Page 1 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

ORIGINAL CIVIL JURISDICTION

ARBITRATION PETITION NO. 20 OF 2011

ANTRIX CORP. LTD. ...PETITIONER

Vs.

DEVAS MULTIMEDIA P. LTD. ...RESPONDENT

J U D G M E N T

ALTAMAS KABIR, CJI.

1.An application under Section 11(4) read with

Section 11(10) of the Arbitration and Conciliation

Act, 1996, hereinafter referred to as "the 1996

Act", has given rise to an important question of

law relating to the scope and ambit of the powers

Page 2 2

of the Chief Justice under Section 11(6) of the

said Act. In view of the importance of the

question, which has arisen, the matter which was

being heard by the delegatee of the Chief Justice,

has been referred to a larger Bench for

determination thereof.

2.M/s. Antrix Corporation Limited, the Petitioner

herein, a Government Company incorporated under the

Companies Act, 1956, and engaged in the marketing

and sale of products and services of the Indian

Space Research Organization (ISRO), entered into an

Agreement with the Respondent, Devas Multimedia P.

Ltd., hereinafter referred to as "Devas" on 28th

January, 2005, for the lease of Space Segment

Capacity on ISRO/ Antrix S-Band Spacecraft.

Article 19 of the Agreement empowered the

Petitioner to terminate the Agreement in certain

contingencies. It also provided that the Agreement

Page 3 3

and the rights and responsibilities of the parties

thereunder would be subject to and construed in

accordance with the laws of India. In other words,

the domestic law would be the governing law of the

Agreement.

3.Article 20 of the Agreement deals specially

with arbitration and provides that in the event any

dispute or difference arises between the parties as

to any clause or provision of the Agreement, or as

to the interpretation thereof, or as to any account

or valuation, or as to rights and liabilities,

acts, omissions of any party, such disputes would

be referred to the senior management of both the

parties to resolve the same within 3 weeks, failing

which the matter would be referred to an

Arbitral Tribunal comprising of three Arbitrators.

It was provided that the seat of arbitration would

be New Delhi in India. It was also provided that

Page 4 4

the arbitration proceedings would be held in

accordance with the rules and procedures of the

International Chamber of Commerce (ICC) or

UNCITRAL.

4.On 25th February, 2011, the Petitioner Company

terminated the Agreement with immediate effect in

terms of Article 7(c) read with Article 11(b) of

the Agreement in keeping with the directives of the

Government, which it was bound to follow under

Article 103 of its Articles of Association. By its

letter dated 28th February, 2011, the Respondent

objected to the termination. On 15th April, 2011,

the Petitioner Company sent to the Respondent

Company a cheque for Rs. 58.37 crores refunding the

Upfront Capacity Reservation Fee received from

Devas. The said cheque was, however, returned by

Devas on 18th April, 2011, insisting that the

Agreement was still subsisting.

Page 5 5

5.In keeping with the provisions of Article 20 of

the Arbitration Agreement, the Petitioner wrote to

the Respondent Company on 15th June, 2011,

nominating its senior management to discuss the

matter and to try and resolve the dispute between

the parties. However, without exhausting the

mediation process, as contemplated under Article

20(a) of the Agreement, Devas unilaterally and

without prior notice to the Petitioner, addressed a

Request for Arbitration to the ICC International

Court of Arbitration on 29th June, 2011, seeking

resolution of the dispute arising under the

Agreement. Through the unilateral Request for

Arbitration, Devas sought the constitution of an

Arbitral Tribunal in accordance with the ICC Rules

of Arbitration, hereinafter referred to as "the ICC

Rules", and nominated one Mr. V.V. Veedar, Queen's

Counsel, as its nominee Arbitrator, in accordance

with the ICC Rules.

Page 6 6

6.According to the Petitioner, it is only on 5th

July, 2011, that it came to learn that Devas had

approached the ICC and had nominated Mr. V.V.

Veedar, as its nominee Arbitrator, upon receipt of

a copy of the Respondent's Request for Arbitration

forwarded by the ICC. By the said letter, the

Petitioner was also invited to nominate its nominee

Arbitrator.

