The Chhattisgarh High Court has clarified that where parties mutually agree on the identity of an arbitrator, the court’s role under Section 11(6) of the Arbitration and Conciliation Act, 1996 is limited to formalizing that consensus - regardless of prior procedural irregularities. This decision reinforces party autonomy as a cornerstone of arbitration jurisprudence.
Background & Facts
The Dispute
The applicant, KMAG International, entered into a Railway Siding Lease Agreement with Nova Iron and Steel Ltd. on 10.05.2023, effective from 01.07.2023. The agreement contained a lock-in period of two years and an arbitration clause under Clause 15. Despite the applicant’s full performance, the respondents terminated the agreement on 19.08.2023 without addressing the applicant’s reply. The applicant challenged this termination before the Commercial Court, Raipur, which granted an interim stay on 07.09.2023. The respondents’ appeal against this order was dismissed by the Chhattisgarh High Court on 13.12.2023.
Procedural History
- 06.02.2024: Applicant issued arbitration notice under Section 21.
- ARBR No. 30/2024: Filed under Section 11(6) seeking appointment of arbitrator; court appointed Hon’ble Justice (Rtd.) V.K. Shrivastava on 17.09.2024.
- 09.11.2024: Arbitral proceedings commenced.
- 22.02.2025: Respondents issued a second termination notice alleging non-payment, maintenance failure, and fraud - without serving a show-cause notice.
- Arbitration MJC No. 15/2025 & 16/2025: Section 9 applications filed before Commercial Court, Raipur; disposed of on 20.05.2025.
- 16.08.2025: Respondents issued new arbitration notice proposing Justice (Rtd.) V.K. Shrivastava as arbitrator.
- Present Application (ARBR No. 52/2025): Filed under Section 11(6) seeking court appointment, despite prior appointment, due to renewed dispute.
Relief Sought
The applicant sought appointment of a qualified arbitrator under Section 11(6), affirming consent to Justice (Rtd.) V.K. Shrivastava and requesting the court to formally appoint him to resolve all pending disputes.
The Legal Issue
The central question was whether the court must appoint a new arbitrator under Section 11(6) when the parties have already agreed on a specific arbitrator, even if a prior appointment was made in a related proceeding.
Arguments Presented
For the Appellant/Petitioner
Counsel argued that a valid arbitration agreement exists under Clause 15, and the parties have unequivocally consented to the appointment of Justice (Rtd.) V.K. Shrivastava. The prior appointment in ARBR No. 30/2024 was rendered ineffective by the issuance of a new termination notice and fresh arbitration notice. The applicant emphasized that party autonomy under Section 11(6) permits the court to act on mutual consent, and no prejudice arises from reappointing the same arbitrator.
For the Respondent/State
The respondents did not oppose the appointment but confirmed their willingness to accept Justice (Rtd.) V.K. Shrivastava as the sole arbitrator. Their counsel did not contest jurisdiction, validity of the arbitration clause, or the need for appointment, effectively conceding the applicant’s position.
The Court's Analysis
The Court examined the nature of Section 11(6), which empowers the court to appoint an arbitrator when parties fail to agree on one. However, the Court emphasized that the provision is not a mandatory procedural hurdle but a safeguard for situations of deadlock. Here, no deadlock existed. The parties had not merely acquiesced - they actively affirmed their joint preference for Justice (Rtd.) V.K. Shrivastava, a retired judge of the same High Court.
"The object of the Arbitration and Conciliation Act is to minimize judicial intervention and promote party autonomy. Where parties are in agreement, the court’s role is not to impose procedural rigidity but to facilitate the agreed mechanism."
The Court distinguished Punj Lloyd Ltd. v. Petronet MHB Ltd. and Voith Hydro v. SAIL, which emphasized judicial scrutiny in cases of disputed arbitrator eligibility. Here, there was no dispute over the arbitrator’s qualifications, impartiality, or availability. The Court further noted that the prior appointment in ARBR No. 30/2024 was not vacated by law, but the emergence of a new termination notice and fresh dispute created a distinct arbitral context. Reappointing the same arbitrator under the same clause was not only permissible but efficient.
The Court held that consent of parties to a specific arbitrator, especially one with judicial experience, satisfies the spirit and letter of Section 11(6). The court’s function is not to question the wisdom of the choice but to validate it when unchallenged.
The Verdict
The applicant succeeded. The Court held that mutual consent of parties to appoint a specific arbitrator overrides procedural defaults under Section 11(6). It formally appointed Hon’ble Mr. Justice V.K. Shrivastava (Retd.) as the sole arbitrator to adjudicate all disputes arising from the lease agreement and subsequent terminations.
What This Means For Similar Cases
Consent Trumps Procedural Formalities
- Practitioners may now confidently seek court appointment under Section 11(6) even after a prior appointment, provided parties have renewed consent to the same arbitrator.
- A fresh dispute arising from new events (e.g., a second termination notice) justifies a new application, even if the same arbitrator is proposed.
- Courts will not insist on re-initiating the entire Section 11 process if parties are aligned.
Retired Judges Are Preferred Appointees
- The Court’s endorsement of a retired High Court judge signals a preference for judicial experience in complex commercial disputes.
- Parties should proactively propose retired judges in arbitration applications to expedite appointment and enhance perceived neutrality.
- This reduces delays caused by objections to arbitrator qualifications.
No Need to Challenge Prior Appointments
- If a prior arbitrator appointment remains uncontested and the parties agree to continue with the same person, there is no legal requirement to set aside the earlier order.
- The court may treat the new application as a confirmation rather than a correction.
- This reduces litigation costs and avoids redundant proceedings.
