KINNARI MULLICK Vs. GHANSHYAM DAS DAMANI

JUDGEMENT

(1.) The award is challenged on two main grounds, but it may not be necessary to conclusively decide on the legal issue involved in the first ground since the second ground appears to be good enough. The agreement between the parties pertained to the development of a property at Wood Street. Disputes and differences arose between the parties, whereupon the respondents issued a letter on October 21, 2009 indicating their nominee as the arbitrator. The person named by the respondents understood the nomination to be the appointment and addressed a letter to the petitioners herein on December 1, 2009, though the letter erroneously records the date as November 1, 2009.

(2.) The arbitration agreement between the parties is short and simple and requires disputes and differences between the parties to the agreement to "be referred to arbitration in terms of provisions of the Arbitration and Conciliation Act, 1996." There is no procedure for constitution of the arbitral tribunal that agreed to between the parties and recorded in the arbitration agreement. Ordinarily, when the arbitration agreement between the parties does not provide for the manner of constitution of the arbitral tribunal, it is open to the parties to subsequently agree on a procedure therefor, or it is open to one party to name an arbitrator or an arbitral tribunal and require the other party or parties to agree thereto. In the present case, the respondents took it upon themselves to nominate an arbitrator despite the agreement not reserving such right unto the respondents. Surprisingly, the petitioners did not raise any objection to the appointment either upon receiving the respondents' letter of October 21, 2009 or upon receiving the arbitrator's letter of December 1, 2009. Indeed, there were six sittings before the arbitrator till or about April, 2010 in which the petitioners herein participated. The reference may not have progressed much but directions were obtained for filing pleadings and the statement of claim was filed and extensions were granted for the counter-statement to be lodged.

(3.) It was only in course of the seventh sitting in the reference, in May, 2010, that the petitioners lodged an application questioning the arbitrator's authority to take up the reference. The challenge was fashioned under Section 16 of the 1996 Act, though the challenge was to the personnel of the arbitrator since the petitioners had not expressly agreed to the respondent's nominee to adjudicate upon the disputes covered by the arbitration agreement.