7.Instead of nominating its Arbitrator, the

Petitioner, by its letter dated 11th July, 2011,

once again requested Devas to convene the Senior

Management Team meet on 27th July, 2011, in terms

of the Agreement. Pursuant to such request, a

meeting of the Senior Management Team was held, but

Devas insisted that the parties should proceed to

arbitration and did not discuss the issues in

accordance with Article 20(a) of the Agreement.

Despite the attempt to resolve the dispute through

Page 7 7

the Senior Management Team and despite the fact

that Devas had already invoked the Arbitration

Agreement by making a Request for Arbitration to

the ICC and had also appointed its nominee

Arbitrator under the ICC Rules, the Petitioner

appointed Mrs. Justice Sujata V. Manohar, as its

Arbitrator and called upon Devas to appoint its

nominee Arbitrator within 30 days of receipt of the

notice. Consequently, while Devas had invoked the

jurisdiction of the ICC on 29th June, 2011, the

Petitioner subsequently invoked the Arbitration

Agreement in accordance with the UNCITRAL Rules on

the ground that Devas had invoked ICC Rules

unilaterally, without allowing the Petitioner to

exercise its choice. Having invoked the

Arbitration Agreement under the UNCITRAL Rules, the

Petitioner called upon the Respondent to appoint

its Arbitrator within 30 days of receipt of the

notice.

Page 8 8

8.On 5th August, 2011, the Petitioner wrote to

the Secretariat of the ICC Court stating that it

had appointed its Arbitrator, in accordance with

the Agreement between the parties, asserting that

in view of Article 20 of the Agreement, the

arbitral proceedings would be governed by the

Indian law, viz., the Arbitration and Conciliation

Act, 1996.

9.The Respondent did not reply to the

Petitioner's letter dated 30th July, 2011.

However, the International Chamber of Commerce, by

its letter dated 3rd August, 2011, responded to the

Petitioner's letter dated 30th July, 2011, and

indicated as follows :

"We refer to our letter dated 18

July, 2011, and remind the

parties that the issues raised

regarding the arbitration clause

would shortly be submitted to the

Court for consideration. All

comments submitted by the parties

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will be brought to the Court's

attention. In this regard, any

final comments from the parties

may be submitted to us by 5

August, 2011.

Should the Court decide that this

arbitration shall proceed

pursuant to Article 6(2) of the

Rules, any decision as to the

jurisdiction of the Arbitral

Tribunal shall be taken by the

Arbitral Tribunal itself."

10.It is in such circumstances that the

application under Section 11(4) read with Section

11(10) of the 1996 Act, being Arbitration Petition

No. 20 of 2011, came to be filed by the Petitioner,

inter alia, for a direction upon Devas to nominate

its Arbitrator in accordance with the Agreement

dated 28th January, 2005, and the UNCITRAL Rules,

to adjudicate upon the disputes, which had arisen

between the parties and to constitute the Arbitral

Tribunal and to proceed with the Arbitration.

Page 10 10

11.The said application came to be listed before

one of us, Surinder Singh Nijjar, J., the Designate

of the Chief Justice, who was of the view that the

questions involved in the application were required

to be heard by a larger Bench. The parties were

requested to propose the questions of law to be

considered by the Larger Bench and the same are as

follows:

"i)Where the arbitration clause

contemplates the application of

either ICC Rules or UNCITRAL

Rules after the constitution of

the Tribunal, could a party

unilaterally proceed to invoke

ICC to constitute the Tribunal

and proceed thereafter?

ii)Whether the judgment of this

Hon'ble Court in TDM

Infrastructure v. UE Development

reported in (2008) 14 SCC 271

lays down the correct law with

reference to the definition of

International Commercial

Arbitration?

iii)Whether the jurisdiction of the

Court under Section 11 extends

Page 11 11

to declaring as invalid the

constitution of an arbitral

tribunal purportedly under an

arbitration agreement, especi-

ally, where the tribunal has

been constituted by an

Institution purportedly acting

under the Arbitration agreement?

iv)Whether the jurisdiction of an

arbitral tribunal constituted by

an institution purportedly

acting under an arbitration

agreement can be assailed only

before the Tribunal and in

proceedings arising from the

decision or award of such

Tribunal and not before the

Court under Section 11 of the

Act?

v)Whether, once an arbitral

tribunal has been constituted,

the Court has jurisdiction under

Section 11 of the Act to

interfere and constitute another

Tribunal?

vi)Whether an arbitration between

two Indian companies could be an

international commercial arbi-

tration within the meaning of

Section 2(1)(f) of the Act if

the management and control of

one of the said companies is

exercised in any country other

than India?

