- (1.) Both these applications are by Glencore International AG incorporated in Switzerland. The applications are under Section 11 of the Arbitration and conciliation Act, 1996 (hereinafter referred to as "the Act"). The prayer in petition No. 6 of 2005 is for the appointment of a third arbitrator of a neutral nationality in accordance with Section 11 (9) of the Act based on the arbitration agreement concerned between the petitioner and the respondent company located in India. The prayer in Petition No. 7 of 2005 is for the appointment of a nominee arbitrator on behalf of the respondent in accordance with the provisions of the Act and in terms of the relevant arbitration clause. This petition need not detain me much since Mr Harish salve, learned Senior Counsel appearing for the petitioner therein submitted that the prayer in that petition is not pressed and adjudication is called for only in Arbitration Petition No. 6 of 2005 and orders are called for only in arbitration Petition No. 6 of 2005. Hence, Arbitration Petition No. 7 of 2005 will stand dismissed as not pressed.
(2.) There is no dispute that there is in existence an arbitration agreement between the parties. The relevant term of the contract or sale order, clause 17, insofar as it is relevant reads as under: "17.1 In the event of any dispute or difference arising out of or relating to, under or in respect of this contract between the parties the same shall be referred at the written request of either party to the Arbitral tribunal constituted for the adjudication of the dispute or difference as provided hereunder: (1) Where the claim is up to Indian Rs 50 lakhs to a sole arbitrator to be nominated by the Chairman Managing Director of hindustan Zinc Limited, Udaipur (Rajasthan). (2) Where the claim exceeds Indian Rs 50 lakhs to a Board of three arbitrators comprising one nominee each of the owner and the contractor and the third to be appointed by the two arbitrators by mutual agreement in writing before entering upon the reference. The party while making request for referring the dispute for arbitration shall appoint his arbitrator nominee and request the other party to appoint his arbitrator nominee. The arbitration shall be subject to and in accordance with the provisions of the Indian Arbitration and Conciliation Act, 1996 (26 of 1996) and the Rules if any made thereunder and any statutory modification or re-enactment thereof. The venue of arbitration proceedings shall be Udaipur, Rajasthan, india. The arbitrators shall give a speaking, reasoned and claimwise award. Any arbitration award made in such arbitration proceedings shall be final and binding on the parties and shall be enforceable in any court of competent jurisdiction. " "Dispute between the parties having arisen in respect of the sale order, the petitioner made a claim for a sum of Rs 55 lakhs against the respondent. The respondent not having settled the claim, a notice was issued on behalf of the petitioner invoking clause 17.1 (2) of the arbitration agreement and nominating a retired Judge of the HIGH COURT OF DELHI as its nominee arbitrator and calling upon the respondent to name its nominee. The respondent named a retired District Judge of the Rajasthan cadre as its nominee. In terms of the arbitration agreement and Section 11 (3) of the Act, the two nominee arbitrators, were to nominate the third arbitrator preferably of a nationality other than the nationality of the parties involved. At this stage, the respondent altered its stand and taking up the position that the claim by the petitioner involved only an amount less than Rs 50 lakhs, and it came within the purview of clause 17.1 (1) of the arbitration agreement proceeded to name the arbitrator, it had already nominated, as the sole arbitrator to adjudicate on the dispute. It appears that subsequently that nominee was replaced by Mr Justice S. S. Chadha, a retired Judge of the High court of Delhi. "
(3.) The petitioner approached the Chief Justice of India at this stage with the present application seeking the appointment of the third arbitrator on the basis that the nominated arbitrators have failed to name the third arbitrator. According to the petitioner, the respondent was not justified in going back upon its earlier stand that the matter had to go before the Arbitral Tribunal in terms of clause 17.1 (2) of the arbitration agreement. The claim made, exceeded Rs 50 lakhs and clause 17.1 (2) was attracted. On behalf of the respondent, it is submitted that the claim, as can be seen from the notice originally issued, was only for a sum of Rs 49,52,051. 04. On a point of law, it is contended that the sole arbitrator having entered on the reference, it was for the petitioner to raise its objection to his jurisdiction before him in terms of Section 16 of the Act and the present petition invoking Section 11 of the act was misconceived.;