STANDARD CORROSION CONTROLS PVT. LTD. versus SARKU ENGINEERING SERVICES SON BHD

Citation: [2008] 15 S.C.R. 1051 · Decided: 11-11-2008 · Supreme Court of India · Bench: MARKANDEY KATJU · Disposal: Dismissed

Judgment (excerpt)

[2008] 15 $.C.R. 1051 
,.._ 
STANDARD CORROSION CONTROLS PVT. LTD. 
A 
v. 
SARKU ENGINEERING SERVICES SON BHD 
(Arbitration Application No. 6 of 2008) 
NOVEMBER 11, 2008 
B 
[MARKANDEY KATJU, J.] 
>-
Arbitration and Conciliation Act, 1996; S. 11 (5): 
Appointment of Arbitrator - Agreement entered into c 
between Indian company and foreign company for painting 
workscope package - Termination of contract by foreign 
company - Dispute - Invoking of arbitration clause by Indian 
company asking foreign company to select an Arbitrator -
Foreign company refusing to select - Application for D 
appointment of Arbitrator before Supreme Court ·- Held: In 
terms of agreement, applicant-Indian company, to apply to 
ICC for appointment of an Arbitrator in accordance with 
Arbitration Rules of International Chambers of Commerce -
Hence, application not maintainable. 
E 
S. 11 (2), (5) and (6) of 1996 Act - Appointment of an 
Arbitrator - Procedure for. 
Applicant, an Indian company, entered into an 
agreement with a foreign company, respondent, for 
F 
painting workscope package. Respondent suspended 
the contract for not furnishing requisite bank guarantee. 
This had resulted in a dispute between the parties. The 
applicant called upon the respondent to send a list of 
eminent persons for appointment of sole Arbitrator. When G 
the respondent did not respond, applicant himself had 
....( 
sent a list of persons to respondent for appointment of 
..... 
an Arbitrator. In response, respondent stated that the 
matter could be settled by mutual consent, failing which 
1051 
H 
1052 
SUPREME COURT REPORTS 
[2008] 15 S.C.R. 
A arbitration could be held at Mumbai by applying the Rules 
of International ·Chambers of Commerce. Hence, the 
present application filed by the applicant u/s. 11 ( 5) of the 
Act. 
. 
8 
Applicant submitted that the Arbitration Rules of the 
International Chambers of Commerce (ICC) cannot 
prevail over the Arbitration and Conciliation Act, 1996. 
Dismissing ·the application, the Court 
C 
tiELD: 1.1. It is true that a statute overrides the 
contract, but it has to. be noticed that Section 11 (2) of the 
Arbitration and Conciliation Act states that subject to sub-
section (6), the parties are free to agree on a pro.cedure · 
Jor appointing the arbitrator or.arbitrators. Admittedly, the 
conditions mentioned in'sub .. section (6) of Section 11 are 
D not attracted in this case. Hence, the procedur~ to appoin·t · · 
an arbitrator agreed upon by the parties will be applicable.. . 
[Para 10][105.6-A;.Cl 
· · · · 
· 
· 
1.2. The scheme ofthe Act is·that under Section 11(2) 
E of the Act, the. parties are free to agree on a procedure 
for. appointing. an Arbitrator subject to the provisions of 
· Section 11 (6). A petition under Section 11 (5) of the Act 
would not lie if there is any agreement between the 
pa.rties providing for the procedure for appointment of an 
F arbitrator. In the present case, Article X of the agreement 
provides for such procedure. [Para 13] [1056-G-H; 1057-
A] 
2. The parties had agreed that any dispute between 
them shall be settled as far as possible by mutual 
G consultation and consent, failing which by arbitration to 
be held at Mumbai applying the Arbitration Rules of the 
ICC. The applicant has to apply to the Secretariat of the 
ICC; as mentioned in the Arbitration Rules of the ICC, and 
it cannot approach this Court for appointment of an 
H Arbitrator. No doubt, the arbitration will have to be held 
...... _ v 
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STANDARD CORROSION CONTROLS PVT.LTD~ v. SARKU 
1053 
ENGINEERING SERVICESSDN BHD 
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at Mumbai, but the entire procedure of appointment of the 
A 
Arbitrator has to be in accordance with the Arbitration 
Rules of the ICC, which requires that first a request has 
to be made to the Secretariat of the ICC. Admittedly, the 
applicant has not approached the ICC Secretariat. Hence, 
the application filed by the applicant is not maintainable 
B 
at all. [Para 11] (1056-C-E] 
_...._ 
Iron & Steel Co. Ltd. vs. Tiwari Road Lines (2007) 5 SCC 
703 and Rite Approach Group Ltd. vs. Rosoboronexport, 
(2006) 1 sec 206, relied on. 
c 
CIVIL ORIGINAL JURISDICTION : Arbitration Application 
No. 6 of 2008. 
Anurag Kumar, P.N. Kumar, Bindra Rana and Meenu 
.,_, 
Sharma·· (for M/s. S.S. Rana & Co.) for the Applicant. 
D 
Kavin Gulati, Rashmi Singh, Avinash Pandey and T. 
/. Mahipal for the Respondent. 
The Judgment of the Court was delivered by 
E 
MARKANDEY KAT 

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