REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO .8 OF 2010

(Arising Out of SLP© No. 19471 of 2007)

N.B.C.C. Ltd. ….Appellant

Versus

J.G. Engineering Pvt. Ltd. …. Respondent

WITH

CIVIL APPEAL NO.9 OF 2010

(Arising out of SLP©No.22243 of 2008)

J U D G M E N T

TARUN CHATTERJEE, J.

1. Leave granted.

2. These appeals are directed against the final Judgments and

orders dated 23

rd

of March, 2006, and 21

st

of September,

2007 passed by the High Court at Calcutta in G.A. No.235 of

2006 arising out of A.P. No. 361 of 2005, whereby the High

Court had allowed the petition of the respondent and thereby

terminated the mandate of the arbitrator and thus appointed a

new Arbitrator for deciding the dispute between the parties.

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3. In order to appreciate the controversy existing between the

parties, it may be important to narrate the facts as emerging

from the case made by the appellant, which are as follows :-

In the month of December 1992, the appellant had issued

notice inviting tender for construction of terminal buildings and

various ancillary jobs at the Bhubaneshwar Airport at Bhubaneshwar,

Orissa. The respondent submitted its offer, which was accepted by

the appellant.

On 30

th

of March, 1993, the appellant entered into a contract

with the respondent for construction of the aforesaid work at the

Bhubaneshwar Airport for a total consideration of Rs.

5,71,13,541.33/-. The date of commencement of the work was fixed

on 1

st

of March, 1993 and the stipulated date of completion was 31

st

of October, 1994. However, on 20

th

of March, 1996, the appellant

terminated the contract of the respondent alleging that the

respondent had failed to fulfill its part of the obligations required

under the contract. On 20

th

of May, 1996, the respondent invoked the

arbitration clause and sought for an appointment of an arbitrator for

adjudication of the disputes between the parties. On 9

th

of August,

1996, the Chairman-cum-Managing Director of the appellant

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appointed a sole arbitrator to adjudicate upon the claims and counter

claims of the parties. The appellant filed its counter claim on 30

th

of

April, 1997 before the sole arbitrator. The respondent submitted its

rejoinder and objections to the counter claims on 12

th

of May, 2001,

after about 4 years from the date of reply by the appellant. During this

period, the appellant had virtually closed its regional office in Calcutta

as most of the work done in its office was completed. This, according

to the appellant, caused in several transfers of the arbitrators

appointed by the appointing authority. Meanwhile, the appointing

authority had appointed three arbitrators due to the above-mentioned

reason and the arbitration process had come to a stand still due to

the inaction of the respondent and its failure to participate.

Thereafter, on 20

th

of May, 2004, the respondent filed an

application before the Calcutta High Court seeking removal of the

then incumbent arbitrator and the arbitral proceedings were stayed by

the Court. On 20

th

of September, 2004, the High Court directed the

Chairman-cum-Managing Director of the appellant company to

appoint a new arbitrator in terms of the arbitration clause within a

period of four weeks from the date of communication of its order. The

High Court further directed the arbitrator so appointed to conclude the

3

arbitration proceedings within a period of six months from the date of

his appointment. Pursuant to the order of the High Court, the

Chairman-cum-Managing Director of the appellant company

appointed Shri A.K. Gupta, Deputy General Manager of the appellant

as the sole arbitrator. The said arbitrator finally concluded the

proceedings after hearing on 18

th

of June, 2005. It is an admitted

position that the time to conclude the arbitration proceeding in terms

of the order of the High Court before Shri A. K. Gupta, who was

appointed as the sole arbitrator by the Chairman-cum-Managing

Director of the company had by then already expired.

However, both the parties extended the time to conclude the

arbitration proceeding and to pass an award accordingly, the time

was enlarged for conclusion of the arbitration to 30

th

of September,

2005.

It is also an admitted position that the time limit so fixed i.e.

arbitration must be concluded and award must be passed within 30

th

of September, 2005, could not be adhered to by the arbitrator and he

failed to publish the award within this period. About three months

after the expiry of the period of concluding the proceeding and

passing of the award, it was the respondent who moved an

4

application before the High Court for a declaration that the mandate

of the arbitrator had already stood terminated. We may keep it on

record that the appellant had not filed any application for enlargement

of time for the conclusion of the arbitration proceeding or to pass the

award after the expiry of the period.

