B.B.A., L.L.B (Hons.

) / Fifth Semester- 2018-19

FINAL DRAFT

ALTERNATIVE DISPUTE RESOLUTION

Research Paper Topic: APPOINTMENT OF ARBITRATORS IN INDIA

Submitted By:

Aayush Sachdeva , Roll No: 50

Submitted To:

Ms. Jharna

Proffessor(Interpretation of Statutes)

School of Law, NMIMS( Deemed to be University)

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TABLE OF CONTENTS

S.NO. HEADING PAGE

NUMBERS
1. INTRODUCTION 3
2. NUMBER OF ARBITRATORS 4
3. QUALIFICATION OF ARBITRATORS 4-5
4. NATIONALITY OF THE ARBITRATOR 5
5. NAMED PERSON OR AUTHORITY AS 5-6
ARBITRATOR
6. EXISTENCE OF ARBITRATION CLAUSE 6-7
7. EXISTENCE OF ‘DISPUTE’ A PRECONDITION OF 7-8
THE RIGHT TO SEEK APPOINTMENT
8. ANTI-SUIT PROCEEDINGS 8
9. APPOINTMENT OF ARBITRATOR THROUGH 8-12
COURT ASSISTANCE
10. APPOINTMENT OF THE THIRD / PRESIDING 12-13
ARBITRATOR
11. APPOINTMENT OF PRESIDING ARBITRATOR BY THE 13
ARBITRAL INSTITUTION
12. REFUSAL BY OR FAILURE OF ONE PARTY TO APPOINT 13-14
13. CHALLENGE TO THE ORDER OF APPOINTMENT 14
14. BIBLIOGRAPHY 15

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INTRODUCTION
Arbitration might be characterized as "the process by which a dispute or difference between at
least two parties as to their mutual legal rights and liabilities is alluded to and decided judicially
and with binding impact by the utilization of law by at least one persons (the arbitral tribunal)
instead of by a courtroom".

There can be reference to arbitration just if there is an arbitration agreement between the parties.
The Act clarifies that an authority can be appointed under the Act at the example of a party to an
arbitration agreement just in regard of disputes with another party to the arbitration agreement. In
the event that there is a dispute between a party to an arbitration agreement, with different parties
to the arbitration agreement as additionally non-parties to the arbitration agreement, reference to
arbitration or appointment of referee can be just concerning the parties to the arbitration
agreement and not the non-parties.

The wellspring of the jurisdiction of the referee is the arbitration clause. The arbitration clause is
regularly a piece of the fundamental contract overseeing the parties. An arbitration agreement
then again constitutes a different agreement, particular from the primary contract, and is binding
on the parties. Parties can, even after the disputes have emerged, consent to have their disputes
alluded to arbitration. The agreement, be that as it may, must be in composing. In spite of the fact
that contracts are required to be marked by the parties, arbitration clause require not be marked
by the parties. An arbitration clause is binding if the parties have given their express or implied
or tacit consent to allude the disputes to arbitration. Subject to the law of limitation, parties can
allude their disputes to arbitration whenever.

There are two types of arbitration to be specific, ad hoc and institutional arbitration. The two
structures have isolate system for appointment of arbitrators. In ad hoc arbitrations, parties make
their own courses of action for determination of arbitrators and for assignment of tenets, relevant
law, procedures and administrative help. Be that as it may, an institution administers the arbitral
process according to the institutional guidelines on installment of administrative expenses by the
parties. The institution likewise enables the parties to choose arbitrator(s) from the institution's

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panel of arbitrators including specialists drawn from different parts of the world.

NUMBER OF ARBITRATORS
The Act gives that parties are free to decide the number of arbitrators which notwithstanding,
ought not be an even number. Flopping any determination by the parties, the arbitral tribunal will
comprise of a sole judge. The statutory necessity of odd numbers of arbitrators is a derogable
provision. The words in the provision "the parties are free to decide the number of arbitrators"
show that on the off chance that they want to practice their choice in favor of even number of
arbitrators and consent to not to challenge the ensuing award, the award rendered would be a
legitimate and binding. The provision just gives a ground to both of the party in the event of
appointment of even number of parties to object to such composition of the arbitral tribunal. A
party has a right to object to the composition of the arbitral tribunal, if such composition isn't as
per the Act. There is, notwithstanding, no provision for the eventuality in case where the parties
consent to even number. On the off chance that neither of the parties challenge the composition
then any challenge to the composition must be raised by a party before the time frame
recommended under the Act, coming up short which it won't be available to that party to
challenge the award after it has been passed by the arbitral tribunal. The Act empowers the
arbitral tribunal to govern without anyone else jurisdiction. A challenge to the jurisdiction of the
arbitral tribunal must be raised, not later than the submission of the statement of safeguard even
however the party may have taken an interest in the appointment of the judge or potentially may
have himself appointed the authority. The Act perceives the right of the two parties to pick the
number of arbitrators. In the event that the party wishing to practice the right neglects to exercise
such right inside the time outline gave then he will be deemed to have postponed his right to so
object.

