Once Arbitration Clause mentions name of the Arbitral Institution, no need to name the Arbitrator, Read HC Order

The Karnataka High Court has held that for invocation of Arbitration Clause, mentioning that matter is referred to the concerned Institution is sufficient and there is no specific requirement to mention Arbitrator's name in the Notice.

The Single-Judge Bench of Justice Suraj Govindaraj in this view in a petition seeking appointment of Arbitrator further observed that what a party is required to do is only to refer the matter to the said institution and it is for the institution to appoint an arbitrator.

The petitioner and the respondent had entered into an agreement for ‘Interior Architectural Services and Construction/Execution’ governed by Arbitral Clause.

The contention of the learned counsel for the petitioner was that though the petitioner had approached the Council of Architecture, the said Council had rejected the claim of the petitioner to appoint an arbitrator on account of the petitioner being a Limited Liability Partnership and that one of the partners M/s.Arun John Kallumkal is not an architect.

Learned Counsel for the respondent however submitted that since the Council of Architecture has stated that LLP cannot be a member of the Council and one of the partners of LLP is not an architect, the arbitration clause itself is non-est and void and cannot be relied upon.

He further stated that the notice issued under Section 21 of the Arbitration and Conciliation Act, 1996 has not specifically invoked the arbitration clause but has only stated that the matter would be referred to the Council of Architecture. Therefore, he submitted that the arbitration clause is void ab initio.

As regard to the first issue of the Council of Architecture having refused appointment of arbitrator, the Court was of the view the petitioner should approach the Council of Architecture placing the facts on record that other partners are architect.

It opined that even if one of the partners is an architect registered with the Council of Architecture, the said Council would have jurisdiction to appoint an arbitrator and thus requested the Council for Architecture to consider the request of the petitioner.

As regards the contention of the respondent that the refusal by the Council of Architecture goes to the root of the matter rendering the clause itself invalid and non-est, the Court opined that the same is completely malafide argument deserving to be deprecated in strongest terms.

"A party to an arbitration is entitled to take the contentions which are legally permissible but not malafide arguments. The parties having agreed to refer the dispute to an arbitration and the agreement itself being one for ‘Interior Architectural Services and Constructing/Execution’, the respondent was always aware that the petitioner is an architectural firm of which one of the partners was an architect. Now after dispute having arisen, the respondent has indulged itself in such a malafide contentions."

In view of the above, the Court stated that mentioning that matter has been referred to the Council of Architecture was sufficient for the purpose of invocation, since the Council of Architecture is an arbitral institution within the meaning of Section 11 of the Arbitration and Conciliation Act, 1996 and what a party is required to do is only to refer the matter to the said institution and for the institution to appoint an arbitrator. 

"There is no specific requirement for a party to name an arbitrator. It is sufficient if there is a mention made that the matter would be referred to the institution for arbitration," the Court ruled.

Refraining from imposing cost on the respondents, the Court disposed off the petition granting liberty to the petitioner to approach Council of Architecture for resolve of theentire issue.

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