On 22

nd

of December, 2005, the High Court, vide an interim

order, restrained the arbitrator from making an award and at the

same time, had refused to accept the award produced by the

arbitrator before it which were well beyond the period fixed by the

High Court. On 23

rd

of March, 2006, the High Court, by its impugned

order, terminated the mandate of the arbitrator on the ground of delay

in making the award. The appellant then challenged the above

mentioned order of the Calcutta High Court before this Court vide

SLP No.19471 of 2007 on 12

th

of September, 2007. At the same

time, the High Court by the impugned order dated 21

st

of September,

2007 passed in AP No. 361/2005 appointed Mr. Justice Chittatosh

Mookherji (As His Lordship then was) as the sole arbitrator to

adjudicate the disputes between the parties. The appellant, feeling

aggrieved by this order as well has filed a special leave petition which

came to be registered as SLP No. 22243 of 2008, which after hearing

5

the learned counsel for the parties and on grant of leave, was heard

in presence of the learned counsel for the parties.

4. We have heard the learned counsel appearing on behalf of

the parties and examined the impugned orders of the High

Court and also other materials on record in depth and in

detail. As noted herein earlier, the respondent had made an

application before the Calcutta High Court under Section 14

of the Arbitration and Conciliation Act, 1996 (in short the

“Act”) for a declaration that the mandate of the arbitrator Shri

A.K. Gupta had already stood terminated. As had already

been mentioned above, the appointing authority had

appointed three arbitrators prior to the appointment of Shri

Gupta who were all unable to conduct the arbitral

proceedings for some reason or the other. It may be kept on

record that the respondent filed an application before the

High Court for a declaration that the appointment of the

arbitrator namely, Shri Amitava Basu, who was appointed as

the sole arbitrator prior to the appointment of Shri A. K. Gupta

had stood terminated by an order dated 20

th

of September,

2004, by which the High Court had terminated the

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appointment and ordered the appointing authority of the

appellant to appoint a new arbitrator who will conclude the

proceeding and pass an award within six months from the

date of his appointment. Subsequent to this order of the High

Court, the appellant appointed Mr. AK Gupta as the new

arbitrator who was to complete his proceedings by 27

th

of

March, 2005 i.e. six months from the date of his appointment.

It is pertinent to mention that the appellant did not file any

appeal against the above-mentioned order of the High Court.

Therefore, it may be taken that the appellant had accepted

the aforesaid order of the High Court and thereby accepted

its decision to fix the time of the arbitration proceedings to be

mandatorily concluded within six months from the date of

appointment of the arbitrator. The order, thus having

assumed finality, a time limit was imposed for the conclusion

of the arbitration proceedings. Thus, the appellant is

estopped from raising any objection against the imposition of

the time limit as had been done by the Court in this respect.

From the records before us, we have noticed that inspite of

conducting a number of proceedings, the arbitrator was

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unable to conclude the proceedings within the time fixed by

the High Court. The arbitration clause in the contract enables

the arbitrator to extend the time for making and publishing the

award by mutual consent of the parties. From a perusal of

the documents before us, we notice that the parties mutually

agreed to extend the time till 31

st

August, 2005 for making

and publishing the award, which were further extended by the

parties till 30

th

of September, 2005 on account of the

arbitrator having failed to conclude the proceedings within the

previous date fixed by the parties. But the arbitrator having

failed to do so by 30

th

of September, 2005, the respondent

moved the High Court to terminate the mandate of the

arbitrator as he had failed to conclude the proceedings within

the time limit fixed by the parties. The High Court accordingly

terminated the mandate of the arbitrator on account of his

failure to publish the award within the time fixed by the

parties. We are of the opinion that the High Court was

perfectly justified in doing so on an application filed by the

respondent before it. Quite interestingly, it has come to our

notice that the arbitrator in question had appeared before the

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High Court and submitted that the award was ready but the

same could not be published on account of the interim order

passed by the same restraining him from publishing it. There

was, however, no order of the Court restraining the arbitrator

from publishing the award till almost three months after the

expiry of the time fixed by the mutual consent of the parties to

make and publish the award prior to the interim order passed

by the High Court.

5. A perusal of the arbitration agreement quite clearly reveals

that the arbitrator has the power to enlarge the time to make

and publish the award by mutual consent of the parties.

