Court appointed a retired High Court judge as sole arbitrator for the contractual vehicle-rent dispute.

The applicant provided vehicles and transport-related services to Nuvoco Vistas Corporation Limited pursuant to work orders dated 31 March 2022, covering the relevant period from 26 January 2022 to 31 January 2024. He claimed unpaid vehicle-rental and transport bills amounting to ₹11,86,427.27.

The respondent-company withheld payment on the ground that one of the vehicles was involved in an accident causing the death of a child and injuries to two others, for which the company allegedly incurred approximately ₹8,81,963 towards compensation and medical expenses.

The applicant disputed liability for those expenses and demanded release of the outstanding rent through legal notices. He had earlier filed W.P.(C) No. 740 of 2023 for release of the amount, which was withdrawn with liberty on 4 October 2024.

Since the parties’ agreement contemplated resolution of disputes through representatives and, failing settlement, arbitration, the applicant filed the present application under Sections 11(6) read with 15 of the Arbitration and Conciliation Act, 1996.

Although notice was served through paper publication, the non-applicants neither appeared nor opposed the application.

Whether the applicant had established the existence of a contractual arbitration mechanism and a dispute requiring reference to arbitration under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Whether, in the absence of appearance or opposition by the non-applicants despite service, a sole arbitrator should be appointed to adjudicate the parties’ disputes concerning unpaid vehicle-rental dues and accident-related liability.

The Court applied Sections 11(6) and 15 of the Arbitration and Conciliation Act, 1996, concerning court intervention for appointment of an arbitrator and appointment or substitution of an arbitrator where the contractual mechanism has failed.

The governing principle was that, where the parties have entered into an agreement containing an arbitration mechanism, a dispute has arisen within the contractual relationship, and the agreed procedure has failed or has not been acted upon, the Court may appoint a suitable sole arbitrator.

The Court also considered due service of notice and the respondents’ failure to appear or contest the arbitration request.

The Court found that the parties were in a valid contractual relationship under the work orders and the underlying agreement, and that a live dispute existed regarding the applicant’s unpaid transport bills and the respondent-company’s claim for adjustment or recovery of accident-related expenses.

The applicant asserted that he had followed the agreed procedure by approaching the respondents and seeking resolution through their representatives, but the dispute remained unresolved.

Since the respondents were duly served, including through publication in two newspapers with circulation in Janjgir-Champa, and nevertheless neither appeared nor opposed the application, the Court treated service as complete and proceeded in their absence.

In these circumstances, the Court exercised its appointment jurisdiction and accepted the applicant’s proposal for appointment of a retired Judge of the High Court as sole arbitrator.

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