IBI CONSULTANCY INDIA PRIVATE LIMITED versus DSC LIMITED

Citation: [2018] 3 S.C.R. 1027 · Decided: 16-04-2018 · Supreme Court of India · Bench: R.K. AGRAWAL · Disposal: Disposed off

Judgment (excerpt)

A
B
C
D
E
F
G
H
1027
IBI CONSULTANCY INDIA PRIVATE LIMITED
v.
DSC LIMITED
(Arbitration Case (C) No. 53 of 2016)
APRIL 16, 2018
[R. K. AGRAWAL AND S. ABDUL NAZEER, JJ.]
Arbitration and Conciliation Act, 1996 – s.11(6) r/w s.11(9)
– Appointment of arbitrator –  The scope under s.11(6) read with
s.11(9) is very limited to the extent of appointment of Arbitrator –
The Court has to see whether there exists an Arbitration Agreement
between the parties – While deciding the question of appointment
of Arbitrator, court has not to touch the merits of the case as it may
cause prejudice to the case of the parties – In the instant case,
arbitration clause existed in the contract – Accordingly, sole
arbitrator appointed to  adjudicate the disputes.
Disposing of interlocutory application and petitions, the
Court
HELD: 1. The first and the foremost thing is the existence
of an arbitration agreement between the parties to the petition
under Section 11 of the Act and the existence of dispute(s) to be
referred to Arbitrator is condition precedent for appointing an
Arbitrator under Section 11 of the Act. While deciding the
question of appointment of Arbitrator, court has not to touch the
merits of the case as it may cause prejudice to the case of the
parties. The scope under Section 11(6) read with Section 11(9) is
very limited to the extent of appointment of Arbitrator.   Perusal
of contract showed that arbitration clause did exist in the Contract.
[Paras 7, 9][1030-D-E; 1031-F, G]
2. It is a cardinal principle of the Arbitration and Conciliation
Act that the parties are free to decide the number of arbitrators,
provided, it is an odd number, as well as the procedure for
appointing them. However, if the parties are not able to agree on
the said procedure, or constitute the Arbitral Tribunal to their
mutual satisfaction, either of the party has an option to route to
an appropriate remedy under Section 11 of the Act, which provides
[2018] 3 S.C.R. 1027
1027
A
B
C
D
E
F
G
H
1028
SUPREME COURT REPORTS
[2018] 3 S.C.R.
detailed machinery for appointment of Arbitrator through judicial
intervention.  Accordingly, Justice Amitava Roy, a former Judge
of this Court, is appointed as the sole Arbitrator to adjudicate
the disputes between the parties on such fees he may fix. The
said appointment is subject to the necessary disclosure being
made under Section 12 of the Act and the Arbitrator not being
ineligible under Section 12(5) of the Act. [Paras 10-11][1031-G-
H; 1032-A-B]
CIVIL ORIGINAL JURISDICTION: Arbitration Case (C) No.
53 of 2016.
Under Section 11(5), 11(6) (a) read with Sections 11(9) & 11(12)
(a) of the Arbitration and Conciliation Act, 1996.
WITH
Arbitration Case (C) Nos. 63, 54 and 57 of 2016
Rakesh Kumar, Ms. Preeti Kashyap, P. K. Sachdeva (For
Shibashish Misra), Merusagar Samantaray, Advs. for the Petitioner.
Ms. Manali Singhal, Santosh Sachin, Ms. Vinita Sashidharan, Jatin
Mongia, Abhijat P. Medh, Advs. for the Respondent.
The Judgment of the Court was delivered by
R. K.AGRAWAL J. 1. The IBI Consultancy India Private
Limited-the petitioner-Company is the Indian subsidiary of the IBI Group
based in Canada.  The above petitions, under Section 11(6) read with
Section 11(9) of the Arbitration and Conciliation Act, 1996 (hereinafter
referred to as ‘the Act’), have been filed by the petitioner-Company as
well as by the IBI Group for appointment of an Arbitrator to adjudicate
the disputes that have arisen between the parties in connection with the
contracts in question.
2. The petitioner-Company has filed two petitions for the
appointment of Arbitrator and its parent company viz., IBI Group has
also filed two petitions of the same nature. Since the point of consideration
is same in all these four petitions, purpose would be served if we moot
the case of either of the petition and would be disposed off by this common
judgment.
Arbitration Case No. 53 of 2016
3. The petitioner-Company is a multi-disciplinary company engaged
in the business of providing system integration and maintenance service
A
B
C
D
E
F
G
H
1029
for Toll and Traffic Management Systems whereas the DSC Limited,
the respondent-Company is a Company registered under the Companies
Act, 1956 having two subsidiary companies. First subsidiary Company
of the respondent-Company is the Lucknow Sitapur Expressway Limited
(LSEL) which is a special purpose vehicle (SPV) of the respondent-
Company and has signed a Concession Agreement with the National
Highways Authority of India (NHAI)

Excerpt shown. Read the full judgment & AI analysis in Lexace.