Bench: Chief Justice R.C. Lahoti, B.N. Agrawal, Arun Kumar, G.P. Mathur, A.K. Mathur, and P.K. Balasubramanyan
FACTS
The appellant, SBP and Co, entered into an arbitration agreement with the respondent, Patel Engineering Ltd, for the construction of a factory. Disputes arose during the course of the construction, and the appellant invoked the arbitration clause. The respondent, however, approached the High Court for an injunction to restrain the arbitration proceedings. The High Court granted the injunction, holding that the Chief Justice had exceeded his powers in appointing the arbitrator.
ISSUES
Whether the Chief Justice had exceeded his powers in appointing the arbitrator?
What are the powers of the Chief Justice under Section 11 of the Arbitration and Conciliation Act, 1996?
JUDGMENT
The Supreme Court held that the Chief Justice had not exceeded his powers in appointing the arbitrator. The Court observed that the parties had failed to appoint an arbitrator within the agreed-upon time frame, and the Chief Justice had invoked his power under Section 11 to appoint an arbitrator.
The Court clarified that the power of the Chief Justice under Section 11 was not limited to cases where both parties failed to agree on an arbitrator. The Court stated that the Chief Justice could appoint an arbitrator even if one party had agreed on an arbitrator and the other party had not.
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