Page 12 12

vii)Whether the petition is

maintainable in light of the

reliefs claimed and whether the

conditions precedent for the

exercise of jurisdiction under

Section 11 of the Act are

satisfied or not?"

12.While the matter was pending, most of the seven

questions raised were resolved. However, the most

important issue as to whether Section 11 of the

1996 Act could be invoked when the ICC Rules had

already been invoked by one of the parties, remains

to be decided.

13.On behalf of the Petitioner, reliance was

sought to be placed on the decision of this Court

in Sumitomo Heavy Industries Ltd. Vs. ONGC Ltd. &

Ors. [(1998) 1 SCC 305], wherein different laws

that could apply to an arbitral relationship had

been explained, namely :

(i) The proper law of the underlying contract

is the law governing the contract which

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creates the substantive rights and

obligations of the parties with regard to

the contract.

(ii) The proper law of the arbitration agreement

is the law governing the rights and

obligations of the parties arising from

the arbitration agreement.

(iii)The proper law of the reference is the

law governing the contract which

regulates the individual reference to

arbitration.

(iv) The curial law is the law governing the

arbitration proceedings and the manner in

which the reference has to be conducted.

It governs the procedural powers and

duties of the arbitrators, questions of

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evidence and the determination of the

proper law of the contract.

14.It was submitted that in the instant case, the

proper law of the contract is the Indian law and

the proper law of the Arbitration Agreement is the

Arbitration and Conciliation Act, 1996.

Accordingly, matters relating to the constitution

of the Arbitral Tribunal would be governed by

Sections 10 to 15 of the 1996 Act. It was pointed

out by learned counsel that the parties had agreed

that the arbitration proceedings could be conducted

either in accordance with the rules and procedures

of the ICC or UNCITRAL. The choice of the procedure

to be adopted by the Arbitral Tribunal in

conducting the arbitration was left to the

determination of the parties under Section 19(2) of

the 1996 Act. It was submitted that the choice of

the applicable procedural law could be exercised

Page 15 15

only after the constitution of the Arbitral

Tribunal and not at any stage prior thereto.

15.It was also submitted that in addition to the

clear provision of Section 2(2) of the 1996 Act and

the Agreement between the parties that the place of

arbitration would be New Delhi, the Agreement would

be expressly governed by Indian law under Article

19 of the Agreement. Accordingly, as was held in

National Thermal Power Corporation Vs. Singer

Company [(1992) 3 SCC 551], the proper law of the

contract would be the Indian law which would govern

the arbitration Agreement. It was submitted that

the cardinal test , as suggested by Dicey in his

"Conflict of Laws", stood fully satisfied and that

the governing law of the arbitration would be the

law chosen by the parties, or in the absence of any

agreement, the law of the country in which the

arbitration is held. Learned counsel submitted

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that according to Dicey, the proper law of the

arbitration is normally the same as the proper law

of the contract. It is only in exceptional cases

that it is not so, even where the proper law of the

contract is expressly chosen by the parties.

16.However, as indicated hereinbefore, the

question with which we are concerned is whether the

Arbitration Agreement contemplates the application

of Section 11 of the 1996 Act after the ICC Rules

had been invoked by one of the parties which also

appointed its nominee Arbitrator. Equally important

is the question whether Section 11 of the 1996 Act

empowers the Chief Justice to constitute a Tribunal

in supersession of the Tribunal already in the

stage of constitution under the ICC Rules,

notwithstanding the fact that one of the parties

had proceeded unilaterally in the matter. Learned

counsel for the Petitioner urged that since the

Page 17 17

Arbitration Agreement contemplates the constitution

of an Arbitral Tribunal without any reference to

the ICC Rules or the ICC Court, the recourse taken

by Devas to approach the ICC Court was without any

basis and was contrary to the express agreement

between the parties. Learned counsel also referred

to the decision of this Court in SBP & Co. vs.

