TMI Blog1996 (11) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 10 is satisfied and subjection (2) thereof has no application. As earlier stated, the agreement satisfies the requirement of section 7 and, therefore, is a valid arbitration agreement. The appoint- ment of arbitrators must, therefore, be governed by section 11. Thus direct that the Chief Justice of the High Court is to appoint the third arbitrator under section 11(4)(b) in view of the failure of the two appointed arbitrators to appoint the third arbitrator within thirty days from the date of their appointments. - CIVIL APPEAL NO. 12736 OF 1996 - - - Dated:- 18-11-1996 - J.S. VERMA AND B.N. KIRPAL, JJ. Ashok Desai, Attorney General, Shri Narain, CM. Oberoi, Sandeep Narain and Ashok Sharma advocates for the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 19-1-1996 which was received by the MMTC Ltd. on 31-1-1996. On 7-2-1996 the respondent appointed Shri M.N. Chandurkar, a former Chief Justice of Madras High Court, as its arbitrator. The MMTC Ltd. claimed that arbitration could not be resorted to and, therefore, it did not name its arbitrator. The Sterlite Industries (India) Ltd. filed an application in the Bombay High Court for appointing an arbitrator in accordance with the New Act. 3. Before the High Court, the learned counsel for the MMTC Ltd. contend-ed that the arbitration clause was not attracted but this objection was rejected. The other contention on behalf of the MMTC Ltd. was that the arbitration agreement provided for the appointment of two arbitrators while sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir respective appointments." 5. In reply Shri Dave, the learned counsel for the respondent, contended that there is no such inconsistency between section 10 and the corres-ponding provision in the 1940 Act, both being substantially the same. The learned counsel contended that the provisions of the New Act must be construed to promote the object of implementing the scheme of alterna- tive dispute resolution; and the New Act must be construed to enable the enforcement of the earlier arbitration agreements. It was urged that each of the parties having nominated its arbitrator, the third arbitrator was required to be appointed according to section 11(3) and the failure to do so attracts the consequential results under the New Act. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract." Section 10: "10. Number of arbitrators. (1) The parties are free to determine the number of arbitrators, provided that such number shall not be an even number. (2) Failing the determination referred to in sub-section (1), the Arbitral Tribunal shall consist of a sole arbitrator." Section 11 : "11. Appointment of arbitrators. (1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties. (2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators. (3) Failing any agreement referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment. (7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justice or the person or institution designated by him is final." 6. Chapter II of the New Act contains sections 7 to 9 under the heading Arbitration Agreement . Chapter HI under the heading Composition of Arbitral Tribunal contains sections 10 to 15. 7. Sub-section (3) of section 7 requires an arbitration agreement to be in writing and sub-section (4) describes the kind of that writing. There is nothing in section 7 to indicate the requirement of the number of arbitrators as a part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ators, one each appointed by the two sides, to appoint an umpire not later than one month from the latest date of their respective appointments. 10. The question is : Whether there is anything in the New Act to make such an agreement unenforceable? We do not find any such indication in the New Act. There is no dispute that the arbitral proceeding in the present case commenced after the New Act came into force and, therefore, the New Act applies. In view of the term in the arbitration agreement that the two arbitrators would appoint the umpire or the third arbitrator before proceeding with the reference, the requirement of sub-section (1) of section 10 is satisfied and subjection (2) thereof has no application. As earlier stated, the agr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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