Court Lacking Jurisdiction To Appoint An Arbitrator, Cannot Do So Based No Objection By The Opposite Party: Bombay High Court

The Bombay High Court has ruled that a Court cannot appoint an Arbitrator when the only proceeding before it is an application for grant of interim measures under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act), solely on the ground that the opposite party has not objected to the appointment of an Arbitrator. The Single Bench of Justice Manish Pitale held that even if an arbitration clause exists, appointment of an Arbitrator can only take place in accordance with the law. The Court added that merely because no objection is endorsed by the opposite party, a Court will not be foisted with the jurisdiction to appoint an Arbitrator. The respondent Anil Malewar filed an application under Section 9 of the A&C Act before the Principal District Judge, Bhandara, Maharashtra. The District Judge passed an order prohibiting creation of third-party rights in a specified property, till the culmination of arbitration proceedings. The District Judge also appointed an Arbitrator. The petitioner Purushottam Badwaik filed a writ petition before the Bombay High Court challenging the order passed by the District Judge. The petitioner submitted before the Bombay High Court that while deciding the application for interim measures under Section 9 of the A&C Act, the District Judge could not have appointed an Arbitrator, as if an application for appointment of an Arbitrator under Section 11 was also placed before it for consideration. The petitioner contended that the order appointing the Arbitrator was wholly without jurisdiction, because the only proceeding for consideration before the District Judge was the application filed under Section 9 for interim measures. The respondent submitted that an application for appointed of an Arbitrator was filed before the District Judge, which contained an endorsement on behalf of the petitioner that it had no objection to the appointment of any Arbitrator specified in the application. The respondent thus submitted that the appointment was made by a procedure agreed upon between the parties under Section 11(2) of the A&C Act. The High Court noted that during the pendency of the application for interim measures under Section 9, the respondent had moved an application for appointment of the specified person as an Arbitrator. The Court observed that the District Judge proceeded to appoint an Arbitrator on the ground that the petitioner had not objected to the appointment of the named person as an Arbitrator. The Court ruled that the application filed for appointment of an Arbitrator by the respondent could not be traced to any provision of the A&C Act, let alone Section 11, that dealt with the appointment of an Arbitrator. The Court held that even if an arbitration clause did exist, appointment of an Arbitrator could only take place in accordance with the law. The Court added that merely because no objection was endorsed by the petitioner to the application for appointment of an Arbitrator, it would not ipso facto mean that the District Judge was foisted with the jurisdiction to appoint an Arbitrator. The Court ruled that it is of no consequence that the petitioner had no objections to the appointment of an Arbitrator, if it is found that the District Judge could not have exercised power in the first place to entertain the application for appointment of an Arbitrator. The Court, therefore, quashed the order of the District Judge appointing an Arbitrator, while upholding the District Judge's order prohibiting creation of third-party rights in the specified property till culmination of the arbitral proceedings. The Court thus partly allowed the writ petition. Case Title: Purushottam s/o Tulsiram Badwaik and Ors. versus Anil s/o Hariram Malewar and Ors. Dated: 07.04.2022 (Bombay High Court)Citation: 2022 LiveLaw (Bom) 146 Counsel for the Petitioner: Ms. Shiba Thakur, Advocate h/f Mr. S.S Sanyal, Advocate Counsel for the Respondent: Mr. N.B. Kalwaghe, Advocate Click Here To Read/Download Order

Court Lacking Jurisdiction To Appoint An Arbitrator, Cannot Do So Based No Objection By The Opposite Party: Bombay High Court

Parina Katyal

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