Appointment of Arbitrator by CJ - judicial or administrative order?

Section 11 of the Arbitration and Conciliation Act, 1996 governs the law relating to Appointment of Arbitrators. It provides that, if the parties fail to appoint an arbitrator or when the two appointed arbitrators fail to decide upon the third arbitrator, then the appointment shall be made by the Chief Justice or any person or institutition designated by him.

This provision, empowering the Chief Justice to appoint an arbitrator gave rise to the question whether the order passed by the Chief Justice in appointing an arbitrator is an administrative or a judicial order. Until the Judgment of the Hon'ble Supreme Court in S.B.P. and Co. v. Patel Engineering Ltd. and Anr, the position that prevailed was that the order is an 'administrative order.' However, the SC in Patel Engineering overruled Konkan Railway Corporation Ltd. and Anr. v. Rani Construction Pvt. Ltd. to hold that, the power exercised by Chief Justice of High Court or India under Section 11of the Arbitration and Conciliation Act, 1996, is not an administrative power but a 'juidicial power.'

The consequence of the Judgment in Patel Engineering is that :

1)The CJ while deciding on the question of appointment of arbitrator, has to satisfy himself , First of the existence of an arbitration clause and secondly, that the arbitration agreement is valid.

2) Once the CJ constitutes an arbitration tribunal, the triunal can no longer decide the question in respect of the existence or validity of the arbitration agreement under Section 16 of the 1996 Act

3) The power under Section 11 can be delegated by the CJ of a High Court only to a Judge of that Court and by the Chief Justice of India to another judge of the Supreme Court.

4) Since an order passed by the Chief Justice of the High Court or by the designated judge of that court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution of India to the Supreme Court. But there can be no appeal against an order of the Chief Justice of India or a judge of the Supreme Court designated by him
Though, the law on this question has been settled by the Supreme Court through this judgment, the controversy remains (at least from an academic perspective).

In my subsequent posts, I will examine the arguments that may be advanced both in favour and against the position that the order of the CJ appointing an arbitrator under section 11 is a judicial order. Read subsequent post here.

See also NLSIR Symposium: A case for Judicial Intervention on the blog Law and Legal Developments.

Comments

  1. AnonymousFebruary 27, 2010 at 2:33 AM

    When will you post a discussion on this issue?

    ReplyDelete
  2. Preeti SukthankerFebruary 27, 2010 at 3:31 AM

    I'll post it shortly. sorry for the delay.

    ReplyDelete

Post a Comment

Popular posts from this blog

Competition Law - Presumption in Section 3(3) contd..

I have in my earlier posts,( here , here and here ) proposed argumets which may be made in favour of the the presumption being irrebuttable. I will now present the arguments  from the other side. Argument 1- Presumption Rebuttable . One of the principles of Interpretation of Statutes is that another statute may be referred to while interpreting a statute when the two are similar i.e. when they are statutes in pari materia  ( Harshad S. Mehta v. State of Maharashtra , (2001) 8 SCC 257) It has been held by the Supreme Court in State of Madras v. A Vaidyanath Aiyer , AIR 1958 SC 61, that it is not necessary that the entire subject-matter in the two statutes should be identical before any provision in one may be held to be in pari materia with some provision in the other. In this case, Section 4 of the Prevention of Corruption Act, 1947 which directs that on proof that the accused has accepted any gratification other than the legal remuneration, it shall be presumed unless the con
Read more

NOMINEE v/s LEGAL HEIRS

The Hon'ble Bombay High Court in its very recent decision, Harsha Nitin Kokate Vs. The Saraswat Co-op. Bank Limited & Others , held that position of a nominee under section 109A of the Companies Act is not merely that of a trustee for the estate of the deceased, and it further held that, "  on the death of the share holder, the nominee would become entitled to all rights in the shares to the exclusion of all other persons ." This means that, the nominee will be made the beneficial  owner thereof and all the rights incidental to ownership of shares would follow i.e. the right to transfer, pledge or hold the shares. The court based its decision on the express provisions of the section which provide as follows: ­S. 109A. Nomination of shares – (1) Every holder of shares in, or holder of debentures of a company may, at any time, nominate, in the prescribed manner, a person to whom his shares in or debentures of, the company shall vest in the event of his death. (2)
Read more

Retrospective Operation of PWDV Act

Amongst the many conflicting decisions arising out the application of Protection of Women Against Domestic Violence Act, one of them, is in respect of the operation of the Act. The Andhra Pradesh High Court held that the PWDV Act does not apply retrospectively and that an action under the Act can lie only if the acts of domestic violence are committed on or after 26 Oct 2006, i.e. the date on which the Act came into force. Similarly, a Delhi Metropolitan Court  and a JMFC in Goa also took the view that this Act will not be applicable if the acts complained of have been committed prior to the passing of the Act. On the other hand the Bombay High Court and Madras High Court have taken a different view. They held that, the court is competent to take cognizance of the act of domestic violence committed even prior to the Act came into force and pass necessary protection orders. The Act can be applied retrospectively to take cognizance of the act of violence alleged to have been committed
Read more