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Change in place of the arbitration does not change the number of arbitrators

The court has ruled that the order passed by the arbitrators holding that the arbitral proceeding shall be conducted at any other place shall not change the seat of arbitrators as given in the arbitration clause. The single bench has decided that whatever is decided by the parties cannot be altered or changed by the arbitrators. 

The case in which such order has taken place is of the Tour and Travels company was awarded a contract by the respondent of Oil and Natural Gas company for hiring services, the respondent terminated the contract by giving notice. The petitioner issued a notice to perform an arbitration proceeding and gave notice to the respondent to appoint an arbitrator. But the respondent appointed a sole arbitrator without taking any prior consent from the petitioner under Section 11(6) of the arbitrations and conciliation act, 1996. The section state that if a person or an institution fails to perform any function mentioned in the section including the appointment of arbitrators if not fulfilled properly then the parties can request the chief justice or any person or institution designated by him to take necessary measures. The agreement has to be signed by both the parties in deciding the 

The arbitrator has to be appointed by the mutual consent of all the parties and if any of the parties fails to comply with the decided subject matter mentioned in the agreement then the action has to be taken by one of the affected parties. The agreement has to be duly stamped. If any of the parties fail to follow any of the arbitration clauses then the action is to be taken against that party. Arbitration is always a two-way process, one can not overrule the other party.

If there is no agreement on the number of arbitrators and the method of their appointment reached within 30 days after the registration of the arbitration then the filling parties shall make a request to the Chief Justice of the High Court or any person or institution designated by him.

In the case of the appointment of the arbitrator in international commercial arbitration, the appointing authority is the chief justice of India or a person or institution designated by him. 

In such an appointment, the consideration is to be made : 

  1. Required qualification of the arbitrator as provided in the agreement made by both the parties 
  2. Independent and impartial person as an arbitrator. 

Procedure for the appointment: 

Section 11 states the power of the High court to appoint an arbitrator only when the following conditions are fulfilled such as in case any of the parties are in default to choose the arbitrator in the prescribed time period: 

  1. Where there is an agreement between the disputed parties. 
  2. The appointment of the arbitrators is made with the mutual consent of all the disputed parties 
  3. If a difference has arisen between the parties to the arbitration agreement or between the appointed arbitrators
  4. If there is a difference in the appointments of arbitrators between the parties. 

The arbitrators should be chosen carefully because of their special knowledge of the subject matter which is in dispute. An arbitrator must have paid attention to the facts of the disputed parties equally. The role of the arbitrator is a must in the arbitration proceeding to resolve the matters amicably.

Vanshika Jaiswal
Vanshika Jaiswal

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