
· 
G 
2. Meanwhile the petitioner had ·also moved the concerned District 
Court under Section 9 of the Arbitration and Conciliation Act seeking what 
it called interim protection pending an arbitration. Four separate applications 
wer

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