Patel Engineering Ltd. & Anr. [(2005) 8 SCC 618],

in this regard.

17.Learned counsel further urged that the issue as

to whether once an Arbitral Tribunal has been

constituted, the Chief Justice has jurisdiction

under Section 11 of the 1996 Act to constitute

another Tribunal, presupposes that an Arbitral

Tribunal has been validly constituted and is not a

Tribunal constituted by one party acting entirely

in contravention of the Arbitration Agreement

between the parties. It was contended that till

Page 18 18

such time as the question of jurisdiction was

considered by the Court under Section 11, the

question of a separate Tribunal being constituted

by the International Chamber of Commerce did not

arise. According to learned counsel, in fact, the

constitution of the Arbitral Tribunal by the ICC

Court amounted to usurpation of the exclusive

jurisdiction of the Chief Justice under Section 11

of the 1996 Act. It was submitted that initially

the Court would have to be moved under Section 11

of the 1996 Act and it would have to examine

whether it would have the jurisdiction to entertain

the request and whether the condition for exercise

of its powers to take necessary measures to secure

the appointment of the Arbitrator, at all existed.

If the answer to both the issues was in the

affirmative, the Court was duty bound to appoint

the Arbitrator.

Page 19 19

18.On the other hand, on behalf of Devas it was

submitted that the choice of an institution under

whose auspices the arbitration was to be held,

would have to be made once the Arbitral Tribunal

had been constituted. It was contended that what

was intended by the Arbitration Agreement was the

formation of an ad-hoc Tribunal which would have to

follow one of the two procedures prescribed.

19.It was submitted that Devas had already invoked

the Arbitration Agreement and had sought the

constitution of an Arbitral Tribunal, after having

chosen its nominee Arbitrator, in accordance with

the ICC Rules of Arbitration. It was further

submitted that since the Arbitral Tribunal had been

constituted under the ICC Rules, any objection as

to whether or not the Tribunal had been properly

constituted would have to be raised before the

Arbitral Tribunal itself. It is only in such

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objection that the Arbitral Tribunal would have to

decide as to whether a Tribunal was required to be

constituted before application of the ICC or

UNCITRAL Rules, inasmuch as, according to the

Agreement, the Claimant in the arbitration has the

right to choose any of the two Rules when

commencing the arbitration.

20.Reliance was placed on Section 16 of the 1996

Act which incorporates the Kompetenz Kompetenz

principle within its scope. Since the arbitration

was to be governed by Part I of the 1996 Act, the

Tribunal would have complete authority over all

issues, including the validity of its constitution.

21.Reference was also made to the decision of this

Court in Gas Authority of India Ltd. vs. Keti

Construction (I) Ltd. & Ors. [(2007) 5 SCC 38],

wherein the aforesaid principle contained in

Section 16 of the 1996 Act had been referred to.

Page 21 21

Learned counsel submitted that in arriving at the

aforesaid decision, this Court had fully considered

its decision in SBP & Co. (supra). It was submitted

that the question regarding the validity of the

constitution of the Arbitral Tribunal, upon a

proper construction of Article 20 of the Agreement

would, therefore, have to be left for decision to

the said Tribunal.

22.On the question as to whether the Chief Justice

or his Designate would be entitled in exercise of

their jurisdiction under Section 11 of the 1996

Act, to question the validity of the appointment of

an Arbitral Tribunal, both the parties were ad idem

that they could not. It was urged that the decision

in SBP & Co. (supra) does not contemplate such a

course of action. In this regard, reference was

also made by learned counsel for the Respondent to

the decision of this Court in Sudarsan Trading Co.

