Does a clause requiring co-arbitrators to jointly appoint the third arbitrator within thirty days become mandatory once that period expires, without the parties themselves approaching ICSID?
Coram: J.K. Maheshwari; Atul S. Chandurkar
No. The clause is enabling, not restrictive; it does not denude the co-arbitrators of their power to appoint the third arbitrator merely because thirty days have passed. That power is lost only if a party actually approaches ICSID and makes a request for such appointment.
Arbitration and Conciliation Act, 1996 — s.4, s.16, s.34, s.37 — Constitution of arbitral tribunal — Enabling clause vs. mandatory appointment — Arbitration and Conciliation Act, 1996 — Contractual clause on appointment of third arbitrator — Enabling, not restrictive — Held: A contractual clause permitting either party to approach ICSID after the co-arbitrators fail to name the third arbitrator within the stipulated period is an enabling provision, not a bar on the co-arbitrators' power. Absent a request by either party to ICSID, the co-arbitrators retain the power to appoint the third arbitrator even after the period expires. (¶30) Arbitration and Conciliation Act, 1996 — s.34, s.37 — Scope of interference — Plausible interpretation not disturbed — Held further: Where the arbitral tribunal has reached a plausible interpretation of the contract, a court under Section 34 or Section 37 cannot substitute its own view merely because another interpretation is possible. Interference remains narrow, and courts must respect arbitral autonomy and ensure minimum judicial interference. (¶36) Arbitration and Conciliation Act, 1996 — s.4 — Conduct short of statutory waiver — Relevant to interpreting the contract — Held further: Even where a timely Section 16 challenge means statutory waiver under Section 4 does not attract, a party's conduct in not objecting through three appointments of the Presiding Arbitrator without any demur remains relevant to how the parties themselves understood the contract. The appeals are dismissed. (¶66, 68)
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