Sole Arbitrator May Be Appointed To Reduce Costs Despite Three-Member Clause: Allahabad High Court

Justice Subhash Vidyarthi held

“although the arbitration agreement contained provision for constituting a panel of three arbitrators – one arbitrator to be appointed by each of the parties and the third arbitrator or the umpire being appointed by the two arbitrators, the parties fail to appoint their arbitrators, an application under Section 11(6) of the Act is filed and a party requests that it is not willing to bear the high cost of arbitration to be conducted by a panel of three arbitrators and in order to reduce the costs, it requests appointment of a sole arbitrator, this Court can accede to the request.”

The dispute arose out of a contract dated November 6, 2015 between Progressive Construction Company and State PWD authorities. The agreement between the parties contained an arbitration clause pursuant to which the applicant had requested the respondent to appoint it's arbitrator. Since no arbitrator was appointed, the applicant filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of a Sole Arbitrator.

The applicant pleaded that the cost of the arbitration be reduced and a Sole arbitrator be appointed instead of a 3-member Tribunal which was provided in the arbitration agreement.

The Court held that it had the power to appoint a sole arbitrator upon request by the parties to reduce the cost of arbitration. Accordingly, retired Justice V. K. Mathur was appointed as the Sole Arbitrator in the dispute between the parties.

For Applicant(s): Advocate Vipul Rai

For Opposite Party(s): Advocate S.K. Khare.