Section 11 –

Appointment of an
Arbitrator
 • Section 11(1): the arbitrator may be appointed of any nationality.
• Section 11(2): the Parties are free to agree on a procedure for
appointing arbitrator(s).
• Section 11(3): in case the Parties are unable to agree on a
procedure for appointing three arbitrators, each Party shall appoint
an arbitrator (as in accordance with Section 11(2)), and then the two
Appointment of an arbitrators appointed shall appoint the third (presiding arbitrator).

Arbitrator under
• Section 11(3A) – (2019 Amendment) - The Supreme Court and the
High Court shall have the power to designate, arbitral institutions,

Section 11 of the
from time to time, graded by the Council under Section 43-I of the
Act. (When no graded institution is available, then the Chief Justice
of the HC shall maintain a panel of arbitrators which shall be
A&C Act deemed to be an arbitral institution). The arbitrators shall be entitled
to the fees as laid under Schedule IV of Act.)
• Section 11(4): in a case when a Party fails to appoint an arbitrator
within 30 days of the other party’s request, or two arbitrators fail to
appoint the third arbitrator within 30 days, then the Supreme Court
(in case of ICA) and HC (in case of non-ICA), shall on application
appoint the arbitrator(s).
• Section 11(5) lays down the same procedure as under Section 11(4)
however, in cases of sole arbitrator.
• Section 11(6): Failure to appoint
• A Party fails to act as per procedure,
• Parties or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure,
• a person, including an institution, fails to perform any function entrusted to him or it under that procedure
Then, the aggrieved Party may file an application before the SC/HC for the appointment of an arbitrator.
• Section 11(6A): The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section
(4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the
examination of the existence of an arbitration agreement.
• Section 11(8) – The SC/HC/Person/Institution before appointing an arbitrator, shall seek disclosure from the prospective
arbitrator of (a) any disqualifications for the arbitrator by the agreement by parties, (b) the contents of the disclosure and other
considerations as are likely to secure the appointment of an independent and impartial arbitrator. – Disclosure – Section 12(1) of
the Act.
• Section 11(9) – For ICA, the nationality of the arbitrator may be appointed other than the nationality of the Parties.
• Section 11(13) – the appointment shall be made as expeditiously as possible and an endeavour to dispose of the petition within
60 days from the date of service to the other Party.
• Section 11(14): the Arbitration Institution shall determine the fees of AT, subject to 4th Schedule.
 • Section 12(1): When considered for appointment as an arbitrator, a
person must disclose in writing any circumstances that may impact their
independence, impartiality, or ability to commit adequate time to the
arbitration. This includes (a) any direct or indirect relationships or interests
with the parties or the subject matter in dispute that could reasonably
raise justifiable doubts about their impartiality, and (b) any factors that
may hinder/affect their capacity to complete the arbitration within twelve
months.

Grounds for • The grounds stated in the Fifth Schedule shall guide in determining
whether circumstances exist which give rise to justifiable doubts as to the

Challenge: Section independence or impartiality of an arbitrator. The disclosure shall be made

by such person in the form specified in the Sixth Schedule.

12 of the A&C Act • Section 12(3): An arbitrator can be challenged if there (a) circumstances
exist to doubt their independence or impartiality, (b) if they lack the
qualifications agreed upon by the parties.
• Section 12(4): A party may challenge an arbitrator appointed by him, or in
whose appointment he has participated, only for reasons of which he
becomes aware after the appointment has been made.
• Section 12(5) Any person whose relationship, with the parties or counsel
or the subject-matter of the dispute, falls under any of the categories
specified in the Seventh Schedule shall be ineligible to be appointed as
an arbitrator:
 • Section 13(1): Under this provision, the Parties (subject to (4))
are free to agree to a procedure for the challenging an arbitrator.
• Section 13(2): A Party, by written statement, may challenge the
arbitrator's appointment within 15 days from the date of the
constitution of the AT or from the date he becomes aware of the
Challenge grounds under Section 12.

