Arbitration and Conciliation Act, 1996 — Section 11(6) & (4) r/w Section 11(10)

September 9th, 2013

Arbitration and Conciliation Act, 1996 — Section 11(6) & (4) r/w Section 11(10) — Application under Section 11(6) — Invocation of ICC Rules by one party, Maintainability of — Respondent/Devas, without responding to the Petitioner’s letter written in terms of Arbitration Agreement, unilaterally invoked the Arbitration Agreement and had sought the constitution of an Arbitral Tribunal, after having chosen its nominee Arbitrator, in accordance with the ICC Rules of Arbitration — Petitioner filed the application under Section 11(6) — Held, once the Arbitration Agreement had been invoked by Devas and a nominee Arbitrator had also been appointed by it, the Arbitration Agreement could not have been invoked for a second time by the Petitioner, which was fully aware of the appointment made by the Respondent — It would lead to an anomalous state of affairs if the appointment of an Arbitrator once made, could be questioned in a subsequent proceeding initiated by the other party also for the appointment of an Arbitrator — While the Petitioner was certainly entitled to challenge the appointment of the Arbitrator at the instance of Devas, it could not do so by way of an independent proceeding under Section 11(6) of the 1996 Act — Petition is, therefore, dismissed.

(Para 31, 32 & 34)

HELD: In view of the language of Article 20 of the Arbitration Agreement which provided that the arbitration proceedings would be held in accordance with the rules and procedures of the International Chamber of Commerce or UNCITRAL, Devas was entitled to invoke the Rules of Arbitration of the ICC for the conduct of the arbitration proceedings. Article 19 of the Agreement provided that the rights and responsibilities of the parties thereunder would be subject to and construed in accordance with the laws of India. There is, therefore, a clear distinction between the law which was to operate as the governing law of the Agreement and the law which was to govern the arbitration proceedings. Once the provisions of the ICC Rules of Arbitration had been invoked by Devas, the proceedings initiated thereunder could not be interfered with in a proceeding under Section 11 of the 1996 Act. The invocation of the ICC Rules would, of course, be subject to challenge in appropriate proceedings but not by way of an application under Section 11(6) of the 1996 Act. Where the parties had agreed that the procedure for the arbitration would be governed by the ICC Rules, the same would necessarily include the appointment of an Arbitral Tribunal in terms of the Arbitration Agreement and the said Rules. Arbitration Petition No.20 of 2011 under Section 11(6) of the 1996 Act for the appointment of an Arbitrator must, therefore, fail and is rejected, but this will not prevent the Petitioner from taking recourse to other provisions of the aforesaid Act for appropriate relief.

(Para 34)

Antrix Corporation Ltd. v. Devas Multimedia P. Ltd.[Bench Strength 2], Arbitration Petition No. 20/2011(10/05/2013), 2013(3) R.A.J. 424: 2013(2) ArbLR 226: 2013(5) SLT 5: 2013(4) Supreme 212: 2013(7) JT 394: 2013(7) SCALE 216 [Altamas Kabir, J.: Surinder Singh Nijjar, J.]

Entry Filed under: Legal Updates

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