QUALIFICATION OF ARBITRATORS
The agreement executed by the parties must be given extraordinary significance. A concurred
procedure for appointing the arbitrators must be offered inclination to some other mode for
anchoring appointment of a mediator. In the event that the procedure for appointment as

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concurred between the parties falls flat and an application is recorded in court for appointment,
the court can't disregard provisions contained in Clause (an) of Sub-section (8) of section 11 of
the Act wherein it is particularly given that the Chief Justice or the individual or institution
assigned by him, in appointing a judge, will have due respect to any qualifications expected of
the mediator by the agreement of the parties.

A clause in the agreement accommodating settling the dispute by arbitration through arbitrators
having certain qualifications or in certain concurred way is ordinarily adhered to by the courts
and not withdrew with except if there are solid justification for doing as such. The appointment
of a mediator can be challenged by a party on the ground that he doesn't have the qualification
consented to by the parties. Such challenge must be brought inside 15 days in the wake of getting
to be aware of the constitution of the arbitral tribunal or in the wake of getting to be aware of the
condition that he doesn't have the important qualification.

NATIONALITY OF THE ARBITRATOR

Parties are free to agree to the nationality of the arbitrator. The word “may” in the Act confers
discretion on the Chief Justice or his nominee. It is not mandatory that the arbitrator should be of
a nationality other than the nationalities of the parties to the agreement.

NAMED PERSON OR AUTHORITY AS ARBITRATOR

The parties to an arbitration agreement may consent to allude their disputes to a specific person
and may either name him or give his designation in the agreement. For instance, parties may
express that the "Chief Engineer" of the division will act as the arbitrator. On the off chance that
the person named in that or person holding the designation refuses to act as arbitrator and the
parties have not expected that the vacancy ought not be provided, in that event the court will
have jurisdiction to appoint another arbitrator. The reason for accepting such jurisdiction is that
the clause would some way or another be rendered defective.

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Where the agreement itself specifies and names the arbitrator, it is obligatory upon the court, in
case it is fulfilled that the dispute should be alluded to the arbitrator, to allude the dispute to the
arbitrator determined in the agreement. It isn't available to the court to overlook the arbitration
clause and to appoint someone else as an arbitrator. Just in cases where the arbitrator determined
and named in the agreement refuses or neglects to act or where the agreement does not indicate
the arbitrator and the parties can't likewise concur upon an arbitrator, does the court get the
jurisdiction to appoint an arbitrator. The court will undoubtedly allude the dispute just to the
arbitrator named and indicated in the agreement.

In the event that the arbitration agreement specifies a "named arbitrator", he ought to be
identifiable by name, designation or office. Reference of such a person by class, description or in
the nonexclusive sense would not add up to naming the arbitrator in the arbitration agreement.
The court would dependably attempt to offer impact to the terms of the arbitration agreement
even however the contracting party had neglected to act as indicated by the contract.
Disappointment with respect to the party to appoint an arbitrator in terms of the agreement would
add up to surrender of the right of that party to make such appointment and the court would then
be competent to appoint its preferred arbitrator.

EXISTENCE OF ARBITRATION CLAUSE

Before looking for appointment of an arbitrator it is important to determine about whether the
contract overseeing the parties contains an arbitration clause. On the off chance that the contract
does not contain an arbitration clause, except if generally concurred by the other party, the
disputes can't be alluded to arbitration. The wronged party would need to record a common suit
before the proper discussion to have its claim adjudicated. In a few contracts, generally standard
shape contracts, the arbitration clause isn't contained in the contract overseeing the parties
however is contained in a different document the terms of which are incorporated by reference
into the contract signed by the parties.

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The Act has presented the power on the arbitral tribunal to choose whether there is in 'existence'
an arbitration clause. The statute uses "may" when giving such power which is a reasonable sign
that even courts could go into such issues when hearing an application for appointment of
arbitrator. A choice given by the arbitration clause to the parties with the utilization of the
expression "parties may allude the disputes to arbitration" would be where no arbitration clause
exists between the parties and thus no appointment of an arbitrator can be made. The utilization
of the word 'may' would infer that parties require not really go to an arbitrator but rather can
likewise go before the common court by method for a suit. Keeping in mind the end goal to
make such an arbitration clause viable, a fresh consent for arbitration would be vital. The
arbitration clause in this manner, must be firm or required.

