SWADESH KUMAR AGARWAL versus DINESH KUMAR AGARWAL & ORS, ETC., ETC.

Citation: [2022] 7 S.C.R. 901 · Decided: 05-05-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Disposed off

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Judgment (excerpt)

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   [2022] 7 S.C.R. 901
901
SWADESH KUMAR AGARWAL
v.
DINESH KUMAR AGARWAL & ORS, ETC., ETC.
(Civil Appeal Nos. 2935-2938 of 2022)
MAY 05, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Arbitration and Conciliation Act, 1996: ss. 11(5), 11(6), 14 –
Termination of the mandate of the arbitrator – Procedure to follow
– Parties-respondent no. 1 to 3 appointed a sole arbitrator by mutual
consent and later revoked the mandate of the sole arbitrator –
Thereafter, the respondent no. 1 and 3 filed applications u/s. 14(1)(a)
to terminate the mandate of the sole arbitrator on the ground of
delay in concluding the arbitration proceedings – During the
pendency thereof, the appellant filed an application u/ord. 7 r. 11
for rejection of the application u/s. 14 – Trial Court dismissed the
appellant’s application – Thereagainst, the appellant filed writ
petition and respondent no. 1 filed an arbitration case u/s. 11(6) to
terminate the mandate of the sole arbitrator and appoint a fresh
arbitrator – High Court allowed the arbitration case and appointed
a fresh arbitration and dismissed the writ petition – On appeal,
held: An application u/s. 11(6) shall be maintainable only in a case
where there is a contract between the parties containing the
arbitration agreement and the appointment procedure is prescribed
and is agreed upon in writing – s.11(5) would be attracted in a case
where there is no procedure for appointment of an arbitrator agreed
upon as per s.11(2) – On facts, the sole arbitrator was appointed
by the parties themselves by mutual consent and in the absence of
any written contract containing the arbitration agreement – Thus,
an application u/s.11(6) in absence of any written agreement
containing arbitration agreement was not maintainable at all –
Dispute regarding the termination of the mandate of the arbitrator
u/s. 14(1)(a) can be raised before the court as defined u/s.2(e) and
it cannot be decided by the High Court on an application made u/
s.11(6) – Thus, the judgement and order of the High Court is
unsustainable and is quashed and set aside – Further, an application
u/Ord.7 r.11 is decided only after considering the averments and
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SUPREME COURT REPORTS
[2022] 7 S.C.R.
allegation in the application/plaint and not the written statement/
reply to the application/defence – Trial court rightly dismissed the
application u/Ord.7 r.11 – Civil Procedure Code, 1908 – Ord. 7 r.
11.
Disposing of the appeals, the Court
HELD: 1.1 The sole Arbitrator was appointed by the parties
themselves by mutual consent. There was no written agreement/
contract containing the arbitration clause. [Para 6.1][911-G]
1.2 Sub-section (5) of section 11 of the Arbitration and
Conciliation Act, 1996 shall be attracted in a case where there is
no procedure for appointment of an arbitrator agreed upon as
per sub-section (2) of section 11 and sub-section (6) of section 11
shall be applicable in a case where there is a contract containing
an arbitration agreement and the appointment procedure is
agreed upon. Thus, while referring the matter for arbitration there
need not be any written contract containing any arbitration
agreement. But the parties may themselves decide to refer the
dispute for arbitration to the sole arbitrator by mutual consent.
In that case or eventuality, sub-section (6) of section 11 shall not
be attracted at all and therefore, in such a situation, the application
under sub-section (6) of section 11 shall not be maintainable. An
application under sub-section (6) of section 11 shall be
maintainable only in a case where there is a contract between the
parties containing the arbitration agreement and the appointment
procedure is prescribed and is agreed upon in writing. In the
instant case, the sole arbitrator was appointed by the parties
themselves by mutual consent and in the absence of any written
contract containing the arbitration agreement. Therefore,
application under section 11(6) of the Act, 1996 in absence of any
written agreement containing arbitration agreement was not
maintainable at all. [Paras 6.2 & 6.3][912-C-F]
1.3 Except sections 13, 14 and 15, there is no other
provision under the Act, 1996 dealing with termination of the
mandate of the arbitrator and/or termination of the arbitral
proceedings. Section 13 of the Act, 1996 shall be applicable only
in a case where the arbitrator is challenged on the grounds
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mentioned in section 12 of the Act, 1996. Sections 14 and 15
pr

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