Summary
Parties had mutually appointed a sole arbitrator in a family-property dispute. While applications alleging undue delay were pending before the competent court, the High Court terminated his mandate and appointed another under section 11(6). The Court set aside that intervention and revived the section 14 applications for determination on merits. It separately upheld rejection of the attempt to dismiss those applications under Order VII Rule 11.
Issues
- Whether section 11(6) permitted termination and replacement of an arbitrator already appointed by mutual consent.
- Which forum must determine a disputed ground under section 14(1)(a).
- Whether the denial of delay justified threshold rejection of the section 14 applications.
Provisions considered
- Section 11(2), (5) and (6), Arbitration and Conciliation Act, 1996Distinguished the default appointment route from failure of an agreed appointment procedure and rejected use of section 11(6) to resolve this mandate dispute. (¶¶ 6.1-6.3, 7-11)
- Sections 2(1)(e), 14 and 15, Arbitration and Conciliation Act, 1996Required the competent court to decide the disputed ground for termination, with replacement following the applicable initial appointment procedure if termination is established. (¶¶ 6.4.1, 6.5-6.7, 9.1-11, 13)
- Sections 12 and 13, Arbitration and Conciliation Act, 1996Distinguished the challenge procedure described for section 12 grounds from adjudication of the asserted undue-delay ground under section 14. (¶¶ 6.4.1-6.4.2, 6.7)
- Order VII Rule 11, Code of Civil Procedure, 1908Held that the assertion that no undue delay occurred was a merits defence, not a basis to reject the section 14 applications at the threshold. (¶ 12)
Held
- Section 11(5) applies to the sole-arbitrator appointment situation where the parties fail to agree in the absence of an agreed appointment procedure; section 11(6) concerns failure under the written agreed procedure. Here the parties had already appointed the arbitrator by mutual consent. Section 11(6) did not provide a second invocation to replace him on the asserted termination ground. (¶¶ 6.1-6.3, 7-11)
- A disputed claim that the arbitrator cannot act de jure or de facto, or has failed to act without undue delay, must be decided under section 14(2) by the court defined in section 2(1)(e). It cannot be adjudicated in an application under section 11(6). If termination is established, substitution follows the rules applicable to the original appointment. (¶¶ 6.5-6.7, 8-11, 13)
- Whether the arbitrator actually caused undue delay required merits adjudication. At the Order VII Rule 11 stage, the application’s allegations, rather than the opposing defence, govern. The rejection application was therefore rightly dismissed, without deciding the substantive delay controversy. (¶ 12-13)
Result
Appeals against the section 11 appointment and review orders allowed; those orders set aside. Appeals against rejection of the Order VII Rule 11 applications dismissed. The withdrawn section 14 applications revived for decision preferably within four months of receipt. If termination is found, replacement must follow the original procedure, with section 11(5) recourse if necessary; otherwise the existing arbitrator must conclude and declare the award within nine months of that decision. No costs.