EXISTENCE OF ‘DISPUTE’ A PRECONDITION OF THE RIGHT TO

SEEK APPOINTMENT

Existence of a dispute or difference is a pre-state of the right to arbitrate and look for an
appointment. It isn't important for a claim to be figured to offer ascent to a dispute. Minor
existence of a disagreement on a focal issue is adequate. In any case, just raising a claim does not
fulfill the pre-state of the dispute. For a dispute to appear there ought to be an attestation for the
benefit of one party and a positive denial by the other. There would be no dispute or difference in
the event that one party's claim has been expressly or impliedly admitted or if the other party has
obviously no resistance. A 'dispute' and 'difference' is more often than not utilized reciprocally
and are the same despite the fact that 'difference' has been held to have a more extensive
importance.

"Dispute" implies a genuine and genuine dispute and a claim which is undeniable on the grounds
that there is no questionable protection, does not make a dispute by any stretch of the
imagination. The jurisdiction of an arbitrator depends not upon the existence of a claim or the
gathering of a reason for action yet upon the existence of a dispute. The inquiry whether the
dispute in the suit falls inside the arbitration clause includes thought of two issues. Initially, what
is the dispute in the suit and also, what disputes the arbitration clause covers. In this way, where

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the arbitration clause alluded to a dispute with respect to the goods of the contract and not to a
dispute in regards to the contract itself, and the suit was for harms for break of the contract
occasioned by non-delivery of goods. It was held that the suit was not in regard of an issue
consented to be alluded to arbitration under the terms of the contract and couldn't be stayed.

ANTI-SUIT PROCEEDINGS

A party looking to stay the suit and have the disputes alluded to arbitration would need to set up
that the arbitrator is competent or engaged to choose the dispute. An application would lie just
where there is already a legal continuing pending even however parties had consented to allude
the disputes to arbitration. The pendency of the procedure itself is evidence of dispute. All that
the court needs to guarantee is whether the subject matter of the dispute is secured by the
arbitration agreement.

The issue won't be alluded to the arbitral tribunal, by the Court if (a) no application for alluding
the dispute to the arbitrator hosts been recorded by the gatherings to the arbitration agreement;
(b) such application isn't documented before submitting first statement on the substance of the
dispute in a pending suit; or (c) such application is documented without the first arbitration
agreement or appropriately affirmed duplicate thereof. Application to the court won't lie if the
subject matter of the suit is identifying with issues lying outside the arbitration agreement, or
between parties not involved in an arbitration agreement.

APPOINTMENT OF ARBITRATOR THROUGH COURT ASSISTANCE

The existence of an arbitration agreement as defined under Section 7 of the Act is a condition
precedent for exercise of power to appoint an arbitrator/Arbitral Tribunal, under Section 11 of
the Act by the Chief Justice or his designate. It isn't passable to appoint an arbitrator to
adjudicate the disputes between the parties, without an arbitration agreement or mutual consent.

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Section 11 of the Act sets out the procedure for appointment of arbitrator or arbitrators with court
intercession. The sole object of looking for court help under the Act is to anchor constitution of
the arbitral tribunal quickly. Parties to an arbitration agreement can concur upon a procedure for
appointment of a sole arbitrator or arbitrators as thought about under sub-section (2) of section
11. A party can approach the Chief Justice or his designate if the parties have not conceded to a
procedure for appointing the arbitrator as mulled over by sub-section (2) of section 11 of the Act
or the conditions accommodated in sub-section (6) have emerged. Section 11(2) gives that the
parties are free to consent to any procedure for appointing the arbitrator. In case of
disappointment of the procedure in anchoring the appointment concurred between the parties, the
bothered party can summon sub-sections (4), (5) or (6) of Section 11, all things considered.

Sub-section (4) of section 11 of the Act manages the existence of an appointment procedure and
the disappointment of a party to appoint the arbitrator inside 30 days from the receipt of a
demand to do as such from the other party or when the two appointed arbitrators neglect to
concur on the presiding arbitrator inside 30 days of their appointment. Sub-section (5) manages
the parties neglecting to concur in assigning a sole arbitrator inside 30 days of the demand for
that benefit made by one of the parties to the arbitration agreement and sub-section (6) manages
the Chief Justice appointing an arbitrator or an Arbitral Tribunal when the party or the two
arbitrators or a person incorporating an institution endowed with the capacity, neglects to play
out the same.

