Court’s power to appoint arbitral tribunal detailed

The Supreme Court in Union of India v Besco Ltd answered the questions of whether the chief justice of a high court or any person or institution designated by the chief justice, while exercising power under section 11(6) of the Arbitration and Conciliation Act, 1996, is bound to nominate an arbitrator as specified in the agreement for arbitration and whether deviations are permissible.

The special leave petition was filed on the grounds that Delhi High Court could not have nominated an independent arbitrator upon the claimants’ failure to appoint one within the time frame permitted under the arbitration agreement and outside of the provisions of the arbitration agreement.

The petitioner contended that the high court was “bound to nominate a person as stipulated in the agreement for arbitration” only, and relied on the Supreme Court’s decisions in Union of India and another v MP Gupta (2004) and Union of India and others v Master Construction Company (2011), where strict adherence to the terms was mandated.