Summary
The Supreme Court set aside the High Court’s appointment of an arbitrator in a dispute between an electricity licensee and a generating company. Section 86(1)(f) of the Electricity Act, 2003 entrusted adjudication or reference to arbitration to the State Commission and displaced Section 11 of the Arbitration Act. The arbitration was invoked after the 2003 Act commenced, although the power-purchase agreement and termination were earlier. Prior consent to appointment and failure to object did not cure the inherent lack of jurisdiction. Other lawful remedies and the merits remained open.
Issues
- Whether the High Court could appoint an arbitrator under Section 11 despite the special jurisdiction under the Electricity Act.
- Whether the pre-2003 agreement and termination, or consent in earlier proceedings, altered that jurisdictional conclusion.
Provisions considered
- Sections 86(1)(f) and 174, Electricity Act, 2003The special adjudication or arbitration-reference jurisdiction of the State Commission prevailed over the general Section 11 appointment mechanism. (¶ 10-12)
- Sections 11(6) and 21, Arbitration and Conciliation Act, 1996The relevant arbitration was invoked in 2011, after the Electricity Act commenced; Section 11 could not provide an alternative appointment jurisdiction for this dispute. (¶ 9-15)
Held
- For disputes between licensees and generating companies, Section 86(1)(f) is special and overrides the general Section 11 mechanism. The word “and” is read as “or”: the State Commission may adjudicate itself or refer the dispute to arbitration. These are not independent remedies enabling High Court appointment. (¶ 10-12)
- The 2011 invocation of arbitration was material. The fact that the 1999 agreement and 2001 termination preceded the Electricity Act’s commencement did not take this arbitration outside the special regime. Section 21 generally fixes commencement when the arbitration request is received, unless otherwise agreed. (¶¶ 3-4, 9)
- Inherent lack of subject-matter jurisdiction can be raised at any stage and cannot be cured by consent. Earlier consensual nomination of arbitrators and failure to take the jurisdictional objection did not validate the later Section 11 appointment. (¶ 13-15)
- Setting aside the appointment did not bar recourse to available lawful remedies. The Court expressed no opinion on the merits or the appellant’s other objections, which remained for the appropriate forum. (¶ 15-16)
Result
Appeal allowed. High Court’s arbitrator-appointment order set aside; lawful alternative remedies and merits left open. No costs.