Arbitration, as an alternative dispute resolution mechanism, hinges on the impartial and competent appointment of arbitrators. Section 11 of the Arbitration and Conciliation Act, 1996 (the "Act") in India, mirroring Article 11 of the UNCITRAL Model Law on International Commercial Arbitration, provides a structured framework for this crucial process. This article delves into the nuances of Section 11, examining its provisions, relevant case laws in India and abroad, and practical examples.

Understanding Section 11 of the Arbitration and Conciliation Act, 1996 (India)

Section also 11 outlines the procedure for appointing arbitrators when parties fail to agree on a mechanism within their arbitration agreement. It empowers the Supreme Court or the High Court, depending on the nature of the arbitration, to appoint arbitrators.

Key Provisions of Section 11 of the Act:

• Subsection (1): A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.
• Subsection (2): Parties are free to agree on a procedure for appointing the arbitrator or arbitrators subject to sub-section 6.
• Subsection (3): Failing an agreement under subsection (2), in a three-arbitrator tribunal, each party appoints one arbitrator, and the two appointed arbitrators appoint the third (presiding) arbitrator.
• Subsection (4): If a party fails to appoint its arbitrator within 30 days of receiving a request, or if the two appointed arbitrators fail to agree on the third within 30 days, the appointment shall be made, upon request of a party, by the arbitral institution designated by the Supreme Court in case of international commercial arbitration or the High Court in case of arbitration other than international commercial arbitration.
• Subsection (5): In a sole arbitrator scenario, if the parties fail to agree on the arbitrator, the appointment shall be made, upon request of a party, by the Supreme Court or the High Court according to the provisions of sub-section 4.
• Subsection (6A): This subsection, inserted by the 2015 Amendment (Act 3 of 2016), significantly narrowed the court's scope when dealing with Section 11 applications. It mandated that the court's examination be confined to the existence of an arbitration agreement.
• The driving forces for the change brought about by the insertion of section 11(6A) stem from recommendations of the 246th Law Commission report.
• Subsection (7): An appointment made under this section shall be final.

Case Laws in India:

• S.B.P. & Co. v. Patel Engineering Ltd. (2005): Established a broad judicial mandate under Section 11, empowering the Chief Justice (or designate) to decide on the existence and validity of the arbitration agreement.
• Arbitration and Conciliation (Amendment) Act, 2015: Introduced subsection (6A), limiting the court's role strictly to determining the existence of an arbitration agreement.
• Duro Felguera, S.A. v. Gangavaram Port Ltd. (2017): Reinforced the restrictive mandate of Section 11(6A), minimizing judicial interference.
• Vidya Drolia and Ors. v. Durga Trading Corporation (2020): Clarified the meaning of "existence of an arbitration agreement" under Section 11.

Comparative Jurisprudence:

• United Kingdom: The English Arbitration Act 1996 balances party autonomy and judicial oversight in arbitrator appointments.
• United States: The Federal Arbitration Act (FAA) establishes a federal framework, allowing courts to intervene when necessary.
• UNCITRAL Model Law: Emphasizes party autonomy while providing default mechanisms for arbitrator appointments.

Practical Examples:

• Example 1: A contract between Company A and Company B contains an arbitration clause. If they fail to agree on an arbitrator, Company A applies to the High Court under Section 11(5), which appoints an arbitrator.
• Example 2: A joint venture agreement stipulates a three-arbitrator tribunal. If one party fails to appoint its arbitrator, the other party applies to the Supreme Court under Section 11(4).

Key Considerations:

Section 11 of the Arbitration and Conciliation Act, 1996, serves as a crucial mechanism for initiating arbitration effectively. Courts prioritize:

• Enforcing party-agreed appointment procedures
• Ensuring arbitrator impartiality and independence
• Promoting efficiency to avoid delays

The 2015 amendment emphasizes the existence of an arbitration agreement as the primary focus of judicial review.

Loopholes in Section 11 of the Arbitration and Conciliation Act, 1996:

• Judicial Overreach and Delays: Courts often conduct in-depth examinations, causing delays despite amendments intended to restrict judicial intervention.
• Weak Timelines and Institutional Support: The 60-day timeframe for Section 11 applications is not strictly enforced, leading to delays.
• Ambiguity in Arbitrator Qualifications and Conflicts: Section 11 lacks a clear process for assessing arbitrator qualifications and conflicts, leading to potential disputes later.

Conclusion:
Section 11 of the Arbitration and Conciliation Act, 1996, serves as a crucial mechanism for initiating arbitration proceedings in India. This section empowers parties who have agreed to resolve disputes through arbitration to approach the relevant court for the appointment of an arbitrator, particularly when one party is unwilling to cooperate. This judicial intervention ensures that the agreed-upon arbitration process can be effectively set in motion, upholding the sanctity of the arbitration agreement and facilitating an alternative dispute resolution mechanism outside the traditional court system. Without this provision, parties might face significant hurdles in enforcing their right to arbitrate, undermining the very purpose of including an arbitration clause in their contracts.

The 2015 amendment to Section 11 significantly narrowed the scope of judicial intervention during the arbitrator appointment stage. Prior to the amendment, courts often delved into the merits of the dispute and the validity of the arbitration agreement, potentially causing delays. The revised provision restricts the court's role primarily to examining the existence of a valid arbitration agreement.

This deliberate curtailment reinforces party autonomy by allowing them to proceed with arbitration as intended, minimizing judicial interference. It also aligns with international best practices that favour expedited arbitration, reflecting a global trend towards streamlining the process and recognizing arbitration as an efficient and effective means of dispute resolution.

Written By: Md.Imran Wahab, IPS, IGP, Provisioning, West Bengal
Email: imranwahab216@gmail.com, Ph no: 9836576565