No party can be permitted to unilaterally appoint an Arbitrator: High Court of Delhi.
Where one party unilaterally appoints an arbitrator, it defeats the purpose of unbiased adjudication of disputes between the parties. A single judge bench comprising of Hon’ble Justice Suresh Kumar Kait, in the matter of Hashnine Systems private Ltd. Vs. Eastern Air Command Head (Quarters), Indian Air Force (ARB.P. 356/2021), dealt with an issue where a petition has been filed seeking appointment of an Arbitrator for adjudication of disputes which have arisen between the parties, under Section 11(6) of the Arbitration and Conciliation Act, 1996. In the present case the respondent had arbitrarily invoked the Bank Guarantee No. 00960100000226 dated 14.03.2014 for an amount of Rs 21,36,100/- and Bank Guarantee No. 00960100000249, dated 26.06.2014 for an amount of Rs.10,68,035/-. Time and again the petitioner tried to approach the respondent to resolve the disputes. Petitioner had also sent a legal notice to the respondent to refund the amount and further had sent to make the payment within 15 days or consider it to be a notice as- ‘Notice Invoking Arbitration under Clause 3 of the Part III -Standard Conditions of Supply’. The respondent was asked to appoint an Arbitrator within 60 days to adjudicate the disputes between the parties, but there was no reply to those legal notices and hence was considered that the respondent did not appoint an arbitrator. Thereby the petitioner filed a petition. The respondent submitted that the petition is not maintainable as the respondent had already appointed an arbitrator. To this, the counsel of the petitioner strongly objected and stated that the arbitrator must be appointed in terms contained in clause 3 of Part III – Standard Conditions of Supply, and hence arbitrator unilaterally appointed by the respondent is not acceptable by the petition. After hearing both sides the court observed that- “The arbitration agreement between the parties and invocation of arbitration are not disputed by the respondent. No party can be permitted to unilaterally appoint an Arbitrator, as the same would defeat the purpose of unbiased adjudication of dispute between the parties.” Thereby the court allowed the petition and appointed a sole arbitrator to adjudicate the dispute between the parties.
 ARB.P. 356 2021 IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 13.07.2021 HASHNINE SYSTEMS PRIVATE LIMITED .. Petitioner Through: Mr Avinash Sharma Advocate EASTERN AIR COMMAND HEAD QUARTERS) INDIAN AIR ...... Respondent Through: Mr. Rajesh Kumar Das Advocate with Mr. Shailesh Sharma HON BLE MR. JUSTICE SURESH KUMAR KAIT JUDGMENT The present petition has been preferred seeking appointment of an Arbitrator under Section 11(6) of the Arbitration and Conciliation Act 1996 for adjudication of disputes which have arisen between the parties. The case of the petitioner in nutshell is that respondent has arbitrarily invoked the Bank Guarantee No. 00960100000226 dated 14.03.2014 for an amount of Rs 21 36 100 and Bank Guarantee No. 00960100000249 dated 26.06.2014 for an amount of Rs.10 68 035 and its various efforts to approach the respondent to resolve the disputes went in vain. In such circumstances petitioner sent a Legal Notice dated 16.11.2018 ARB.P. 356 2021 respondent to refund amount of Rs.32 04 135 along with the @18% and further sent a notice dated 02.03.2020 to either make the payment within 15 days or consider the notice as ‘Notice Invoking Arbitration under Clause 3 of the Part III Standard Conditions of Supply Orders No. EAC SO POV 03 2013 14 dated 03.03.2014(Main Order) and EAC SO POV 01 2014 15 dated 26.05.2014which arose between the parties in terms of aforesaid Clause 3. However since no reply to the notice dated 02.03.2021 was received and respondent did not appoint an Arbitrator in accordance conformity with the provisions of the Arbitration and Conciliation Act 1996 the present petition has been preferred. On behalf of respondent it is submitted that an Arbitrator has already been appointed and therefore the present petition is not maintainable. The aforesaid submission on behalf of respondent is strongly objected to by learned counsel for petitioner who submits that the unilateral appointment of an Arbitrator by the respondent is not acceptable to petitioner and Arbitrator has to be appointed in terms contained in Clause 3 of the Part III Standard Conditions of Supply Orders No. EAC SO POV ARB.P. 356 2021 03 2013 14 dated 03.03.2014 12 Bases) Main Order) EAC SO POV 01 2014 15 dated 26.05.2014is appointed as sole Arbitrator to adjudicate the dispute between the parties. The arbitration shall be conducted under the Delhi International Arbitration Centre of the Arbitration and Conciliation Act 1996 and not being ineligible under Section 12(5) of the Act before commencing the arbitration. 10. The fee of the Arbitrator shall be in accordance with the schedule of ARB.P. 356 2021 fees prescribed under the Delhi International Arbitration CentreInternal Management) Rules and Delhi International Arbitration Centre Administrative Cost and Arbitrators’ Fees) Rules 2012. 11. With aforesaid directions the present petition is accordingly disposed 12. A copy of this order be sent to the learned Arbitrator as well as Delhi International Arbitration Centrefor information. JUDGE SURESH KUMAR KAIT) of. JULY 13 2021 ARB.P. 356 2021 