Procedure: Section • Section 13(3): The Arbitrator may withdraw itself from the
appointment, or it may then decide the challenge.
13 • Section 13(4): If the challenge is not successful, the AT shall
proceed with the proceedings and pass an award.
• Section 13(5): the challenging party can then challenge the
award under Section 34
• Section 13(5): Where an arbitral award is set aside under
Section 34, the Court may then decide whether the arbitrator
was entitled to any fees or not.
Durga Welding Works v. Chief Engineer, Railway
Electrification, C.A. 54 of 2019
Facts

• Tender & Agreement: M/s Durga Welding Works (Appellant) was awarded a tender by the Railway Electrification
Department, Allahabad (Respondent) on 30.11.2006. The agreement included an arbitration clause.
• Request for Arbitrator: Due to unsettled claims, the Appellant issued a Legal Notice on 03.08.2009 for the
appointment of an arbitrator. The Respondent failed to act on it.
• High Court Application: The Appellant filed an application under Section 11(6) of the Arbitration and Conciliation
Act but did not pursue it or serve notice to the Respondent.
• Respondent’s Panel Proposal: On 28.01.2010, the Respondent suggested a panel of four arbitrators. The Appellant
was to select two names.
• Miscellaneous Application: On 17.02.2010, the Appellant sought to restrain the Respondent from appointing an
arbitrator but did not follow up.
• Arbitral Tribunal Formation: The Appellant selected two arbitrators (28.08.2010), and the tribunal was constituted.
Both parties submitted claims and defenses (Oct-Nov 2010).
• Objection to Tribunal: On 27.12.2011, the Appellant argued that the tribunal’s constitution was invalid. The Tribunal
rejected the plea and continued proceedings.
• Ex-Parte Award: The Appellant stopped participating, and the tribunal issued an ex-parte award on 21.06.2013,
rejecting the Appellant’s claim.
• High Court Dismissal: In 2016, the High Court finally issued notices in the long-pending Section 11(6) application
and dismissed it on 26.07.2019, allowing the Appellant to file objections under Section 34 or 37.Supreme Court
Appeal: Aggrieved, the Appellant filed the present appeal before the Supreme Court.
ISSUE:

Whether the High Court can appoint an Arbitrator under Section 11(6) of
the Act, after the Arbitral Tribunal was appointed with the consent of the
parties and an Ex-Parte Award was passed by it?
HELD:

• The Appellant failed to act on its Section 11(6) application and did not even serve notice to the
Respondent.

• Despite the pending application, the Appellant selected arbitrators from the Respondent's panel,
leading to the constitution of the Arbitral Tribunal.

• By submitting its statement of claim, the Appellant demonstrated a willingness to proceed with
arbitration.

• High Court’s Decision Upheld: Given the peculiar circumstances, the Supreme Court held that the High
Court was correct in dismissing the Appellant's application under Section 11(6).

• The Respondent forfeits the right to appoint an Arbitrator once a Section 11(6) application is filed, the
Appellant's conduct in this case negated such forfeiture.

• The Supreme Court dismissed the appeal, affirming that the Respondent's arbitrator appointment was
valid.
Pravin Electricals Pvt Ltd v. Galaxy Infra and
Engineering Pvt Ltd.
2021 SCC Online SC 190.
 Facts
• Through an online tender, the Chief Engineer, South Bihar Power Distribution Company Ltd.
(SBPDCL) had invited bids for the appointment of implementing agencies for the execution of a
Scheme on a turnkey basis, for strengthening, improving and augmentation of distribution systems
capacities of 20 towns in Bihar. Pravin Electricals Pvt. Ltd. (PEPL) submitted its technical and financial
bid and was declared the L1 bidder and awarded the work.
• Galaxy contended that it had made substantial efforts under the Agreement, to facilitate PEPL in
getting the aforesaid contract for which it was entitled to a commission. Galaxy contended that a
draft of the Agreement was sent over email by PEPL, for comments and confirmation, and a final
agreement was also agreed upon through correspondence between the parties.
• Pertinently, Galaxy raised invoices on one M/s Process Construction and Technical Services Pvt. Ltd.
(‘Process’), a sub-contractor-ship with PEPL. The relationship of Process with PEPL was disputed,
however, it was argued by Galaxy that Process was acting on behalf of PEPL, and PEPL had the
knowledge of the same. Galaxy sent the final invoice to PEPL, followed by a demand-cum-legal
notice and sought payment of the amount due under the Agreement.
• PEPL denied the existence of the Agreement and called upon Galaxy to provide a copy of the alleged
Agreement and payment details referred to in the legal notice, the same was finally supplied on 14
May 2018.
• Galaxy thereafter invoked the arbitration clause under the Agreement and nominated an arbitrator.
PEPL once again denied execution of the Agreement and, refused to concur with the nomination of
the arbitrator. Galaxy filed a petition under Section 11(6) of the Act, for the appointment of a Sole
Arbitrator. The HC, inter-alia held that the documents placed on record by Galaxy clearly evidenced
that there existed an arbitration agreement between the parties as contained in the draft
Agreement exchanged via emails and thus, appointed a Sole Arbitrator.
 Contentions
• Contentions raised by PEPL
• Since the Agreement in dispute itself does not exist, there cannot be any arbitration clause,
• The fact that negotiations have taken place after such an alleged Agreement shows that such alleged
agreement did not exist.
• The alleged Agreement is notarized at Faridabad, Haryana, while one party is from Bihar and the other is from
Mumbai and further that the notary’s license had expired way before when notarization allegedly took place;
and
• Lastly, the invoices raised on Process, and the subsequent payments made were only under a separate
agreement entered into between Galaxy and Process.

