Summary
The Supreme Court set aside appointment of an arbitrator because the contractual dispute-resolution clause provided a departmental appeal, not arbitration. Only a dissatisfied contractor could invoke the Commissioner’s decision-making power; the mechanism did not contemplate impartial adjudication of both sides’ cases. The clause served supervisory and administrative control rather than a reference to arbitration. The High Court therefore could not appoint under Section 11(6).
Issues
- Whether the appeal to the Municipal Commissioner under Clause 16.3 constituted an arbitration agreement.
- Whether appointment under Section 11(6) could stand without the required agreement.
Provisions considered
- Section 11(6), Arbitration and Conciliation Act, 1996Appointment was unavailable because Clause 16 contained no express or necessarily implied agreement to refer the dispute to arbitration. (¶¶ 16, 23, 24)
Held
- Clause 16 created two stages: a request to the Competent Officer and a departmental appeal by a dissatisfied contractor to the Commissioner. Its wording and one-sided invocation structure identified an appeal rather than arbitration. (¶¶ 12, 14, 15, 17, 18, 19)
- The Commissioner acted as a higher officer within the same organisation, not an impartial tribunal owing an equal adjudicative duty to both parties. Opportunity for the contractor to be heard and offer evidence did not convert that process into arbitration. (¶¶ 21, 22, 23)
- The clause’s function was supervisory and administrative control of execution. It did not expressly or by necessary implication provide a reference of disputes to an arbitrator, so the High Court’s appointment was set aside. (¶¶ 23, 24, 25)
Result
Appeal allowed. High Court’s order dated 17 June 2016 appointing an arbitrator set aside.