THE IRON AND STEEL CO. LTD. versus M/S. TIWARI ROAD LINES

Citation: [2007] 6 S.C.R. 156 · Decided: 08-05-2007 · Supreme Court of India · Bench: G.P. MATHUR · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
THE IRON AND STEEL CO. LTD. 
v. 
MIS. TIWARI ROAD LTh.'ES 
MAY 8, 2007 
[G.P. MA THUR AND LOKESHWARSINGH PANT A, JJ.] 
Arbitration and Conciliation Act, 1996-s. 1 I-Appointment of 
arbitrator-If parties have agreed on a procedure for appointment of arbitrator 
C as contemplated by sub-section (2) of s.11, then dispute between them has 
to be decided in accordance with the said procedure and recourse to the 
Chief Justice or his designate cannot be taken straightaway-A party can 
approach the Chief Justice or his designate only if the parties have not 
agreed on a procedure for appointment of arbitrator as contemplated by sub-
section (2) of s. 1 I or various contingencies provided for in sub-section (6) 
D have arisen-On facts, since the parties had agreed on a procedure for 
appointing an arbitrator for settling disputes as contemplated by sub-section 
(2) and there is no a/legation that anyone of the contingencies enumerated 
in clauses (a) or (b) or (c) of sub-section (6) had arisen, application moved 
by Respondent for appointment of arbitrator before the City Civil Court, the 
E designated authority under the scheme framed by the High Court, was clearly 
not maintainable and the said Court had no jurisdiction to entertain such 
an application and pass any order-Respondent should have initiated 
proceedings for settlement of disputes by arbitration in accordance with the 
Rules of Arbitration of the Indian Council of Arbitration as provided in the 
F 
agreement entered between the parties. 
Under the terms of the agreement entered into between the parties, any 
dispute arising between them had to be resolved in accordance with the Rules 
of Arbitration of the Indian Council of Arbitration. However, when certain 
disputes arose between the parties, Respondent without taking recourse to 
the said Rules, filed an application before the City Civil Court, the designated 
G authority under Section 11 of the Arbitration and Conciliation Act, 1996 
under the scheme framed by the State High Court, for appointment of an 
arbitrator to decide the dispute. The City Civil Court allowed the application ·' 
and appointed a retired Judicial Officer as arbitrator. 
H 
156 
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' ,.. 
) -
IRON AND STEEL CO.LTD. v. TIWARI ROAD LINES 
157 
-., · 
The question which arose for consideration in the present appeal is A 
' \ 
whether in view of the agreement between the parties that any dispute between 
them shall be decided in accordance with the Rules of Arbitration of the Indian 
Council of Arbitration, Respondent should have initiated proceedings for 
settlement of disputes by arbitration in accordance with the said Rules and 
consequently the application moved by it before the City Civil Court for B 
appointment of an arbitrator was not maintainable. 
Allowing the appeal, the Court 
HELD: 1.1. A combined reading of the various sub-sections of Section 
II of the Act would show that the request to the Cltief Justice for appointment C 
of an arbitrator can be made under sub-sections ( 4) and (5) of Section 11 where 
parties have not agreed on a procedure for appointing the arbitrator as 
contemplated by sub-section (2) of Section 11. A request to the Chief Justice 
for appointment of an arbitrator can also be made under sub-section (6) where 
parties have agreed on a procedure for appointment of an arbitrator as 
contemplated in sub-section (2) but certain consequential measures which are D 
required to be taken as enumerated in clause (a) or (b) or (c) of sub-section 
(6) are not taken or performed. [Para 6) [163-C, DJ 
1.2. In the present case the agreement executed between the parties 
contains an arbitration clause and clause 13.1 clearly provides that all 
disputes and differences whatsoever arising between the parties out of or E 
relating to the construction, meaning and operation or effect of the contract 
or the breach thereof shall be settled by arbitration in accordance with the 
Rules of Arbitration of the Indian Council of Arbitration and the award made 
in pursuance thereof shall be binding on the parties. This clause is in 
accordance with sub-section (2) of Section 11 of the Act There being an agreed F 
procedure for resolution of disputes by arbitration in accordance with the 
Rules of Arbitration of the Indian Council of Arbitration, sub-sections (3), 
(4) and (5) of Section 11 can have no application. The stage for invoking sub-
section (6) of Section 11 had also not arrived. In these circumstances, the 
appli

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