ELP – Arbitration weekly update -Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV) A Joint Venture Company

This week, we analyze the decision of Supreme Court in the case of Central Organisation for Railway Electrification V. ECI-SPIC-SMO-MCML (JV) A Joint Venture Company.In an application under section 11 of the Arbitration and Conciliation Act, 1996 (Act), the Allahabad High Court (High Court) appointed a sole arbitrator to resolve the disputes between the parties dehors the procedure for appointment provided in the arbitration agreement between the parties (Orders). Aggrieved by the Orders, the appellant filed a special leave petition.The Supreme Court inter alia determined whether a court can appoint an independent arbitrator dehors the procedure for appointment in the arbitration agreement or if the court ought to appoint the arbitrator as per the procedure set out in the arbitration agreement.

Based on the precedents and facts, the Supreme Court inter alia held that the arbitration clause was not hit by section 12 (5) of the Act read with Schedule VII of the Act and that the High Court was not justified in appointing an independent arbitrator without resorting to the procedure for appointment of arbitrators as prescribed in the arbitration clause.The Supreme Court set aside the Orders and directed the parties to take necessary steps to constitute the tribunal in terms of the procedure for appointment in the arbitration agreement.

Trust you will find this an interesting read.