Therefore, it is obvious that the arbitrator has no power to

further extend the time beyond that which is fixed without the

consent of both the parties to the dispute. It is an admitted

position that the respondent did not give any consent for

extension of time of the arbitrator. Thus given the situation,

the arbitrator had no power to further enlarge the time to

make and publish the award and therefore his mandate had

automatically terminated after the expiry of the time fixed by

the parties to conclude the proceedings. The learned counsel

9

contended that the arbitration proceedings involved questions

of highly technical and complex issues which would require

sufficient amount of time to be decided in a just and proper

way. However the records clearly illustrate that even after a

passage of over nine years, the matter which was to be

decided between the parties by way of arbitration, could not

be resolved and the process lingered on. Arbitration is an

efficacious and alternative way of dispute resolution between

the parties. There is no denying the fact that the method of

arbitration has evolved over the period of time to help the

parties to speedily resolve their disputes through this process

and in fact the Act recognizes this aspect and has elaborate

provisions to cater to the needs of speedy disposal of

disputes. The present case illustrates that inspite of adopting

this efficacious way of resolving the disputes between the

parties through the arbitration process, there was no outcome

and the arbitration process had lingered on for a considerable

length of time which defeats the notion of the whole process

of resolving the disputes through arbitration. The contention

of the appellant therefore cannot be justified that since the

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dispute was highly technical in nature, it had to be dealt with

elaborately by the arbitrator and thus, he was justified in

being late. The High Court had thus correctly fixed the time

for the arbitration to be concluded within a period of six

months from the appointment of the fourth arbitrator Shri A.K.

Gupta considering the time that had been spent for the

arbitration process prior to Mr. Gupta’s appointment. That

apart, even assuming that the arbitration process involved

highly technical and complex issues, which was time

consuming, even then, it was open for the arbitrator or for the

parties to approach the Court for extension of time to

conclude the arbitration proceeding which was not done by

either by the arbitrator or by any of the parties. As had been

correctly noted by the High Court in its impugned judgment,

there was no cogent reason for the delay in making and

publishing the award by the arbitrator. He already had the

relevant materials at his disposal and could base his findings

on the observations made by the three arbitrators who were

appointed prior to him. The Arbitrator was bound to make

and publish his award, within the time mutually agreed to by

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the parties, unless the parties consented to further

enlargement of time. Therefore, the condition precedent for

enlargement of time would depend only on the consent of the

parties, that is to say, that if the parties agree for enlargement

of time. If consent is not given by the parties, then the

authority of the arbitrator would automatically cease to exist

after the expiry of the time limit fixed. In the present case, the

arbitrator had failed to publish the award within the time limit

fixed by the parties, and hence, the High Court was justified

in terminating the mandate of the arbitrator. We therefore do

not find any fault with the impugned order of the High Court in

this regard. From a perusal of the records, we can see that

the respondent had filed an application to terminate the

mandate of the arbitrator before the High Court almost after

three months from the date of expiry of the time to publish the

award although the appellant did not choose to file any

application for enlargement of time for conclusion of the

arbitration proceeding. It is obvious that the respondent

could not have possibly known about the outcome of the

award. Even after the expiry of the time as mentioned above,

12

the arbitrator did not make any effort to publish the award nor

was anything conveyed on behalf of the appellant to the

respondent for extending the time of the arbitrator to publish

his award. It was a clear lapse on the part of both the

arbitrators and the appellant who was well aware that the

mandate of the arbitrator had already expired and it could

only be extended by a mutual consent of the parties

according to the arbitration agreement.

It has been correctly observed by the High Court that the arbitrator

had become functus officio in the absence of extension of time

beyond 30

th

of September, 2005 to make and publish the award. After

the said date, the arbitrator had no authority to continue with the

arbitration proceedings. The learned counsel appearing on behalf of

the appellant argued that in the absence of any statutory period

prescribed under the Act for rendering an award, the direction of the

Court to conclude the arbitration proceedings within the time

prescribed by it, would not make an award passed beyond the time

so prescribed, null and void. He further argued that the High Court

was wrong in not extending the time fixed by it in the order dated 20

th

of September, 2004, for early conclusion of the arbitration

13

proceedings and terminating the mandate of the arbitrator when

neither the Act nor the arbitration agreement prescribed any time for

making and publishing the award.

6.The learned counsel appearing on behalf of the appellant had

drawn our attention to a decision of this Court in Jatinder Nath Vs.

