TMI Blog2000 (8) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the contentious issues would be an act of non-performance of duty and in view of what has been stated earlier the concerned authority could be directed by mandamus to perform its duty. We fail to understand how a petition under article 32, at all is entertainable against the order of the learned Chief Justice, refusing to appoint an arbitrator under section 11 of the 1996 Act. This petition under article 32, accordingly stands dismissed. - SPECIAL LEAVE PETITION (C) NOS. 11522-11526 OF 1999 - - - Dated:- 21-8-2000 - G.B. PATTANAIK, DORAISWAMY RAJU AND S.N. VARIAVA, JJ. Mukul Rohtagi, F.S. Nariman, S.K. Dholakia, Rajiv Dhawan, P.C. Markande, Gopal Subramaniam, Atul Y. Chitale, Ms. Suchitra A. Chitale, Sushil Kumar Jain, A.P. Dhamija, Pradeep Aggarwal, Subhash Sharma, A. Mishra, Mrs. Kiran Bhardwaj, B.V. Balram Das, Mrs. Sushma Suri, S.W.A. Qadri, T.V. Ratnam, Mrs. Anil Katiyar, Guru Krishna Kumar, Mrs. Sri Kala Guru K. Kumar, S.R. Setia, K.V. Sreekumar and V. Prasad Rao for the Appearing Parties. JUDGMENT Pattanaik, J. - In this batch of cases an important question arises for consideration of this Court, namely, under the provisions of the Arbitration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive in nature what is the remedy open to the person concerned if his request for appointment of an Arbitrator is turned down by the learned Chief Justice or his nominee, for some reason or other? In deciding the latter question it would be necessary to find out the true intention of the Legislature in substituting the 1940 Act by the 1996 Act and bearing in mind the object of enactment of the 1996 Act what should be the approach of the learned Chief Justice or his nominee when an application for appointment of an Arbitrator is made invoking the jurisdiction under section 11(6) of the 1996 Act. 2. At the outset, it must be borne in mind that prior to the 1996 Act, the Arbitration Act, 1940, which was in force in India provided for domestic arbitration and no provision was there to deal with the foreign awards. So far as the Foreign Awards are concerned, the same were being dealt with by the Arbitration (Protocol and Convention) Act, 1937, and the Foreign Awards (Recognition and Enforcement) Act, 1961. The increasing growth of global trade and the delay in disposal of cases in the Courts under the normal system in several countries made it imperative to have the perception of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted by the parties in arbitration proceedings are sought to be thwarted by an express provision inasmuch as if a party knowingly keeps silent and then suddenly raises a procedural objection will not be allowed to do so. The role of institutions in promoting and organising arbitration has been recognised. The power to nominate arbitrators has been given to the Chief Justice or to an institution or person designated by him. The time limit for making awards has been deleted. The existing provisions in the 1940 Act relating to arbitration through intervention of the Court, when there is no suit pending or by order of the Court when there is a suit pending, have been removed. The importance of transnational commercial arbitration has been recognised and it has been specifically provided that even where the arbitration is held in India, the parties to the contract would be free to designate the law applicable to the substance of the dispute. Under the new law unless the agreement provides otherwise, the arbitrators are required to givereasons for the award. The award itself has now been vested with status of a decree, inasmuch as the award itself is made executable as a decree and it wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpartiality of the arbitrator, and in respect of the jurisdiction of the arbitrator could be raised before the arbitrator who would decide the same. Section 13(1) provides that party would be free to agree on a procedure for challenging an arbitrator. Sub-section (2) of said section provides that failing any such agreement, a party intending to challenge an arbitrator, either on grounds of independence or impartiality or on the grounds of lack of requisite qualifications, shall within 15 days of becoming aware of the constitution of the Tribunal send a written statement for the challenge to the Tribunal itself. Section 13(3) provides that unless the arbitrator withdraws or the other party agrees to the challenge, the Tribunal shall decide on the challenge itself. Sub-section (4) of section 13 mandates an arbitrator to continue the arbitral proceedings and to make an award. Section 16 empowers the arbitral Tribunal to rule on its own as well as on objections with respect to the existence or validity of the arbitration agreement. Conferment of such power on the arbitrator under the 1996 Act indicates the intention of the Legislature and its anxiety to see that the arbitral process is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) then in the event an order of refusal is passed under section 11(6) it could be remedied by issuance of a mandamus. We are persuaded to accept the second alternative inasmuch as in such an event there would not be inordinate delay in setting the arbitral process in motion. But, as has been explained earlier in the earlier part of this judgment, the duty of the Chief Justice or his nominee being to set the arbitral process in motion it is expected that invariably the Chief Justice or his nominee would make an appointment of arbitrator so that the arbitral proceeding would start as expeditiously as possible and the dispute itself could be resolved and the objective of the Act can be achieved. In fact a Bench of this Court in Sundaram Finance Ltd. s case ( supra ) while considering the scope of section 9 of the Act has approached the problem from this perspective and incidental observation has been made that section 11 does not require the Court to pass a judicial order appointing arbitrator. The nature and function performed by the Chief Justice or his nominee under sub-section (6) of section 11 being essentially to aid the constitution of the arbitral Tribunal cannot be held to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese problems by permitting the aggrieved party to request the Chief Justice or any person or institution designated by him to take the necessary measure, i.e., to make the appointment, unless the agreement on the appointment procedure provides other means for securing the appointment. Sub-section (6), therefore, aims at removing any deadlock or undue delay in the appointment process. This being the position, it is reasonable to hold that while discharging the functions under sub-section (6), the Chief Justice or his nominee will be acting in his administrative capacity and such a construction would subserve the very object of the new Arbitration Law. 4. The nature of the function performed by the Chief Justice being essentially to aid the Constitution of the Arbitration Tribunal immediately and the Legislature having consciously chosen to confer the power on the Chief Justice and not a Court, it is apparent that the order passed by the Chief Justice or his nominee is an administrative order, as has been held by this Court in Ador Samia (P.) Ltd. s case ( supra ) and the observations of this Court in Sundaram Finance Ltd. s case ( supra ) also is quite appropriate and nei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... special leave petition stands rejected. 7. Writ Petition (Civil) No. 81 of 2000 is a petition under article 32 of the Constitution, against the very order of the learned Chief Justice of the Gauhati High Court, which was the subject matter of challenge in Special Leave Petition ( C ) No. 19549 of 1999. We fail to understand how a petition under article 32, at all is entertainable against the order of the learned Chief Justice, refusing to appoint an arbitrator under section 11 of the 1996 Act. This petition under article 32, accordingly stands dismissed. 8. Special Leave Petition (Civil) No. 11317 of 1999 is directed against the order of the nominee of the learned Chief Justice of Andhra Pradesh High Court, appointing an arbitrator under section 11(6). The order in question being administrative in nature and the nominee of the learned Chief Justice, not being a Court or a Tribunal, as held by us, this special leave petition stands dismissed. 9. Special Leave Petition (Civil) No. 12323 of 1999 is by the Union of India, against the order of the nominee of the learned Chief Justice of Andhra Pradesh High Court, appointing an arbitrator under section 11(6). For the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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