Parties can choose an arbitrator to resolve a dispute under Sections 11 (5) and 11 (6) of the Arbitration and Conciliation Act, 1996. When a written agreement for the appointment of an arbitrator is not present, the arbitrator will appoint using section 11 (5) rather than 11 (6) as declared by the Supreme Court of India.
Furthermore, once the parties have agreed on the sole arbitrator, they cannot invoke the agreement a second time.
The matter is referred to an arbitrator in the context of a family dispute over property split. The parties revoked the sole arbitrator’s mandate in the arbitrator proceeding.
When the respondents learned of the delay in the arbitration proceeding, they filed an application in the district court under Section 14(1) (a) of the Arbitration & Conciliation Act to have the sole arbitrator's mandate terminated.
In response to this, the other respondent filed an application under Order 7 Rule 11 of the CPC to quash the first respondent's application, claiming that the arbitration hearing is advancing without delay.
The first respondent's application was denied by the district court. As a result, the first respondent went to the High Court. The high court granted respondent no. 1's application and agreed that the solitary arbitration proceeding is delayed. Under section 11 (6) of the A&C Act, the high court ordered the appointment of a new arbitrator and the termination of the former one.
Respondent No. 2 files an application in the Supreme Court against the high court's order. The second respondent claimed that the high court's order was erred. According to the A&C act, if the parties mutually designated a solitary arbitrator under section 11 (5), a new arbitrator cannot be appointed under section 11 (6).
The appellant makes a number of arguments in support of section 11 (6). The appellant also claimed that the high court ruling could not be upheld in the absence of a written contract between the parties, as required by section 11(6) of the A&C Act.
The apex court found that the sole arbitrator was selected with the parties' mutual assent and that there was no written agreement to appoint a new arbitrator after examining the case.
The court noted that in the event of an unforeseen circumstance, the party might petition the high court to appoint a new arbitrator under section 11 (6) of the A&C Act. However, there is no need to appoint a new arbitrator if no such condition applies.
As a result, the court determined that there is no need to use section 11 (6) in this matter and the high court's decision to appoint a new arbitrator under the same section is not maintainable.