M/s Chopra Land Developers Pvt. Ltd. & Anr. [AIR 2007 SC 1401]

to satisfy us that the award which was passed after four months of

entering upon reference does not ipso facto become nonest and the

Court has power to extend time and give life to the vitiated award. So

far as this decision is concerned, we may keep it on record that this

decision was rendered under the Arbitration Act of 1940 and not

under the present act with which we are only concerned. In view of

our reasonings given hereinafter and in view of the facts involved in

this case, we do not find any ground to rely on this decision of this

Court for the purpose of this case. The other decision cited by the

learned counsel for the appellant is the decision reported in General

Manager, Department of Telecommunications,

Thiruvananthapuram Vs. Jacob S/o Kochuvarkey Kalliath (Dead)

by LRs. And Others [2003 (9) SCC 662]. The learned counsel

14

particularly relied on para 8 of the said decision. We have carefully

gone through para 8 of the decision relied on by the learned counsel

for the appellants. We may not forget that we are concerned in this

case with the Arbitration and Conciliation Act, 1996 and not under the

Land Acquisition Act, 1894. Without going into the details of this

decision, we may simply say that this decision cannot have any

manner of application and the principles laid down to the facts and

circumstances of the present case. The last decision, which was

cited by the learned counsel for the appellant is the decision reported

in National Aluminum Co. Ltd. Vs. Pressteel & Fabrications (P)

Ltd. and Another [2004 (1) SCC 540]. In our view, this decision also

is of no help to the appellant. The principles laid down in the said

decision cannot have any application in the present case although the

decision rendered in this case is the decision under the Arbitration

and Conciliation Act, 1996.

7.Taking into consideration the arguments of the appellant, it is

necessary to mention here that the Court does not have any power to

extend the time under the Act unlike Section 28 of the 1940 Act which

had such a provision. The Court has therefore been denuded of the

power to enlarge time for making and publishing an award. It is true

15

that apparently there is no provision under the Act for the Court to fix

a time limit for the conclusion of an arbitration proceeding, but the

Court can opt to do so in the exercise of its inherent power on the

application of either party. Where however the Arbitration agreement

itself provides the procedure for enlargement of time and the parties

have taken recourse to it, and consented to the enlargement of time

by the arbitrator, the Court cannot exercise its inherent power in

extending the time fixed by the parties in the absence of the consent

of either of them.

8.The counsel for the appellant further contended that the High

Court could not have terminated the mandate of the arbitrator on the

ground that the award was passed beyond the time limit fixed by it. It

is clear from an apparent perusal of the judgment of the High Court

and the records before us that the High Court had not terminated the

mandate of the arbitrator on the ground that the arbitrator could not

pass the award within the time fixed by it vide its order dated 20

th

of

September, 2004. In fact, the arbitrator had continued to proceed

with the arbitration procedure after the time fixed by the Court had

expired on account of the mutual consent of the parties to extend the

time limit. Such an action was clearly warranted under the arbitration

16

agreement in force between the parties. On the contrary, the

arbitrator had ceased to have any authority only after the time limit

fixed by the parties had expired and the respondent did not give

consent to the extension of the time for publishing the award. Thus,

such a contention of the appellant cannot be accepted. The High

Court had merely asserted this fact that the mandate of the arbitrator

had automatically expired after the time fixed by the parties to the

effect that it had lapsed.

9.The Appellant further argued that the High Court had failed to

appreciate that the parties had undergone the process of arbitration

for a long time and it was not wise to terminate the mandate of the

arbitrator when the award was ready and fit to be published,

considering the fact that a huge sum of money had been spent during

the proceedings. Therefore, the High Court should not have ordered

the appointment of a new arbitrator. It is to be noted that the High

Court in its impugned judgment had ordered Shri A.K. Gupta to hand

over the relevant materials relating to the proceedings to the newly

appointed arbitrator. Thus, such an action would inherently make it

clear for the newly appointed arbitrator to conduct the proceedings

17

and it is not required from him to start the proceedings from scratch

all over again. Further, if the award was ready as had been

contended by the appellant, it is baffling that even after three months

from the expiry of the period fixed by the parties for publication of the

award, the arbitrator had not come out with the award or had notified

the respondent that the award was ready. It was only when the High

Court restrained the arbitrator from coming out with any award in the

dispute that the arbitrator submitted before the Court that the award

was ready to be published. At the risk of repetition, we may once

again note, that the Court has no inherent power to enlarge the time

for publication of the award once it has not been extended by the

parties to that effect.

10.The appellant further argued that the arbitrator having

concluded the proceedings couldn’t be said to have failed to act so as

to attract the provisions of Section 14 of the Act and call for

termination of the mandate of the arbitration. He had also contended

that under Section 15 (2) of the Act, substitute arbitrator should be

appointed according to the rules that were applicable to the

appointment of the arbitrator. Accordingly, his contention was that the

High Court had erred in holding that the appointing authority had not

18

appointed an arbitrator while terminating the mandate of the arbitrator

in the same proceedings.

