The Jharkhand High Court has ruled that a Second Application for Appointment of Arbitrator can be filed even though no liberty has been granted by the Court while setting aside the Arbitral Award.
The single-judge Bench of Justice Sujit Narayan Prasad observed that an afresh application under Section 11(6)(c) of the of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator is maintainable after an arbitral award has been set aside and quashed by the Court under Section 37 of the Act with no exclusive liberty by the Court.
The petitioner/applicant herein had made fresh request for appointment of Arbitrator in view of the arbitration clause, since, the dispute as has been raised will be said to have not resolved due to quashing and setting aside of the award by the order passed by the Court of Law.
However, the State authorities rejected the said request letter on the ground that there is no question of appointment of fresh Arbitrator for resolution of dispute, on the ground, that there is no liberty having been granted by the Court passing order under Section 37 of the Act, 1996.
The Court framed two questions that needed to be answered:
(i) Whether, in absence of any liberty granted by the Court passing the order under Section 37 of the Act, 1996, can an application under Section 11(6)(C) be held to be maintainable?
(ii) Whether, in a case, where the award has been quashed by the competent court, the disputes remained unresolved, can be allowed to be resolved by appointment of Arbitrator again?
The Court noted at that there is no dispute about the position of law that the second application is not maintainable in absence of any leave by the competent court but, in a case of resolution of dispute, can such principle be held to be applicable, that is the question to be considered by this Court, while answering the aforesaid issues.
"The Arbitration and Conciliation Act, 1996 has been enacted for resolution of dispute, depending upon the terms and conditions of the agreement. The position of law is settled that a man cannot be allowed to remediless and if any dispute is there, the same is required to be decided, either way. There is also no dispute about the fact that in order to resolve the dispute, the specific condition is to be inserted in the contract."
The Court rejected respondent-State's objection noting that there is no dispute about the fact and no dispute has also been raised on behalf of the respondent State of Jharkhand that the dispute which was the subject matter of the original application filed under Section 11(6)(C) of the Act, 1996, remain un-conclusive and if the instant application will be held to be not maintainable then the dispute which is the subject matter of the contract, will remain undecided.
Relying on Mcdermott International Inc. Vs. Burn Standard Co. Ltd. & Ors, 2006 Latest Caselaw 316 SC, the Court noted that in a case, where the award has been quashed, it is open upon the parties to begin the arbitration again, if it is desired.
"This proposition, itself clarifies that in a case where the dispute has not been resolved and the award had been quashed, it will be left open upon the parties to raise the dispute, reason being that the dispute if not resolved cannot be allowed to remain un-conclusive."
The Court also made referrence to The Project Director, National Highways No. 45 E and 220 National Highways Authority of India Vs. M. Hakeem, 2021 Latest Caselaw 281 SC, Dakshin Haryana Bijli Vitran Nigam Ltd. Vs. M/s. Navigant Technologies Pvt. Ltd., 2021 Latest Caselaw 111 SC
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