{"id":253237,"date":"2021-08-26T10:00:43","date_gmt":"2021-08-26T04:30:43","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=253237"},"modified":"2021-08-26T08:42:06","modified_gmt":"2021-08-26T03:12:06","slug":"arbitration-act","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/08\/26\/arbitration-act\/","title":{"rendered":"Ker HC | Syllogistic scope of Ss. 11(5) and 11(6) of the Arbitration Act, 1996; HC unclouds the line"},"content":{"rendered":"

Kerala High Court: <\/strong>Devan Ramachandran, J., held that parties to arbitration cannot nominate the arbitrator even if the Arbitration Agreement provides so.<\/p>\n

Syllogistic Scope of Sections 11(5) and 11(6) of Arbitration Act <\/strong><\/span><\/h3>\n

The instant Arbitration Request dealt with certain novel, but interpretationally germane legal aspects appertaining Sections 11(2), 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996. The focus was on the interplay of Sections 11(5) and 11(6) of the Act, since both of them deal with appointment of a sole Arbitrator, albeit, in two subtly distinct scenarios. It was this distinction which was ingenuously grabbed by the respondent to resist the petitioner\u2019s Arbitration Request.<\/p>\n

The petitioner, a private limited Company had approached the Court under Section 11(6) of the Act, praying that the Court appoint a sole Arbitrator, in terms of Clause 27 of the Agreement \u2013 which the petitioner asserted was a lease agreement entered between the parties. Clause 27 provided ways to adjudicate and decide certain disputes, which warranted resolution only through the mechanism of arbitration.<\/p>\n

Issue Raised<\/strong><\/span><\/h3>\n

The respondent argued that the Arbitration Request was not maintainable because the grounds raised by the petitioner ineluctably disclose that they had, in fact, approached the Court under Section 11(5) of the Act, though styling it as being under Section 11(6) thereof; hence, unless thirty days pass after they had made demand to the client for appointment of Arbitrator, the Arbitration Request would be premature and hence, not maintainable. Additionally, the respondent contended that the issue was not arbitrable as it fell within the jurisdictional realm of the Rent Control Act.<\/p>\n

Stand taken by the Petitioner<\/strong><\/span><\/h3>\n

The petitioners contested that they had invoked Section 11(6) of the Act and hence were not obligated to wait for thirty days after demand had been made on the respondent. It was contended that Section 11(5) of the Act is called in only when the agreement does not contain a procedure for appointing an Arbitrator, or when the parties have not agreed on such. However, Clause 27 of agreement expressly disclosed the procedure agreed upon by the parties to appoint an Arbitrator; and, therefore, they had rightly invoked Section 11(6) which concedes no pre-conditional Stipulations.<\/p>\n

Clause 27 of agreement provided for Arbitration between the parties in case of disputes, since it reads as under:<\/p>\n

\u201c27 If any dispute or difference arises between the lessor and lessee during the period of lease or upon the expiry of the said lease both parties shall seek to resolve by mutual discussions. If such discussions are unsuccessful the same shall be referred to arbitration in accordance with the provisions of the Arbitration and conciliation Act, 1996 for the time being in force. Arbitration shall be by a sole arbitrator if parties can agree upon one and failing that the disputes shall be referred to an arbitrator to be selected by the lessor.\u201d<\/strong><\/em><\/p>\n

Statutory Mandate<\/em><\/strong><\/p>\n

Section 11(2) Subject to sub-section(6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators. <\/em><\/p>\n

\u00a0<\/em>Section 11(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree [the appointment shall be made on an application of the party in accordance with the provisions contained in sub-section (4)]. <\/em><\/p>\n

\u00a0<\/em>Section 11(6) Where, under an appointment procedure agreed upon by the parties,- <\/em><\/p>\n