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

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