LexMIS DAKSHIN SHELTERS PVT. LTD. versus GEETA S. JOHARI
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A B [2012) 3 S.C.R. 540 MIS DAKSHIN SHELTERS PVT. LTD. v. GEETA S. JOHARI (Special Leave Petition (c) No. 33448 of 2011) FEBRUARY 21, 2012 ,, [R.M. LODHA AND H.L. GOKHALE, JJ.] Arbitration and Conciliation Act, 1996 - s. 11 - Appointment of arbitrator - Agreement between the parties - C Disputes arose out of the agreement - Respondent issued notice to petitioner invoking arbitration clause in the agreement and nominated a former High Court Judge on her behalf and called upon the petitioner to nominate its arbitrator - Petitioner raised objections - Respondent filed application D before High Court for appointment of arbitrator! arbitrators - Designate Judge appointed a Sr. Advocate as arbitrator on ,behalf of the petitioner- This was opposed by the Petitioner - Petitioner submitted that instead, a retired High Court Judge, stationed in Hyderabad, may be appointed as E arbitrator - Respondent did not agree to substitution of the arbitrator appointed by the Designate Judge on behalf of the petitioner and further submitted that opportunity was given to the petitioner to nominate its arbitrator by notice but it failed tb availof the opportunity, and thus ceased to have any right F to appoint arbitrator in, terms of the arbitration clause in the Agreement - , Held: From the petitioner's reply to the notice, it is clear that it declined to appoint its arbitrator as according to it there was no question of appointment of arbitrator by either of the parties and there being no arbitral dispute, there was no occasion for resolution of dispute as provided in the G Agreement - The stance of the petitioner amounted to failure on its part to appoint its arbitrator on receipt of the request to do so from the respondent - The petitioner's right to appoint its arbitrator in terms of the Agreement got extinguished once 540 DAKSHIN SHELTERS PVT. LTD. v. GEETA S. 541 JOHAR I it failed to appoint the arbitrator on receipt of the notice - It A cannot be said that the Designate Judge committed any e"or in nominating a Sr. Advocate as an arbitrator on behalf of the petitioner. A Development Agreement-cum-General Power of 8 Attorney was executed between the parties. Certain disputes arose out of that agreement. On December 10, 2010, the respondent issued a notice to the petitioner invoking arbitration clause in the above agreement and nominated a former Judge of the High Court of Andhra C Pradesh on her behalf and called upon the petitioner to nominate its arbitrator. By reply dated January 10, 2011, the petitioner raised objections to this request. Respondent thereafter invoked Section 11 of the Arbitration and Conciliation Act,1996 and filed application D before the High Court requesting the Chief Justice or the Designate Judge to appoint ar~itrator/arbitrator5. F The Designate Judge appoi~ted a Sr. Advocate as an arbitrator on behalf of the petit¥>ner; This was opposed E by the Petitioner. The petitioner 'ubmitted that instead of the senior advocate as appoipted by the designate Judge, a retired High Court\ Judge, stationed in Hyderabad, may be appointed i,as arbitrator. Limited notice was issued to the resp~ndent in this regard subject to deposit of Rs 1 lakh by the petitioner in the Registry towards costs. The respondent did not agree to substitution of the arbitrator appointed by the Designate Judge on behalf of the petitioner and further submitted that once an opportunity was given to the petitioner to nominate its arbitrator by notice dated December 10, 2010 G and it failed to avail of the opportunity, it ceased to have any right to appoint the arbitrator in terms of the arbitration clause in the Development Agreement. Dismissing the Special Leave Petition, the Court H 542 SUPREME COURT REPORTS [2012] 3 S.C.R. A HELD: 1. On the disputes having (!risen between the parties, the notice was sent by the respondent to the petitioner on December 10, 2010. The petitioner did respond to the above notice within 30 days of its receipt by sending its reply on January 10, 2011.Various pieas 1 B were raised in that reply and ultimately, the petitioner . responded by stating "it is stated that the question of appointment of Arbitrator does not raise.either from your side or from our side. There is -no arbitral dispute to be decided by the arbitrator." From the above response,· it c is clear that the petitioner declined to appoint its arbitrator as according
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