UNION OF INDIA Vs. BESCO LTD.

JUDGEMENT

(1.) CIVIL APPEAL NO. 4483 OF 2017 (Arising out of S.L.P.(C) No. 17838 of 2014)

(2.) The short question arising for consideration in this case is whether the Chief Justice of a High Court or any person or institution designated by him, while exercising power under Sec. 11(6) of The Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") is bound to nominate an arbitrator as specified in the agreement for arbitration. The designated Judge in the High Court took the view that the appellant has lost the mandate to appoint an arbitrator since it failed to appoint the arbitrator within the permitted time and hence nominated an independent arbitrator.

(3.) Mr. Maninder Singh, learned Additional Solicitor General, placing reliance on Union of India and another Vs. M.P. Gupta, (2004) 10 SCC 504 and Union of India and others Vs. Master Construction Company, (2011) 12 SCC 349, submitted that the designated Judge, exercising the power under Sec. 11(6) of the Act, is bound to nominate a person as stipulated in the agreement for arbitration. In M.P. Gupta (supra), the relevant clauses on arbitration contained a provision that the arbitrators should be Gazetted Railway Officers. It may also be relevant in this context to note that the arbitration agreement contained a specific provision that it is a term of contract that no person other than a gazetted railway officer should act as an arbitrator/umpire and if for any reason, that is not possible, the matter is not to be referred to arbitration at all. This Court hence set aside the order passed by the designated Judge who had nominated a retired Judge as the sole arbitrator. In Master Construction Company (supra), the question in issue was, in fact, left open.