Arbitration has emerged as a preferred mechanism for resolving disputes due to its efficiency, flexibility, and party autonomy. The Arbitration and Conciliation Act, 1996 (A&C Act) governs arbitration proceedings in India and incorporates principles from the UNCITRAL Model Law. Section 11 of the Act, which deals with the appointment of arbitrators, has undergone substantial changes through amendments and judicial interpretations.

This article delves into the nuances of Section 11(6), which provides a remedy for parties when the agreed procedure for appointing arbitrators fails or is not adhered to. The provision emphasizes judicial intervention while respecting party autonomy.

Understanding Section 11(6) of the A&C Act
Section 11(6) of the Arbitration and Conciliation Act states:

Where, under an appointment procedure agreed upon by the parties:

1. A party fails to act as required under that procedure; or
2. The parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or
3. A person, including an institution, fails to perform any function entrusted to them under that procedure,

a party may request the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court to take the necessary measure unless the agreement on the appointment procedure provides other means for securing the appointment. This provision addresses three primary scenarios:

• Failure to act under the agreed procedure - When one party does not fulfill its obligation.
• Inability to reach consensus - When arbitrators or parties cannot agree on the appointment.
• Institutional or designated failure - When a designated authority fails to perform its role.

Key Elements of Section 11(6)

• Party Autonomy and Judicial Intervention - Section 11(6) preserves the sanctity of party autonomy by allowing parties to establish their own appointment mechanisms. Judicial intervention is invoked only when these mechanisms fail.
   
• Jurisdiction of Courts - The 2015 amendment designated the Supreme Court for international commercial arbitration and the High Courts for domestic arbitration to handle requests under Section 11(6). This delineation aims to streamline the process and reduce judicial delays.
   
• Role of Court or Designated Institution - Post the 2019 amendment, Section 11 emphasizes the role of arbitral institutions, which may be designated by the courts, to appoint arbitrators, thereby reducing the burden on the judiciary.

Judicial Interpretation

• S.B.P. & Co. v. Patel Engineering Ltd. (2005) - The Supreme Court held that the decision of the Chief Justice or their designate under Section 11 is judicial and not administrative. This judgment underscored the importance of scrutinizing the validity of arbitration agreements at the appointment stage.
   
• TRF Ltd. v. Energo Engineering Projects Ltd. (2017) - The Court clarified that a person ineligible to act as an arbitrator cannot nominate another arbitrator. This judgment had significant implications for ensuring impartiality in arbitrator appointments.
   
• Perkins Eastman Architects DPC v. HSCC (India) Ltd. (2019) - Expanding on TRF, the Court held that unilateral appointments by parties, particularly when the appointing authority has an interest in the dispute, are invalid.
   
• Vidya Drolia v. Durga Trading Corporation (2020) - The Supreme Court reaffirmed the principle of minimal judicial intervention, holding that issues of arbitrability should be left to the arbitrator unless manifestly clear.
   

Impact of Amendments

• 2015 Amendment - The amendment limited judicial intervention in the appointment process by transferring the scrutiny of arbitration agreements from courts to arbitral tribunals, emphasizing efficiency and party autonomy.
• 2019 Amendment - It introduced arbitral institutions for handling appointments under Section 11, further reducing judicial interference. Institutions designated by courts now play a crucial role in streamlining the process.
   

Challenges and Criticisms

• Delay in Designation of Arbitral Institutions - Despite the 2019 amendment, the absence of sufficient designated arbitral institutions has led to continued reliance on courts.
• Judicial Backlog - Although Section 11 aims to minimize court intervention, delays in court proceedings often defeat the purpose of arbitration as a quick dispute-resolution mechanism.
• Lack of Uniformity - Differing interpretations by High Courts and procedural inconsistencies highlight the need for more uniform guidelines under Section 11.
   

Way Forward

• Strengthening Arbitral Institutions - Establishing and empowering arbitral institutions with clear guidelines is imperative to achieve the legislative intent of reducing judicial intervention.
• Training and Awareness - Arbitrators, lawyers, and institutions must be trained in the latest legal developments and international best practices to ensure efficient arbitration processes.
• Legislative Clarifications - Future amendments should address ambiguities in Section 11, particularly regarding timelines and institutional appointments.

Conclusion
Section 11(6) of the Arbitration and Conciliation Act, 1996, strikes a delicate balance between party autonomy and judicial oversight. While amendments and judicial interpretations have streamlined the arbitration process, challenges like delays and institutional gaps remain. A robust framework, complemented by judicial efficiency and institutional strengthening, is essential to make India a global hub for arbitration.

By reinforcing the principles of impartiality, efficiency, and minimal judicial intervention, Section 11(6) continues to play a critical role in advancing arbitration jurisprudence in India.