NATIONAL HIGHWAYS AUTHORITY OF INDIA AND ANR. versus BUMIHI WAY DOB LTD. (JV) AND ORS.

Citation: [2006] SUPP. 6 S.C.R. 586 · Decided: 25-09-2006 · Supreme Court of India · Bench: AR. LAKSHMANAN

Judgment (excerpt)

A 
NATIONAL HIGHWAYS AUTHORITY OF INDIA AND ANR. 
v. 
BUMI HI WAY DOB LTD. (JV) AND ORS. 
SEPTEMBER 25, 2006 
B 
[DR. AR. LAKSHMANAN AND TAR UN CHATTERJEE, JJ.] 
Arbitration and Conciliation Act, 1996 
Sections 15 and 16-Arbitration clause providing for arbitral tribunal 
C with Presiding arbitrator appointed by consensus of two arbitrators appointed 
by parties, and in absence of consensus, appointment by a nominated 
institution-On disagreement amongst arbitrators about appointment of 
Presiding arbitrator, one party asking the nominated institution whether it 
had any judicial officer on its panel, and on receipt of reply in negative, 
D approaching High Court for appointment of Presiding arbitrator under 
Section 11 (6) of the Act-High Court appointing Presiding arbitrator with 
consent of parties-Correctness of-Held-Invocation of Section 11(6) was 
premature and erroneous; it was more so as it could be based only on default 
of a party-Prior to order of appointment of Presiding arbitrator by High 
Court only a clarification was sought from the nominated institution and no 
E reference was made to it-Assumption in High Court order that one of the 
party had approached the nominated institution for appointment of Presiding 
arbitrator being wrong, consent of parties read ejudem generis therein was 
not consent in eyes of law--/n accordance with Section 15(2), on termination 
of mandate of Presiding Arbitrator, the two arbitrators were first required to 
F reach a consensus and on their failure to arrive at a consensus only the 
nominated institution was authorized to appoint Presiding arbitrator. 
Arbitration tribunal-Presiding arbitrator-One arbitrator on tribunal 
being a retired Chief Justice-Held-it is not necessa1y that the Presiding 
Arbitrator should be at/east a retired Chief Justice or a retired Judge of a 
G High Court with considerable experience-There is no law requiring that if 
one of aroitrators is a retired Judge the Presiding Arbitrator also has to be 
a retired Judge-It was more so as parties entered into a contract after fully 
understanding its import and terms so agreed cannot be deviated from. 
H 
586 
-
NATIONAL HIGHWAYS AUTHORITY OF INDIA "· BUMIHIWA YDDB L TD.(JV) 
587 
Appellant awarded to respondent contract for widening and A 
strengthening of a part of National Highway. The contract had a clause 
whereby disputes between the parties were to be finally resolved by arbitration 
in accordance with the Arbitration and Conciliation Act, 1996. The arbitral 
tribunal was to consist of three arbitrators-one each appointed by the parties 
and the third one chosen by those arbitrators was to act as the Presiding 
arbitrator, and in case of failure of the two arbitrators to reach a consensus, B 
the Presiding arbitrator wa.s to be appointed by the President, Indian Roads 
I 
Congress (IRCJ. 
Disputes having arisen between the parties, the arbitration clause was 
invoked and the parties appointed their respective arbitrators. As the two C 
arbitrators could not agree on a Presiding Officer, respondent inquired from 
IRC whether any judicial officer was available with them for nomination 
thereto. On receipt of a reply in negative, they filed an application before High 
Court under Section 11(6) of the Act for appointment of a Presiding arbitrator. 
One person, YBR, was named by High Court and appointed as Presiding 
Officer. However, thereafter the arbitrator appointed by appellant and the D 
Presiding arbitrator resigned. Appellant appointed a new arbitrator. Once 
again, as the two arbitrators failed to agree on a Presiding Officer, both the 
parties approached IRC for appointment of a Presiding Officer. However, 
respondent approached the High Court again arid it directed the IRC not 
appoint any Presiding arbitrator till the next hearing before it. Thereafter E 
the High Court appointed a retired Chief Justice of a High Court as the 
Presiding Officer. Aggrieved by this, appellant filed the present appeal. 
Appellant contended that (i) respondent never sought any intervention 
of IRC for appointment of the Presiding Arbitrator; what they had sought was 
only a clarification in that regard (ii) application for appointment of Presiding F 
arbitrator was in violation of Section 11 (6) as also against the contractual 
terms agreed to between the parties without making any reference to IRC for 
that appointment (iii) on. the resignation of an arbitrator, the statutory 
provision which steps in is o

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