• Contentions raised by Galaxy

• Even if the Agreement is not relied upon, an arbitration clause exists in the draft agreement that was
exchanged between the parties, which culminated in a final agreement; and
• The correspondences between SBPDCL and Galaxy are to be seen, the same were also being marked to
PEPL, and it is thus clear that Galaxy acted as a go-between and successfully obtained the bid for PEPL, and
was thus entitled to its commission.
HELD:
• The emails dated 22nd July, 2014 and 25th July, 2014 produced here for the first time as well as
certain correspondence between SBPDCL and the Respondent do show that there is some dealing
between the Appellant and the Respondent qua a tender floated by SBPDCL, but that is not
sufficient to conclude that there is a concluded contract between the parties, which contains an
arbitration clause. Given the inconclusive nature of the finding by CFSL together with the signing of
the agreement in Haryana by parties whose registered offices are at Bombay and Bihar qua works
to be executed in Bihar; given the fact that the Notary who signed the agreement was not
authorised to do so and various other conundrums that arise on the facts of this case, it is unsafe to
conclude, one way or the other, that an arbitration agreement exists between the parties.

• The prima facie review spoken of in Vidya Dhrolia (supra) can lead to only one conclusion on the
facts of this case - that a deeper consideration of whether an arbitration agreement exists between
the parties must be left to an Arbitrator who is to examine the documentary evidence produced
before him in detail after witnesses are cross-examined on the same.
Amazon.Com NV Investment Holdings LLC v.
Future Coupons Private Limited & Ors.

2021 SCC OnLine Del 1279.

Facts
• Amazon.com NV Investment Holdings LLC (‘Amazon’) entered into a Shareholder and Share
Subscription Agreements with Future Coupon Private Limited (FCPL). Through this agreement,
Amazon invested an amount of 1431 Crores and intended to acquire a 49% stake in FCPL which
was to be flown into Future Retail Ltd (‘FRL’). Pertinently, it was agreed between the parties,
Amazon’s investment was to continue in FRL in their retail assets, and accordingly, FRL could
not transfer its retail assets without Amazon’s approval and never to the restricted people which
included Mr. Mukesh Ambani. The agreements contained an arbitration agreement, wherein
parties resolved to settle their disputes in accordance with the Arbitration Rules of the Singapore
International Arbitration Center (SIAC). The parties had further resolved to have the seats in New
Delhi.
• After almost a year, FRL and other group companies of the Future group entered into a
transaction with the Reliance Group. The said transaction was to lead towards an amalgamation
of FRL with Reliance which also included the transfer of the retail assets of FRL to retail group.
• Aggrieved by such action/transaction, Amazon filed an application for emergency relief with the
Registrar of the SIAC Court of Arbitration seeking an interim prohibitory injunction to prevent FRL
and FCPL from taking further steps in the aforesaid transaction with the Reliance Group.
Parallelly, FRL filed a suit before the Delhi High Court registered as CS(COMM) No. 493 of 2020,
against Amazon for tortious interference in the Scheme for the sale of assets.
• The emergency arbitrator appointed by SIAC, passed an interim award restraining Future
Group with the said transaction with Reliance. However, Future anyway proceeded with the
transaction, claiming the interim award as nullity.
• FRL then filed a suit before DHC seeking a stay of arbitration proceedings and an interim
relief restraining Amazon from writing to statutory authorities. However, DHC refused to
grant the relief.
• Amazon filed a petition seeking enforcement of the Emergency Arbitrator’s Award under
Section 17(2) of A&C Act 1996 before a Single Bench of DHC. Accordingly, the DHC
restrained Future Group from proceeding with the transaction with Reliance. FRL
challenged the Order passed by the Hon’ble Single Judge before the Division Bench, which
stayed the order of the Single Bench. Amazon then filed a SLP, which stayed all the
proceedings before the DHC.
Issues

• What is the legal status of an Emergency

Arbitrator i.e. whether the Emergency Arbitrator
is an arbitrator and whether the interim order of
the Emergency Arbitrator is an order under
Section 17(1) and is enforceable under 17(2) of
the Arbitration and Conciliation Act?