Section 11(6) of the Act applies just when a party has neglected to act in terms of the arbitration
agreement. Section 11(6) thinks about that a demand be made to the Chief Justice of India or his
chosen one to take the vital measure if:

(an) a party neglects to act as required under the appointment procedure concurred between the
parties; or

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(b) the parties, or the two appointed arbitrators, neglect to achieve an agreement expected of
them under that procedure; or

(c) a person, including an institution, neglects to play out any capacity depended to him or it
under that procedure.

For recording an application for appointment of an arbitrator under section 11(6) of the Act, no
time constrain has been prescribed, while a time of 30 days has been prescribed under section
11(4) and section 11(5) of the Act.

Sub-sections (3) and (5) will become possibly the most important factor just when there is no
agreement between the parties as is alluded to in sub-section (2) of section 11 of the Act viz. that
the parties have not conceded to a procedure for appointing the arbitrator or arbitrators. On the
off chance that the parties have conceded to a procedure for appointing arbitrator or arbitrators,
sub-sections (3) and (5) of section 11 of the Act will have no application. So also, under sub-
section (6) of section 11 demand to the Chief Justice or to an institution designated by him to
take the important measures, can be made if the conditions listed in clause (an) or (b) or (c) of
this sub-section are fulfilled.

Along these lines, a consolidated reading of the different sub-sections of section 11 of the Act
would demonstrate that the demand to the Chief Justice for appointment of an arbitrator can be
made under sub-sections (4) and (5) of section 11 where parties have not concurred on a
procedure for appointing the arbitrator as thought about by sub-section (2) of Section 11. An ask
for to the Chief Justice for appointment of an arbitrator can likewise be made under sub-section
(6) where parties have concurred on a procedure for appointment of an arbitrator as mulled over

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in sub-section (2) yet certain considerable measures which are required to be taken as counted in
clause (an) or (b) or (c) of sub-section (6) are not taken or performed.

Sub-section (7) of section 11, settles on the choice of the Chief Justice on the issues chosen by
him last while constituting the arbitral tribunal. The absolution under section 11 (7) of the Act, in
any case, is joined just to a choice of the Chief Justice on an issue depended by sub-section (4) or
sub-section (5) or sub-section (6) of that section.

Sub-section (8) of section 11, requires the Chief Justice or the person or institution designated by
him to give due respect to the qualifications required for an arbitrator by the agreement of the
parties, and different contemplations as are probably going to anchor the appointment of an
autonomous and fair-minded arbitrator when making an appointment. Even while practicing the
jurisdiction under section 11(6), the court is required to have due respect to the provisions
contained in section 11(8) of the Act. The previously mentioned section gives that separated
from guaranteeing that the arbitrator has the essential qualifications expected of the arbitrator by
the agreement of the parties, the court will have due see to different contemplations as are
probably going to guarantee the appointment of an autonomous and unprejudiced arbitrator. In
Indian Oil Corpn. Ltd. case, it was accentuated that typically the court will make the appointment
in terms of the concurred procedure, in any case, the Chief Justice or his designate may digress
from the same in the wake of account explanations behind the same.

Sub-section (9) of section 11, manages the power of the Chief Justice of India or a person or
institution designated by him to appoint the sole or the third arbitrator in a global business
arbitration.

Sub-section (10) of section 11, manages the Chief Justice's power to make a plan for managing
matters depended to him by sub-section (4) or sub-section (5) or sub-section (6) of Section 11.

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Sub-section (11) of section 11, manages the respective jurisdiction of the Chief Justices of
various High Courts who are drawn nearer with demands in regards to indistinguishable dispute
and specifies from to who should engage such a demand.

Sub-section (12) of section 11, clause (a) clears up that in connection to global arbitration, the
reference in the significant sub-sections to the "Chief Justice" would mean the "Chief Justice of
India". Clause (b) shows that generally the expression "Chief Justice" will be interpreted as a
source of perspective to the Chief Justice of the High Court inside whose nearby confines the
Principal Court is arranged.

APPOINTMENT OF THE THIRD / PRESIDING ARBITRATOR

The Act provides that in 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. It is not necessary that the appointment of the third arbitrator be done by the two
appointed arbitrators by sitting together and in writing. The requirement of the law is that there
should be an appointment and the appointment should be by the two appointed arbitrators. The
statute does not contemplate that such appointment should be made in writing. In Keshavsinh
Dwarkadas Kapadia v. Indian Engineering Company, it was observed that:

"The appointment of an umpire by two arbitrators means that the arbitrators are to concur in
appointing an umpire. There is no particular method of appointment of an umpire prescribed by
the Act. The usual method of appointment of an umpire by the arbitrators is in writing.
Arbitrators who are required to appoint an umpire are under no obligation to obtain the approval
of the choice of the personnel by the parties who appointed the arbitrators. The provisions of the
Act also do not provide that the appointment of third arbitrator cannot be agreed upon orally or
through mutual discussion. It is also not necessary that the two arbitrators appointed by each of
the parties must sit at one place, deliberate jointly and take a decision in the presence of each

