Chhattisgarh HC Rejects Cooperative Society’s Arbitrator Plea, Says Collector-Commissioner Clause Is Not Arbitration Agreement

The applicant sought appointment of a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, relying on Clause 13 of an agreement dated 27 November 2025.

Clause 13 provided for disputes to be decided by the District Collector, with an appeal to the Divisional Commissioner.

The respondents opposed the application, submitting that the applicant had not first pursued the remedy before the Collector.

The applicant stated that it was willing to pursue the remedies under Clause 13.

Section 11(6) of the Arbitration and Conciliation Act, 1996, provides for court intervention in the appointment of an arbitrator in the circumstances prescribed by that provision.

Relying on M/s. Bharat Udyog Ltd. v. Ambernath Municipal Council through Commissioner & Another, the Court applied the principle that a clause providing for a Collector’s decision, with appeals to public authorities, is not an arbitration agreement merely because it addresses disputes or makes the Collector’s decision final.

The Supreme Court had held that the clause before it was not an arbitration agreement.

Clause 13 assigned the decision of disputes to the District Collector and provided an appeal to the Divisional Commissioner; it did not provide for reference of disputes to arbitration.

Applying the reasoning in Bharat Udyog, the Court concluded that Clause 13 was not an arbitration clause and therefore could not support an appointment under Section 11(6).

The applicant’s willingness to use the contractual remedy, and the respondents’ submission that the Collector had not yet been approached, supported leaving the applicant to pursue that remedy.

It disposed of the application, observing that the applicant could, if so advised, seek redress under Clause 13 of the agreement.