Page 22 22

vs. Government of Kerala & Anr. [(1989) 2 SCC 38],

wherein it was held that once there is no dispute

as to the contract, the interpretation thereof is

for the Arbitrator and not the Courts, and the

Court cannot substitute its own decision for that

taken by the learned Arbitrator. It was urged that

Section 5 of the 1996 Act also supports such

construction as it bars any interference by the

Court, except as provided in the Act. Learned

counsel also submitted that as had been held by

this Court in McDermott International Inc. vs. Burn

Standard Co. Ltd. & Ors. [(2006) 11 SCC 181], after

the 1996 Act came into force, it was for the party

questioning the authority of the Arbitrator to

raise such question at the earliest point of time

after the commencement of the Arbitration

proceedings, under Section 16 of the 1996 Act, and

a decision thereupon could be challenged under

Section 34 of the said Act.

Page 23 23

23.On behalf of Devas, it was also contended that

the issue raised relating to jurisdiction falls

outside the first category of cases, on account of

the fact that the Petitioner's claim that the

Tribunal must be constituted first before

application of either of the ICC Rules or the

UNCITRAL Rules, essentially involves the question

as to whether the Arbitration clause excludes the

applicability of the Rules prior to the

constitution of the Tribunal and that the

constitution of the Tribunal is, therefore,

reserved for a decision under Section 11 of the

1996 Act. Learned counsel for the Respondent

submitted that in the facts of the case, the Chief

Justice, in exercise of his power under Section

11(6) of the 1996 Act, was not entitled to question

the validity of the appointment of the Arbitral

Tribunal and the instant Arbitration Petition was

liable to be dismissed.

Page 24 24

24.As indicated hereinbefore, the question which

we are called upon to decide is whether when one of

the parties has invoked the jurisdiction of the

International Chamber of Commerce and pursuant

thereto an Arbitrator has already been appointed,

the other party to the dispute would be entitled to

proceed in terms of Section 11(6) of the 1996 Act.

25.In order to answer the said question, we will

have to refer back to the provisions relating to

arbitration in the agreement entered into between

the Petitioner and the Respondent on 28th January,

2005. Article 19 in clear terms provides that the

rights and responsibilities of the parties under

the Agreement would be subject to and construed in

accordance with the laws in India, which, in

effect, means the Arbitration and Conciliation Act,

1996. Article 20 of the Agreement specifically

deals with arbitration and provides that disputes

Page 25 25

between the parties regarding the provisions of the

Agreement or the interpretation thereof, would be

referred to the Senior Management of both the

parties for resolution within three weeks, failing

which the dispute would be referred to an Arbitral

Tribunal comprising of three Arbitrators. It was

also provided that the seat of arbitration would be

New Delhi in India and the arbitration would be

conducted in accordance with the rules and

procedures of the International Chamber of Commerce

or UNCITRAL.

26.The Respondent has invoked the provisions of

Article 20 of the Agreement and has approached the

ICC for the appointment of an Arbitral Tribunal in

accordance with the rules of arbitration and,

pursuant thereto, the Respondent appointed its

nominee Arbitrator. In fact, after the Respondent

had invoked the arbitration clause, the Petitioner

Page 26 26

came to know of the same from the Respondent's

request for arbitration which was forwarded by the

ICC to the Petitioner on 5th July, 2011. By the

said letter, the Petitioner was also invited by the

ICC to nominate its nominee Arbitrator, but, as

mentioned hereinbefore, instead of nominating its

Arbitrator, the Petitioner once again requested

Devas to convene the Senior Management Meet on 27th

July, 2011, in terms of the Agreement.

Simultaneously, the Petitioner appointed a former

Judge of this Court, Mrs. Sujata V. Manohar, as its

Arbitrator and informed the ICC Court accordingly.

However, disputes were also raised by the

Petitioner with the ICC that since the Agreement

clearly intended that the arbitration proceedings

would be governed by the Indian law, which was

based on the UNCITRAL model, it was not available

to the Respondent to unilaterally decide which of

the rules were to be followed. It was only

Page 27 27

thereafter that the Petitioner took recourse to the

provisions of Section 11(4) of the 1996 Act, giving

rise to the questions which have been set out

hereinbefore in paragraph 11, of which only one has

survived for our consideration.

27.Section 11 of the 1996 Act is very clear as to

the circumstances in which parties to a dispute,

and governed by an Arbitration Agreement, may apply

for the appointment of an Arbitrator by the Chief

Justice of the High Court or the Supreme Court.

