P. K. Balasubramanyan, J. - (1.) Delay condoned.
(2.) On a dispute having arisen, the Managing Director of the respondent company appointed an arbitrator in terms of the arbitration clause. The arbitrator resigned. Thereupon the Managing Director of the respondent company, in view of the mandate in the arbitration agreement promptly appointed another arbitrator. At that stage, the petitioner approached the Chief Justice of the High Court under Section 11, sub-section 5 read with Section 15(2) of the Arbitration and Conciliation Act, 1996 (for short "the Act"), praying that the Chief Justice may appoint a substitute arbitrator to resolve the disputes between the parties. The Chief Justice found that the appointment of the second arbitrator by the Managing Director, after the resignation of the first arbitrator, was valid in law since it was permissible under the contract and the right to make such an appointment was saved by Section 15(2) of the Act. The argument that Section 15(2) of the Act referred to statutory rules providing for appointment of Arbitrators and not to a contractual provision for such appointment was rejected by the learned Chief Justice. It was held by him that no occasion arose for him to appoint an arbitrator under Section 11(6) of the Act in the case. Thus, the application was dismissed leaving the parties to pursue their claims before the arbitrator appointed by the Managing Director in terms of arbitration agreement between the parties.
(3.) The petitioner challenged the decision of the learned Chief Justice by way of a Writ Petition in the High Court. The Division Bench noticed the decision of this Court in SBP and Co. vs. Patel Engineering Ltd. and another [(2005) 8 SCC 618] holding that the order passed by the Chief Justice is a judicial order and no Writ Petition would lie in the High Court challenging such an order and only an appeal could be filed in the Supreme Court invoking Article 136 of the Constitution of India. But the Division Bench thought that since that decision saved appointments made on or before the date that decision was rendered by this Court, the Writ Petition filed by the petitioner would also be saved and the Writ Petition could be decided on merits. The Division Bench held that the position obtaining under Section 8(1) of the Arbitration Act of 1940 differed from that available under the present Act especially in the context of Section 15 thereof and that in terms of Section 15(2) of the Act, the Managing Director could, on the basis of the arbitration agreement, appoint another arbitrator when the originally appointed arbitrator resigned, thus attracting Section 15(1)(a) of the Act. It further held that Section 15(2) covered not only cases of appointments under statutory rules or rules framed under the Act, but it would also take in the terms of the agreement between the parties for appointment of an arbitrator and in that view, the Managing Director, in the case on hand and on the terms of the arbitration agreement, would have the right to appoint a substitute arbitrator. Thus, it was held that the learned Chief Justice was right in rejecting the application made by the petitioner. Thus, the Writ Petition was dismissed. It is this decision of the Division Bench that is sought to be challenged in this petition for special leave to appeal.;