Appointment, Challenge to

appointment &Termination of
Arbitration
Session 7

Ms. Kriti Johri,

Assistant Professor
 Section 11
Section 11 deals with the appointment of arbitrators in arbitration
proceedings.
Parties can agree upon the appointment procedure. If they fail to
agree, they can approach the Supreme Court or High Court under
Sections 11(4), (5), and (6).
Amendments:
2015 Amendment added Section 6A: Court’s examination limited to
the ‘existence’ of an arbitration agreement.
2019 Amendment: Power shifted to arbitral institutions designated
by courts (yet to come into force).
Timeliness in Arbitration Act?

Section 29A (2015 Amendment):

Arbitral award must be delivered within 12
months of completing pleadings,
extendable by 6 months through consent.
Further extensions require court approval.
Section 23(4) (2019 Amendment): 6 months
for filing statement of claim and defense
after tribunal appointment.
Section 34(3): Application to set aside the
award within 3 months.
 Limitation for Appointment of Arbitrators?

No prescribed limitation in Section 11.

BSNL vs Nortel Networks 2013 SC:
The Supreme Court held Article 137 of the Limitation Act applies—
limitation period is 3 years from when the right to apply accrues.
The limitation starts after 30 days from a failure to appoint
following a notice to invoke arbitration.
The Court suggested the need for Parliament to amend Section 11
and introduce a specific limitation period to align with the Act’s
purpose of expeditious dispute resolution.
 CONTD.
The Supreme Court reasoned that the Limitation Act, 1963, applies to
arbitration proceedings, with a three-year limitation period for filing a Section
11 application under Article 137, starting from the refusal of a request to
appoint an arbitrator. The Court clarified that this limitation for invoking
Section 11 differs from the limitation period for substantive contract claims.

It also emphasized that under Section 11(6A), courts should only determine the
existence of an arbitration agreement and leave all other issues, such as time-
barred claims, to the arbitral tribunal.
The Court referenced precedents, including Vidya Drolia, affirming that courts
can refuse to appoint an arbitrator only when it is clear that the claim is ex-facie
time-barred or non-arbitrable. If uncertainty exists, the matter should be
referred to arbitration to respect the tribunal's jurisdiction.
CASE LAWS - LIMITATION PERIOD

M/S B And T Ag vs Court ruled that pre-arbitration negotiations do

Ministry Of Defence not extend the limitation period.
2023 SC
The case established that time spent in good faith
pre-arbitration negotiations can be excluded from
Geo Miller & Co. Pvt. the limitation period for initiating arbitration. The
Ltd. v. Rajasthan Court emphasized that the "breaking point" in
Vidyut Utpadan Nigam negotiations marks the point when the cause of
Ltd. 2019 SC action arises for limitation purposes. Strong
evidence of the negotiation history must be
provided to claim exclusion of the limitation
period.
 Subsection 1-7
Nationality of Arbitrator (Subsection 1):
Any person, regardless of nationality, can be an arbitrator unless otherwise agreed by the parties.
Procedure for Appointment (Subsection 2):
Parties are free to agree on a procedure for appointing arbitrators.
Default Procedure for Three Arbitrators (Subsection 3):
Each party appoints one arbitrator.
The two appointed arbitrators select a third, who will act as the presiding arbitrator.
Court Intervention in Appointment (Subsections 4 & 5):
If a party fails to appoint an arbitrator within 30 days, or the appointed arbitrators fail to agree on a third,
the Supreme Court/High Court or its designate may intervene.
This also applies to sole arbitrator appointments if parties fail to agree within 30 days.
Court Intervention When Agreed Procedure Fails (Subsection 6):
If an agreed appointment procedure breaks down, a party may request the Supreme Court/High Court to
take necessary measures, unless an alternative is provided.
Limited Scope of Court Review (Subsection 6A):
When approached under subsections 4, 5, or 6, the court is confined to examining the existence of an
arbitration agreement.
Finality of Court's Decision (Subsection 7):
Decisions on arbitrator appointments by the Supreme Court/High Court are final, with no appeal allowed.
 Sub Section 8-14
Disclosure Requirement (Subsection 8):
Before appointing an arbitrator, the court seeks a written disclosure regarding the arbitrator’s
independence and impartiality (per Section 12).
International Commercial Arbitration (Subsection 9):
For international cases, the Supreme Court may appoint an arbitrator from a nationality different from
the parties.
Court's Scheme for Handling Appointments (Subsection 10):
The Supreme Court/High Court can create a scheme for arbitrator appointments.
Jurisdiction Over Multiple Requests (Subsection 11):
If multiple requests are made to different High Courts, the one where the request was first made has
jurisdiction.
Supreme Court Jurisdiction for International Cases (Subsection 12):
Supreme Court handles international commercial arbitration;High Courts handle domestic arbitration.
Expeditious Disposal of Applications (Subsection 13):
Courts should resolve arbitrator appointment requests within 60 days of notice to the opposite party.
Fee Determination (Subsection 14):
High Courts may frame rules for determining arbitrator fees, with consideration of the Fourth Schedule.
Section 12: Disclosure by Arbitrators
Mandatory Disclosure:
Arbitrators must disclose any past or present relationships or interests with
parties that may raise doubts about their independence or impartiality.
Ability to Devote Time:
Arbitrators must also disclose if they can complete the arbitration within 12
months.
Challenge Grounds:
Arbitrators can be challenged based on justifiable doubts about
independence or impartiality, or if they lack the required qualifications.
Ineligibility:
Persons with relationships falling under categories in the Seventh Schedule
are ineligible to be appointed unless the parties agree otherwise after the
dispute arises.
 Section 13: Challenge Procedure

Procedure Agreement:
Parties are free to agree on a procedure to challenge an arbitrator.

Challenging Arbitrators:
If no agreement exists, a challenge must be made within 15 days after becoming aware of
the tribunal’s constitution or of grounds for challenge.
Tribunal Decision:
The arbitral tribunal decides on the challenge unless the arbitrator withdraws or the other
party agrees.

Award & Recourse:

If the challenge is unsuccessful, the tribunal continues, and the challenging party can later
request the award to be set aside under Section 34.
 Section 14: Failure or Impossibility to Act
Termination of Arbitrator's Mandate:
The mandate of an arbitrator terminates if they are unable to perform
duties (de jure or de facto) or if they fail to act without delay.
Court Intervention:
If a dispute arises over the arbitrator’s ability to act, the court can
decide whether to terminate the mandate.
Substitute Arbitrator:
A substitute arbitrator must be appointed, and prior hearings may be
repeated at the tribunal’s discretion. Any previous rulings remain valid
despite the arbitrator’s replacement.
 Section 15: Termination of Mandate and
Substitution of Arbitrator
1. Termination of Mandate:
The mandate of an arbitrator terminates if they withdraw from office for
any reason or by mutual agreement of the parties.
2. Appointment of Substitute Arbitrator:
When an arbitrator’s mandate terminates, a substitute must be appointed
according to the same rules applied to the original appointment.
3. Previous Hearings & Orders:
Previous hearings may be repeated at the tribunal's discretion, and prior
orders or rulings remain valid, even after the replacement of the arbitrator,
unless the parties agree otherwise.
Thank You for
Listening

Ms. Kriti Johri