- (1.) In this petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, the petitioner relies upon clause 26 of the General Terms and Conditions of the Agreement between the parties and submits that clause 26 being the Arbitration Agreement between the parties. I should exercise my jurisdiction under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (Act, in short) and appoint a suitable person as Arbitrator to adjudicate upon the disputes between the parties. To appreciate the contours of the controversy between the parties and the scope of the relief claimed in this application, it shall be advantageous to have a look at the Arbitration Agreement as existing between the parties. Clause 2 being this Arbitration Agreement reads thus : "in case of any dispute or difference between the parties as to the construction, effect or application of these presents of any term or provision thereof or as to the amount or extent of any liability hereunder or as to any matter or thing in any way arising in connection with this contract, the same shall be referred to, the Arbitrator or Arbitrators to be appointed by the mutual consent of both parties after consultation with one another, and the provisions of the Indian Arbitration Act for the time being in force shall apply to the arbitration proceeding and the award shall be binding on both parties. For orders placed with foreign supplies/manufacturers, arbitration by International Chamber of Commerce, Geneva shall be specified."
(2.) As will be thus seen, in a particular appointment procedure has been prescribed in the aforesaid Arbitration Agreement whereby it is laid down that disputes between the parties shall be referred to an Arbitrator, or Arbitrators, who Would be appointed by the mutual consent of both the parties after the parties have consulted with each other. The Agreement, therefore, undoubtedly stipulated a procedure for appointment of the Arbitrator and this procedure provides for consultation between the parties for the purposes of such appointment and, the appointment being effected on the basis of mutual consent of and between the parties.
(3.) In the face of the aforesaid stipulations in the Agreement, what I find is that admittedly the petitioner did not set in motion the aforesaid procedure in as much as the petitioner did not call upon the respondents to start the consultation process, much less to strive for a mutual consent between the two of them for appointment of a particular person as an Arbitrator. Without at all adverting to the procedure for appointment as prescribed in the Arbitration Agreement, the petitioner straight away rushed to this Court by invoking sub-section (6) of Section 11 of the Act. Sub-section (6) of Section 11 of the Act reads as under : "Where, under an appointment procedure agreed upon by the parties (a) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators fail to reach an agreement expected of them under that procedure; or (c) a person, including an institution, falls to perform any function entrusted to him or it under that procedure, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means of securing the appointment." A bare look at sub-section (6) clearly suggests that a party to an Agreement may request, the Chief Justice to take necessary measure for appointment of an Arbitrator only, if, in terms of the appointment procedure agreed upon between the parties in the Arbitration Agreement, either a party fails to act as required in that procedure or the parties fail to reach an agreement expected of them under that procedure or, a person or an Institution fails to perform any function entrusted to him or it under that procedure. In absence, therefore, what it clearly means is that only after a party has exhausted the avenues available to it under the Agreement with respect to the appointment of the Arbitrator, by taking recourse to the procedure provided in the Agreement itself for this purpose, and the party faces any difficulty or has any grievance emanating from such an action, it can approach the Chief Justice with a request to take necessary measures under the Agreement which in effect and substance means to pass orders for appointment of an Arbitrator. That being the essence of sub-section (6), therefore, correspondingly, unless a party exhaust that remedy (and fails), it cannot file an application under sub-section (6) of Section 11 of the Act. To that extent I have no hesitation in holding that this application being premature is not maintainable. The application, accordingly, is dismissed.;