When the Agreement specifies particular type/mode of constitution of Arbitral Tribunal, the same should be followed in strict sense- Supreme Court clarified.

The Courts itself has no power under Section 11(6) of Arbitration and Conciliation Act to appoint Arbitrator/s against the terms of the Contract regarding constitution of Arbitral Tribunal. In the given case, the Agreement specifies that the Arbitral Tribunal shall consist of a panel of three Gazetted Railway Officers and three retired Railway Officers retired not below the rank of Senior Administrative Grade Officers. But, the High Court has appointed an independent Sole Arbitrator in an application filed under Section 11 of the Act by overlooking the express provisions of the Contract.

    The Supreme Court, after analysing all the clauses of the Contract and also analysing the various judgments, has come to the conclusion that “When the agreement specifically provides for appointment of Arbitral Tribunal consisting of three arbitrators from out of the panel serving or retired Railway Officers, the appointment of the arbitrators should be in terms of the agreement as agreed by the parties. That being the conditions in the agreement between the parties and the General Conditions of the Contract, the High Court was not justified in appointing an independent sole arbitrator ignoring Clauses 64(3)(a)(ii) and 64(3) (b) of the General Conditions of Contract and the impugned orders cannot be sustained”

    Thus, it has been declared by the Apex Court that appointment of Arbitrator should be in accordance with the mode specified in the Contract.

Case Law-CENTRAL ORGANISATION FOR RAILWAY ELECTRIFICATION VERSUS M/S ECI-SPIC-SMO-MCML (JV) A JOINT VENTURE COMPANY – Date of Decision of Supreme Court  – 17-12-2019)