It is necessary to mention here Section 14 and Section 15 of the Act

for the sake of convenience.

“Section 14: Failure or impossibility to act –

(1)The mandate of an arbitrator shall terminate if-

(a) He becomes de jure or de facto unable to perform his

functions or for other reasons fails to act without undue delay;

and

(b) He withdraws from his office or the parties agree to the

termination of his mandate.

(2) If a controversy remains concerning any of the grounds

referred to in clause (a) of subsection (1), a party may, unless

otherwise agreed by the parties, apply to the court to decide on

the termination of the mandate.

(3)If, under this section or sub-section (3) of section 13, an

arbitrator withdraws from his office or a party agrees to the

termination of the mandate of an arbitrator, it shall not imply

19

acceptance of the validity of any ground referred to in this

section or sub-section (3) of section 12.”

“Section 15: Termination of mandate and substitution of

arbitrator-

(1)In addition to the circumstances referred to in section 13 or

section 14, the mandate of an arbitrator shall terminate-

(a) Where he withdraws from office for any reason; or

(b) By or pursuant to agreement of the parties

(2) Where the mandate of an arbitrator terminates, a substitute

arbitrator shall be appointed according to the rules that were

applicable to the appointment of the arbitrator being replaced.

(3)Unless otherwise agreed by the parties, where an arbitrator

is replaced under subsection (2), any hearings previously held

may be repeated at the discretion of the arbitral tribunal.

(4)Unless otherwise agreed by the parties, an order or ruling of

the arbitral tribunal made prior to the replacement of an

arbitrator under this section shall not be invalid solely because

there has been a change in the composition of the arbitral

tribunal.”

20

11.With reference to the contention made by the appellant that the

arbitrator having concluded the proceedings couldn’t be said to have

failed to act so as to attract the provisions of Section 14 of the Act,

which will call for termination of the arbitration proceeding. It is

pertinent to mention here that the arbitrator had not concluded the

proceedings as had been agreed to by the parties within the time

fixed for doing so. The mandate of the arbitrator was terminated only

because of the fact that the arbitrator having failed to conclude his

proceedings within time did not warrant to be continued as an

arbitrator in the absence of the consent of both the parties. It is clear

from a bare reading of sub section 1 (a) of section 14 of the Act, the

mandate of an arbitrator shall terminate if he fails to act without

undue delay. In the present case, it is clear that the arbitrator had

extended the time provided to it without any concrete reasons

whatsoever and thus his mandate was liable to be terminated. Sub

section 1(b) further states that the mandate of an arbitrator shall also

stand to be terminated if he withdraws from his office or the parties

agree to the termination of his mandate. From the perusal of the

records and the submissions of the parties, we observe that the

mandate of the arbitrator was extended by an agreement between

21

the parties, which was not extended beyond 30

th

September, 2005.

Thus it can be construed that the parties had not agreed to the

extension of the mandate of the arbitrator failing which, the mandate

was automatically terminated.

12.Further, Subsection (2) of Section 14 of the Act stipulates that if

a controversy remains concerning any of the grounds referred to

under clause (a) of subsection 1, a party may, unless otherwise

agreed to by the parties, apply to the Court to decide on the

termination of the mandate. Thus the respondent rightly applied to the

Court for the termination of the mandate of the arbitrator pursuant to

the provisions of this section, and the Court was within its jurisdiction

to decide accordingly.

13.However, the contention of the Appellant that the High Court

had erred in not allowing the appellant to decide upon the

appointment of an arbitrator pursuant to sub-section (2) of Section 15

of the Act must be accepted. Section 15 (2) of the Act provides that

where the mandate of an arbitrator terminates, a substitute arbitrator

shall be appointed according to the rules that were applicable to the

appointment of the arbitrator replaced. In this connection, it would be

appropriate to refer to the relevant portion of the impugned judgment

22

of the High Court, which gives an elaborate observation on the

above-mentioned issue raised by the appellant:

“The question therefore is, whether in view of section 15

(2) of the 1996 Act, an independent arbitrator can be

appointed by this Court as prayed for by the appellant or

whether the appellant should once again invoke the

Arbitration Clause, call upon the Chairman-cum-

Managing Director of the respondent to appoint an

arbitrator, wait for a further period of 30 days, to see

whether the Chairman-cum-Managing Director acts or not

and then make a request to the Hon’ble Chief Justice or

his designate under Section 11(6) of the 1996 Act to

appoint an arbitrator.

