Arbitration Act Sec. 11(6) Is Default Provision, Can't Override Agreed 3-Member Tribunal: Allahabad HC

The Allahabad High Court on 20 August held that Section 11(6) of the Arbitration and Conciliation Act, 1996 is a default provision that can be invoked only when parties are unable to secure the appointment of an arbitrator through the procedure agreed upon in their contract, and cannot be used to replace an agreed three-member tribunal with a sole arbitrator.

Justice Jaspreet Singh dismissed S. H. Infratech Pvt. Ltd's petition seeking appointment of a sole arbitrator, holding that where a party fails to nominate an arbitrator to fill a vacancy, the remedy lies under Section 11(4), while any failure by the tribunal to conclude proceedings within the prescribed time must be addressed through an application for extension under Section 29-A. The Bench held:

“Section 11(6) is a default clause and only when the parties are unable to get an Arbitrator appointed in terms of the settled and agreed rules, can the default clause come into picture. It does not give any independent right to the court in terms of Section 11 to override the terms of the contract to appoint an Arbitrator.”

S. H. Infratech was awarded a road contract by the State respondents in 2014, which provided for disputes to be referred to a three-member arbitral tribunal. Under the agreed procedure, each side was to nominate one arbitrator, with the two nominees appointing the presiding arbitrator. The tribunal was constituted and the parties exchanged pleadings.

The respondents' nominee died on 30 May 2021, and the presiding arbitrator informed both sides of the death on 2 June 2021. The record did not show what transpired over the next three and a half years, until the respondents appointed Sri Dilip Kumar Mahapatra to fill the vacancy on 25 November 2024.

The petitioner, by notice dated 13 December 2024, contended that the tribunal's mandate had already lapsed under Section 29-A for failure to conclude the proceedings within the prescribed time.

It also alleged that the vacancy had not been filled within a reasonable period and that Sri Mahapatra, being a retired employee of the respondents, was disqualified under Sections 12(1) and 12(5). It asked the respondents to agree to a sole arbitrator and suggested four names.

The respondents declined the proposal on 19 April 2025, following which the petitioner approached the High Court under Section 11(6) seeking appointment of a sole arbitrator.

The Court held that any objection to the arbitrator nominated by the respondents could be pursued through the procedure under Sections 12 and 13 of the Act, but the petitioner had not adopted that course. It further held that, in a multi-member tribunal, each party is entitled to nominate an arbitrator of its choice in accordance with the agreed procedure. It held:

“There is no consensus between the parties regarding a Sole Arbitrator, hence, filing a petition before this Court in terms of 11(6) of the Act of 1996 with a prayer to appoint a sole independent Arbitrator would be against the spirit of the consensus reflected in the agreement arrived at between the parties and would be against the core principles of Arbitration i.e. party-autonomy.”

On Section 29-A, the Bench held that the provision provides a complete mechanism for cases where an arbitral tribunal, after being constituted, is unable to conclude the proceedings within the prescribed period. The parties must first complete the constitution of the tribunal and thereafter seek an extension of time.

It noted that, while seeking such an extension, the petitioner could also have sought appointment of a nominee arbitrator on behalf of the respondents, but had not done so.

Relying on Jagdeep Chowgule v. Sheela Chowgule & Others, the Bench observed that an application for extension of the arbitral tribunal's mandate lies before the “Court” defined under Section 2(e) of the Act, namely the District Court. This applies irrespective of whether the arbitrator was appointed by the High Court under Section 11(6). It also noted that the District Court may appoint an arbitrator under Sections 29-A(6) and (7).

Accordingly, the High Court held the petition to be misconceived and dismissed it, while leaving the petitioner free to pursue such remedy as may be available in law.