For the sake of reference, the relevant provisions

of Section 11 are reproduced hereinbelow :-

"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.

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(3)Failing any agreement referred to in

sub-section (2), in an arbitration with

three arbitrators, each party shall appoint

one arbitrator, and the two appointed

arbitrators shall appoint the third

arbitrator who shall act as the presiding

arbitrator.

(4)If the appointment procedure in sub-

section (3) applies and-

(a)a party fails to appoint an

arbitrator within thirty days from the

receipt of a request to do so from the

other party; or

(b)the two appointed arbitrators fail

to agree on the third arbitrator

within thirty days from the date of

their appointment,

the appointment shall be made, upon request

of a party, by the Chief Justice or any

person or institution designated by him.

(5)Failing any agreement referred to in

sub-section (2), in an arbitration with a

sole arbitrator, if the parties fail to

agree on the arbitrator within thirty days

from receipt of a request by one party from

the other party to so agree the appointment

shall be made, upon request of a party, by

the Chief Justice or any person or

institution designated by him.

(6)Where, under an appointment procedure

agreed upon by the parties,-

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(a)a party fails to act as required

under that procedure; or

(b)the parties, or the two appointed

arbitrators, fail to reach an

agreement expected of them under that

procedure; or

(c)a person, including an

institution, fails to perform any

function entrusted to him or it under

that procedure,

a party may request the Chief Justice or

any person or institution designated by him

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."

28.As will be evident from the aforesaid

provisions, when any of the parties to an

Arbitration Agreement fails to act in terms

thereof, on the application of the other party, the

Chief Justice of the High Courts and the Supreme

Page 30 30

Court, in different situations, may appoint an

Arbitrator.

29.In the instant case, Devas, without responding

to the Petitioner's letter written in terms of

Article 20 of the Arbitration Agreement,

unilaterally addressed a Request for Arbitration to

the ICC International Court of Arbitration for

resolution of the disputes arising under the

Agreement and also appointed its nominee

Arbitrator. On the other hand, the Petitioner

appointed its nominee Arbitrator with the caveat

that the arbitration would be governed by the 1996

Act and called upon Devas to appoint its nominee

Arbitrator under the said provisions. As Devas did

not respond to the Petitioner's letter dated 30th

July, 2011, the Petitioner filed the application

under Section 11(6) of the 1996 Act.

Page 31 31

30.In the instant case, the Arbitration Agreement

provides that the arbitration proceedings would be

held in accordance with the rules and procedures of

the International Chamber of Commerce or UNCITRAL.

Rightly or wrongly, Devas made a request for

arbitration to the ICC International Court of

Arbitration on 29th June, 2011, in accordance with

the aforesaid Agreement and one Mr. V.V. Veedar was

appointed by Devas as its nominee Arbitrator. By

the letter written by the International Chamber of

Commerce on 5th July, 2011, the Petitioner was

required to appoint its nominee Arbitrator, but it

chose not to do so and instead made an application

under Section 11(6) of the 1996 Act and also

indicated that it had appointed Mrs. Justice Sujata

V. Manohar, as its Arbitrator in terms of Article

20(9) of the Agreement.

Page 32 32

31.The matter is not as complex as it seems and in

our view, once the Arbitration Agreement had been

invoked by Devas and a nominee Arbitrator had also

been appointed by it, the Arbitration Agreement

could not have been invoked for a second time by

the Petitioner, which was fully aware of the

appointment made by the Respondent. It would lead

to an anomalous state of affairs if the appointment

of an Arbitrator once made, could be questioned in

a subsequent proceeding initiated by the other

party also for the appointment of an Arbitrator.

