Question

A dispute arises between ABC Ltd. and XYZ Pvt. Ltd. regarding a contract that both parties had entered into. The agreement includes an arbitration clause, which states that any disputes shall be referred to arbitration. However, the parties fail to agree on the appointment of an arbitrator. Which of the following provisions of the Arbitration and Conciliation Act, 1996 would be applicable to resolve the issue of the appointment of an arbitrator?

• A. The arbitrator must be appointed by the Indian Council of Arbitration (ICA) in all cases.
• B. The parties can resolve the appointment issue by opting for conciliation instead of arbitration.
• C. The court will appoint an arbitrator under Section 11 if the parties fail to agree on one.
• D. The parties must mutually select an arbitrator, and if they fail, the arbitration will not take place.

Hint:

Section 11 of the Arbitration and Conciliation Act ensures that arbitration cannot fail merely due to disagreement on appointing the arbitrator.

Answer 1

The Correct Option is C

Step 1: Understanding the issue.
When parties to a contract containing an arbitration clause fail to agree on the appointment of an arbitrator, the matter is governed by the Arbitration and Conciliation Act, 1996.
Step 2: Relevant provision.
Section 11 of the Act empowers the Supreme Court or the High Court (depending on the nature of the arbitration) to appoint an arbitrator if the parties fail to do so within 30 days.
Step 3: Conclusion.
Thus, in such cases, the court intervenes under Section 11 to ensure arbitration proceedings commence fairly.