Section 11 of ACA : Section 11: Appointment Of Arbitrators

Explanation using Example

Imagine a scenario where a U.S. based company, 'TechGlobal Inc.', enters into a contract with an Indian company, 'InnovateNow Pvt. Ltd.', to develop a software product. The contract contains an arbitration clause that specifies the use of arbitration for resolving any disputes under the contract. The clause states that there will be three arbitrators: one appointed by each party and the third, a presiding arbitrator, to be appointed by the two chosen arbitrators.

Disagreement arises over the delivery of the software, and both parties decide to invoke arbitration. 'TechGlobal Inc.' appoints its arbitrator within the agreed timeframe, but 'InnovateNow Pvt. Ltd.' fails to appoint its arbitrator. After 30 days, 'TechGlobal Inc.' requests the Supreme Court of India to appoint an arbitrator on behalf of 'InnovateNow Pvt. Ltd.' as per Section 11(4) of The Arbitration and Conciliation Act, 1996. The Supreme Court, after receiving a disclosure from the prospective arbitrator as per Section 11(8), appoints a suitable arbitrator considering the need for an independent and impartial individual.

Once the two arbitrators are appointed, they cannot agree on a third presiding arbitrator within the next 30 days. Consequently, 'TechGlobal Inc.' approaches the Supreme Court again, and the Court appoints a presiding arbitrator who is of a nationality other than those of the parties involved, as per Section 11(9), since it is an international commercial arbitration and the parties are of different nationalities.

The arbitration can now proceed with a complete panel of arbitrators, thanks to the application of Section 11 of The Arbitration and Conciliation Act, 1996.