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other in regard to the appointment of the third arbitrator. All that needs to be done is that they
have actually consulted or conferred with each other and both or one of them has informed the
parties that the presiding or the third arbitrator has been appointed by them after joint
deliberation. In other words all that the two arbitrators need to do to satisfy the provision of
statute, while making the appointment is to:

(i) Actually make the appointment,

(ii) appointment should be made after consultation with each other, and
(iii) Such appointment is communicated to the parties.

The Act nowhere provides that the parties need to be consulted, involved or informed prior to the
appointment of the presiding arbitrator.

APPOINTMENT OF PRESIDING ARBITRATOR BY THE ARBITRAL INSTITUTION

An arbitration clause may require every one of the parties to the dispute to nominate its arbitrator
and the third arbitrator is to be picked by the two arbitrators appointed by the parties who will act
as the presiding arbitrator.

In the event that under the appointment procedure mulled over by the contract, any person or
organization or body is required to appoint the presiding arbitrator then the court won't practice
its jurisdiction under the Act to fill the vacancy. The reason for action for moving an application
under the Act would exist just if the person or organization or body fizzles or refuses to appoint
the presiding arbitrator.

REFUSAL BY OR FAILURE OF ONE PARTY TO APPOINT

In the event that the party having the obligation under the arbitration agreement refuses or
neglects to appoint an arbitrator or arbitrators as the case may be according to the concurred
procedure for appointment, inside 30 days of the request being made by the other party, the party
having the right to make such appointment can be said to have relinquished his right and it will
be available to the next party to approach the court and look for the appointment of the arbitrator

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as per the concurred procedure. Be that as it may, the right to appoint the arbitrator or arbitrators
of the defaulting party would subsist till the time the other party has not recorded an application
before the court looking for appointment of the arbitrator or arbitrators. Once the other party
moves the Court the right to make the appointment ceases to exist and the procedure imagined
under the arbitration clause for appointment of arbitrator ceases to be in existence.

Assuming, in any case, in the wake of making an appointment of arbitrator, there is a vacancy in
the office of the arbitrator by temperance of death, retirement or resignation the appointing
specialist would not lose his right to supply the vacancy.

CHALLENGE TO THE ORDER OF APPOINTMENT

The power practiced by the Chief Justice or the Judge designated at the time of appointment of
arbitrator on ask for documented by a party is in the idea of a legal request. The Chief Justice or
the designated Judge would not pass the request of appointment going into the argumentative
issues between the party. The capacity of the Chief Justice or his designate under Section 11 is
basically to fill the hole left by parties in the arbitration agreement or in the selection of an
arbitrator by two arbitrators appointed by the parties. Section 11 does not think about a choice by
the Chief Justice or his designate on any controversy that the other party may raise even where
the other party has neglected to appoint an arbitrator inside thirty days of the demand being
made.

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BIBLIOGRAPHY

1. Appointment of Arbitrators in India, Arbitration and Conciliation Act, 2015, Singhania

And Partners (2018), https://singhania.in/selection-and-appointment-of-arbitrators-in-
india/ (last visited Sep 1, 2018).

2. Pallav Shukla et al., Appointment of Arbitrators for Electricity Disputes in India - Kluwer
Arbitration Blog Kluwer Arbitration Blog (2018),
http://arbitrationblog.kluwerarbitration.com/2016/05/10/appointment-arbitrators-
electricity-disputes-india/ (last visited Sep 1, 2018).

3. Selection And Appointment Of Arbitrators In India. | Conventus Law, Conventuslaw.com

(2018), http://www.conventuslaw.com/report/selection-and-appointment-of-arbitrators-
in-india/ (last visited Sep 2, 2018).

4. Arbitration � Appointment Of Arbitrator - Litigation, Mediation & Arbitration - India,

Mondaq.com (2018),
http://www.mondaq.com/india/x/235214/Arbitration+Dispute+Resolution/Arbitration+A
ppointment+Of+Arbitrator (last visited Sep 1, 2018).

5. Appointment of Arbitrator By The Supreme Court of India, Netlawman.co.in (2018),

https://www.netlawman.co.in/ia/appointment-of-arbitrator (last visited Sep 1, 2018).

6. Hg.org (2018), https://www.hg.org/legal-articles/law-of-and-procedure-for-appointment-

of-arbitrators-in-india-27514 (last visited Sep 1, 2018).

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