In our view, while the Petitioner was certainly

entitled to challenge the appointment of the

Arbitrator at the instance of Devas, it could not

do so by way of an independent proceeding under

Section 11(6) of the 1996 Act. While power has

been vested in the Chief Justice to appoint an

Arbitrator under Section 11(6) of the 1996 Act,

such appointment can be questioned under Section 13

Page 33 33

thereof. In a proceeding under Section 11 of the

1996 Act, the Chief Justice cannot replace one

Arbitrator already appointed in exercise of the

Arbitration Agreement. It may be noted that in

case of Gesellschaft Fur Biotechnologische Forschun

GMBH Vs. Kopran Laboratories Ltd. & Anr. [(2004) 13

SCC 630], a learned Single Judge of the Bombay High

Court, while hearing an appeal under Section 8 of

the 1996 Act, directed the claims/disputes of the

parties to be referred to the sole arbitration of a

retired Chief Justice with the venue at Bombay,

despite the fact that under the Arbitration

Agreement it had been indicated that any disputes,

controversy or claim arising out of or in relation

to the Agreement, would be settled by arbitration

in accordance with the Rules of Reconciliation of

the International Chamber of Commerce, Paris, with

the venue of arbitration in Bombay, Maharashtra,

India. This Court held that when there was a

Page 34 34

deviation from the methodology for appointment of

an Arbitrator, it was incumbent on the part of the

Chief Justice to assign reasons for such departure.

32.Sub-Section (6) of Section 11 of the 1996 Act,

quite categorically provides that where the parties

fail to act in terms of a procedure agreed upon by

them, the provisions of Sub-Section (6) may be

invoked by any of the parties. Where in terms of

the Agreement, the arbitration clause has already

been invoked by one of the parties thereto under

the I.C.C. Rules, the provisions of Sub-section (6)

cannot be invoked again, and, in case the other

party is dissatisfied or aggrieved by the

appointment of an Arbitrator in terms of the

Agreement, his/its remedy would be by way of a

petition under Section 13, and, thereafter, under

Section 34 of the 1996 Act.

Page 35 35

33.The law is well settled that where an

Arbitrator had already been appointed and

intimation thereof had been conveyed to the other

party, a separate application for appointment of an

Arbitrator is not maintainable. Once the power has

been exercised under the Arbitration Agreement,

there is no power left to, once again, refer the

same disputes to arbitration under Section 11 of

the 1996 Act, unless the order closing the

proceedings is subsequently set aside. In Som Datt

Builders Pvt. Ltd. Vs. State of Punjab [2006 (3)

RAJ 144 (P&H)], the Division Bench of the Punjab &

Haryana High Court held, and we agree with the

finding, that when the Arbitral Tribunal is already

seized of the disputes between the parties to the

Arbitration Agreement, constitution of another

Arbitral Tribunal in respect of those same issues

which are already pending before the Arbitral

Page 36 36

Tribunal for adjudication, would be without

jurisdiction.

34. In view of the language of Article 20 of the

Arbitration Agreement which provided that the

arbitration proceedings would be held in accordance

with the rules and procedures of the International

Chamber of Commerce or UNCITRAL, Devas was entitled

to invoke the Rules of Arbitration of the ICC for

the conduct of the arbitration proceedings.

Article 19 of the Agreement provided that the

rights and responsibilities of the parties

thereunder would be subject to and construed in

accordance with the laws of India. There is,

therefore, a clear distinction between the law

which was to operate as the governing law of the

Agreement and the law which was to govern the

arbitration proceedings. Once the provisions of the

ICC Rules of Arbitration had been invoked by Devas,

Page 37 37

the proceedings initiated thereunder could not be

interfered with in a proceeding under Section 11 of

the 1996 Act. The invocation of the ICC Rules

would, of course, be subject to challenge in

appropriate proceedings but not by way of an

application under Section 11(6) of the 1996 Act.

Where the parties had agreed that the procedure for

the arbitration would be governed by the ICC Rules,

the same would necessarily include the appointment

of an Arbitral Tribunal in terms of the Arbitration

Agreement and the said Rules. Arbitration Petition

No.20 of 2011 under Section 11(6) of the 1996 Act

for the appointment of an Arbitrator must,

therefore, fail and is rejected, but this will not

prevent the Petitioner from taking recourse to

other provisions of the aforesaid Act for

appropriate relief.

Page 38 38

35. The Arbitration Petition is, therefore,

dismissed.

36.Having regard to the facts of the case, each

party shall bear its own costs.

...................CJI.

(ALTAMAS KABIR)

..................... J.

(SURINDER SINGH NIJJAR)

New Delhi

Dated: May 10, 2013.