• Whether the Emergency Arbitrator misapplied

the Group of Companies doctrine which applies
only to proceedings under Section 8 of
the Arbitration and Conciliation Act as alleged
by respondent No. 2 (Reliance)?
 What is the legal status of an Emergency Arbitrator i.e. whether the Emergency
Arbitrator is an arbitrator and whether the interim order of the Emergency Arbitrator is
an order under Section 17(1) and is enforceable under 17(2) of the Arbitration and
Conciliation Act?

• The status of the Emergency Arbitrator is based on party autonomy as the law gives complete
freedom to the parties to choose an arbitrator or an Arbitral Institution. The powers of the
Emergency Arbitrator are the same of those of an Arbitral Tribunal to decide the interim measures.
• The Emergency Arbitration is a very effective and expeditious mechanism to deal with the
Emergency Interim Relief Application and has added a new dimension to the protection of the
rights of the parties. The advantage of the Emergency Arbitration mechanism is that a litigant is
able to get the justice within 15 days, which is not possible in Courts. However, if the order of the
Emergency Arbitrator is not enforced, it would make the entire mechanism of Emergency
Arbitration redundant.
• By virtue of Section 2(8) of the Arbitration and Conciliation Act, the Rules of Singapore
International Arbitration Centre are incorporated in the arbitration agreement between the parties.
By incorporating the Rules of SIAC into the arbitration agreement, the parties have agreed to the
provisions relating to Emergency Arbitration.
• This Court is of the view that the Emergency Arbitrator is an Arbitrator for all intents and purposes,
which is clear from the conjoint reading of Sections of the Arbitration and Conciliation Act and the
Rules of SIAC which are part of the arbitration agreement is wide enough to include an Emergency
Arbitrator.
• Under Section 17(1) of the Arbitration and Conciliation Act, the Arbitral Tribunal has the same
powers to make interim order, as the Court has, and Section 17(2) makes such interim order
enforceable in the same manner as if it was an order of the Court. The Interim Order is appealable
under Section 37 of the Arbitration and Conciliation Act.
 Whether the Emergency Arbitrator misapplied the Group of Companies doctrine which
applies only to proceedings under Section 8 of the Arbitration and Conciliation Act as
alleged by respondent No. 2 (‘FRL’)?

• The law relating to the Group of Companies doctrine is well settled by the Supreme Court
in Chloro Controls India Private Limited v. Sever N Trent Water Purification Inc., (2013) 1 SCC
641, Cheran Properties Limited v. Kasturi and Sons Limited, (2018) 16 SCC
413 and MTNL v. Canara Bank, (2020) 12 SCC 767. The Group of Companies doctrine binds
the non-signatory entity where the multiple agreements reflect a clear intention of the parties to
bind both the signatory and non-signatory entities within the same Group. The Supreme Court
has laid down various tests for invoking Group of Companies doctrine in the aforesaid
judgments.
• The Supreme Court laid down the tests to be applied for invoking the Group of Companies
doctrine namely, (i) direct relationship to the party signatory to the arbitration agreement, (ii)
direct commonality of the subject-matter and (iii) the agreement between the parties being a
composite transaction. (iv) The transaction should be of a composite nature where performance
of the mother agreement may not be feasible without aid, execution and performance of the
supplementary or ancillary agreements, for achieving the common object and collectively having
bearing on the dispute. (v) Besides all this, the Court has to examine whether a composite
reference of such parties would serve the ends of justice.
Applying the well settled law relating to Group of Companies doctrine laid down by the Supreme Court to
the present case, this Court is satisfied that the Group of Companies doctrine is applicable to the present
case and respondent No. 2 is a proper party to the arbitration proceedings for the reasons given by the
learned Emergency Arbitrator and more particularly the following:—
• 1. Signatory and non-signatory company (FRL) belong to the same Biyanis Group.
• 2. The conduct of the parties reflects clear intention to bind the signatory as well as non-signatory
company (FRL) of Biyanis Group.
• 3. Simultaneous discussions and negotiations of the agreements, and common negotiating and legal
team represented the signatory and non-signatory company (FRL).
• 4. Direct relationship of the non-signatory company to the signatory company of the Group, direct
commonality of the subject matter and composite nature of transaction between the parties. It is
apparent that none of these Agreements would have been entered into without the others.
• 5. The funds of the signatory company have been used to financially support the non-signatory
company of the Group.
• 6. The agreements are so intermingled that their composite performance only shall discharge the
parties of their respective mutual obligations.
• 7. Similar disputes resolution clause in all the agreements reflects common intention of all the parties,
both signatory and non-signatory, to arbitrate.
• 8. The composite reference of disputes of all the parties including non-signatory would serve the ends
of justice.