Appointment of nominee arbitrators for a three-member tribunal upon failure to respond to arbitration invocation.

The Petitioner, a Joint Venture, entered into a Contract Agreement dated 06.03.2019 with the Respondent (JSCL) to provide Project Management Consultancy services for the "Smart City Mission" in Jammu.

Following the completion of services and various extensions, a dispute arose regarding outstanding payments totaling ₹28,86,15,134/- and the release of a Performance Bank Guarantee (PBG).

The Petitioner invoked the arbitration clause via notice dated 22.10.2024, nominating a former Supreme Court judge as their arbitrator.

The Respondent failed to nominate a counter-arbitrator or respond to the notice, leading the Petitioner to approach the High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996.

The Respondent argued that no arbitral dispute existed and the claims were untenable.

1. Whether a valid arbitration agreement exists and was properly invoked by the Petitioner to warrant the appointment of an arbitrator under Section 11(6) of the Act.

2. Whether the court should appoint nominee arbitrators for both parties in light of the failure of the contractual appointment machinery.

The court applied Section 11(6) of the Arbitration and Conciliation Act, 1996, which empowers the Chief Justice or their designate to appoint an arbitrator when a party fails to act as required under an appointment procedure.

The court also relied on the specific "Settlement of Disputes" mechanism under Clause 8.1 (Amicable Settlement) and Clause 8.2 (Arbitration) of the General Conditions of Contract, which stipulates a three-member Arbitral Tribunal.

The Court noted that the existence of the arbitration clause (Clause 8.2) was conceded by the Respondent’s counsel.

While the Respondent challenged the maintainability of the claims, the Court found that such "permissible pleas and objections" are matters to be decided by the Arbitral Tribunal rather than at the pre-referral stage under Section 11.

Since the Respondent had failed to nominate an arbitrator within the statutory period following the invocation notice dated 22.10.2024, the Court's jurisdiction to appoint was triggered.

To ensure a fair and neutral tribunal, the Court took note of the parties' subsequent suggestions for nominees during the hearing to fulfill the requirements of Clause 8.2.

These two arbitrators are directed to appoint a third Presiding Arbitrator.

The Arbitral Tribunal is ordered to proceed in accordance with the Act and make an award within the prescribed timeline, while the Respondent remains at liberty to raise all jurisdictional and factual objections before the Tribunal.