Right To Appoint Arbitrator Is Not Automatically Forfeited After Expiry Of 30 Days From Date Of Demand Made By Other Party: Gauhati High Court

The Gauhati High Court bench of Justice Yarenjungla Longkumer has held that if an arbitrator is not appointed within 30 days of the demand by the other party, the right to appoint is not automatically forfeited. However, such appointment must be made after the 30-day period but before the other party files an application under Section 11 of the Arbitration Act. This is a petition under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator. The petitioner entered into an agreement dated 01.01.1997 with the Government of Nagaland for printing lottery tickets. From 27.02.1997 to 31.03.1997, the petitioner executed work worth ₹47,88,395, of which only ₹6 lakhs was paid despite repeated demands. The petitioner initially approached courts in Chandigarh, but the Punjab and Haryana High Court, by order dated 29.05.2024, held it lacked territorial jurisdiction to entertain the arbitration petition. The petitioner relied on the Supreme Court judgment in Datar Switchgears Ltd. v. Tata Finance Ltd., which held that under Section 11(6) of the Arbitration Act, the right of a party to appoint an arbitrator is not automatically forfeited after 30 days of a demand. The Apex Court further held that however, if no appointment is made within those 30 days and before the first party moves the court under Section 11, the right to appoint stands forfeited. In this case, the petitioner asserts that the State respondents failed to appoint an arbitrator within 30 days and also did not do so before the petitioner approached the court. While agreeing with the submissions of the petitioner, the court found the dispute to be arbitrable under Clause 23 of the agreement. Accordingly, Mr. Khape Koza, Retired District and Sessions Judge, Nagaland, is appointed as arbitrator, subject to his consent and disclosure. The arbitration will be held in Kohima, Nagaland. Case Title: M/S DRUCKGRAFEN INDIA LIMITED VERSUS THE STATE OF NAGALAND AND 2 ORSCitation: 2025 LiveLaw (Gau) 30 Case Number: Arb.P./4/2024 Judgment Date: 13/06/2025 Advocate for the Petitioner : AMIT PARASHAR, M SOLO,J NEWMAI Advocate for the Respondent : GOVT ADV NL, Click Here To Read/Download The Order

Right To Appoint Arbitrator Is Not Automatically Forfeited After Expiry Of 30 Days From Date Of Demand Made By Other Party: Gauhati High Court

Mohd Malik Chauhan

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