Arbitration is an informal, quick and easy alternative

mode of adjudication of disputes by agreement of the

parties. This Court cannot but take judicial notice of the

fact that the Arbitration Clause was invoked way back in

May 1996 and almost 10 years have expired since then.

The appointment of successive Arbitrator by the

Chairman-cum-Managing Director of the respondent has

only resulted in delay.

When the mandate of an arbitrator is terminated on the

ground of delay, the rules applicable to the appointment

of the arbitrator are to apply to the appointment of a new

arbitrator. It would, however, be a mockery of justice, if

every time the mandate of an arbitrator was terminated or

the arbitrator resigned or otherwise became unable to

proceed, the parties were to start from scratch, by

invoking the Arbitration Clause.

Once the mandate of the arbitrator terminates, the person

required to appoint arbitrator is required to fill up the

vacancy with utmost expedition, failing which the

provisions of section 11 (6) of the 1996 Act would be

attracted. In the instant case, as per the Arbitration

agreement the Chairman-cum-Managing Director was

23

required to appoint a new arbitrator in case the arbitrator

became unable to continue, whatever be the reason.

Even thought the time limit for conclusion of arbitration

expired on 30

th

September, 2005, the Chairman-cum-

Managing Director of the respondent did not appoint

another arbitrator.”

14.We have carefully examined the aforesaid observations of the

impugned judgment of the High Court. We are of the view that in view

of a three-Judge Bench decision of this Court in the case of Northern

Railway Administration, Ministry of Railway vs. Patel

Engineering Company Ltd. [2008 (10) SCC 240] in which a decision

of this Court in Ace Pipeline Contracts Private Limited vs. Bharat

Petroleum Corporation Limited [(2007) 5 SCC 304] was also

referred to, the application for appointment of an Arbitrator under

Section 11 of the Act should be referred back to the High Court for

fresh decision. Arijit Pasayat, (as His Lordship then was), heading a

three-Judge Bench of this Court after considering the scope and

object of the Act particularly Section 11 of the Act concluded the

following :-

“A bare reading of the scheme of Section 11 shows

that the emphasis is on the terms of the agreement being

adhered to and/or given effect as closely as possible. In

other words, the Court may ask to do what has not been

24

done. The court must first ensure that the remedies

provided for are exhausted. It is true as contended by Mr.

Desai, that it is not mandatory for the Chief Justice or any

person or institution designated by him to appoint the

named arbitrator or arbitrators. But at the same time, due

regard has to be given to the qualifications required by

the agreement and other considerations.

xxxxxxxxxxxxxx

In all these cases at hand the High Court does not

appear to have focused on the requirement to have due

regard to the qualifications required by the agreement or

other considerations necessary to secure the

appointment of an independent and impartial arbitrator. It

needs no reiteration that appointment of the arbitrator or

arbitrators named in the arbitration agreement is not a

must, but while making the appointment the twin

requirements of Sub-section (8) of Section 11 have to be

kept in view, considered and taken into account. If it is not

done, the appointment becomes vulnerable. In the

circumstances, we set aside the appointment made in

each case, remit the matters to the High Court to make

fresh appointments keeping in view the parameters

indicated above.”

In the aforesaid decision in the case of Northern Railway

Administration (Supra), Arijit Pasayat, J. (as His Lordship then was),

held that the High Court in the said case did not appear to have

focused on the requirement to have due regard to the qualifications

required by the agreement or other conditions necessary to secure

the appointment of an independent and impartial arbitrator. In the

aforesaid decision, this Court also concluded that since the

25

requirement of sub-section (8) of Section 11 was not at all dealt with

by the High Court in its order, the appointment of an arbitrator without

dealing with Sub-Section 8 of Section 11 of the Act became

vulnerable and accordingly, such appointment must be set aside.

Similar is the position in this case. In this case also, before

appointing an arbitrator under Section 11(6) of the Act, the High Court

had failed to take into consideration the effect of Section 11(8) of the

Act as was done in Northern Railway Administration (supra).

15.In view of the discussions made hereinabove and particularly,

in view of the principles laid down by this Court in Northern Railway

Administration (supra), we set aside the impugned order and

remand the case back to the High Court for fresh decision of the

application under Section 11(6) of the Act and while considering the

application afresh, the High Court is directed to take into

consideration the aforesaid decision of this Court.

16.The appeals are thus allowed to the extent indicate above.

There will be no order as to costs.

…………………...J .

[Tarun Chatterjee]

New Delhi; …………………….J.

January 05, 2010. [Aftab Alam]

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