Court appointed a retired High Court judge as sole arbitrator based on parties’ consensus.

The applicant, a manpower-supply and asset-management agency, was empanelled by the respondent, a Chhattisgarh Government undertaking, to provide manpower for retail liquor shops and establishments across the State.

The applicant claimed that disputes had arisen under the tenders, agreement, work orders, and extensions issued between 2018 and 2023–24, including alleged non-payment of overtime wages at double the ordinary rate, wages for weekly holidays, wrongful deductions of handling charges and security deposit, and arbitrary penalties.

The contracts contained an arbitration clause providing for reference to the sole arbitration of the Secretary, Excise, Government of Chhattisgarh, or a person appointed by him.

The applicant invoked arbitration by notice under Section 21 of the Arbitration and Conciliation Act, 1996, received by the respondent on 1 and 4 June 2026, but the respondent neither appointed an arbitrator nor responded within the prescribed period.

The applicant therefore filed an application under Section 11(6) of the Act seeking appointment of an independent sole arbitrator.

During the hearing, the respondent stated that it had no objection to appointment of an arbitrator, and both parties agreed to the appointment of a retired Judge of the High Court.

Whether the requirements for appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 were satisfied upon the respondent’s failure to appoint an arbitrator after receipt of the arbitration notice.

Whether, in light of the arbitration clause and the parties’ consensus, an independent sole arbitrator could be appointed by the High Court to adjudicate the disputes arising from the contracts.

The Court applied Section 11(6) of the Arbitration and Conciliation Act, 1996, which empowers the competent court to appoint an arbitrator where the agreed appointment procedure fails.

Section 21 of the Act governs commencement of arbitral proceedings through a request for reference to arbitration, while Section 11(4)(a) prescribes the relevant period for appointment in the circumstances stated in the application.

The Court also applied Clause 14 of the contracts, which constituted a valid arbitration agreement and provided for reference of disputes to a sole arbitrator in accordance with the Act.

The applicant relied upon Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV), 2024 SCC OnLine SC 3219, concerning appointment of an independent arbitrator where a unilateral appointment mechanism is legally impermissible; however, the order ultimately proceeded primarily on the parties’ consent.

The Court found that the contracts contained a valid and subsisting arbitration agreement and that the applicant had invoked the clause by serving a notice under Section 21.

The respondent failed to appoint an arbitrator or otherwise respond within the stipulated period, thereby justifying recourse to the Court under Section 11(6).

Although Clause 14 contemplated appointment through the Secretary, Excise, the respondent expressly raised no objection to the Court appointing an arbitrator.

Upon inquiry, both parties agreed that a retired Judge of the High Court could be appointed, and specifically proposed Hon’ble Mr. Justice Sanjay Agrawal.

On that consensual basis, the Court appointed him as sole arbitrator, leaving the merits, quantification, limitation, and other defences to the arbitral tribunal.

Hon’ble Mr. Justice Sanjay Agrawal, a retired Judge of the High Court of Chhattisgarh, was appointed as the sole arbitrator to resolve the disputes between the parties.

The Registry was directed to communicate the order to the arbitrator, and the arbitrator’s remuneration was left to be settled by mutual consent of the parties.