Court Appoints Independent Arbitrator Following Failure of Contractual Appointment Procedure and Dispute over Empanelled Options

The Petitioner, a contractor, was awarded a works contract for the "Renovation of common toilet in Nursing Home at Dr. Ram Manohar Lohia Hospital" by the Respondent (CPWD) via Letter of Acceptance dated 17.08.2024

The contract was governed by General Conditions of Contract (GCC) containing an arbitration clause (Clause 25.2)

Following a show-cause notice and subsequent termination of the contract on 26.07.2025, the Petitioner invoked conciliation, which failed on 21.12.2025

The Petitioner thereafter invoked arbitration on 11.03.2026

While the Respondent suggested five empanelled arbitrators, the Petitioner rejected the names and approached the High Court seeking the appointment of an independent sole arbitrator

1. Whether a Sole Arbitrator should be appointed under Section 11(6) of the Arbitration and Conciliation Act, 1996, given the non-agreement between parties on the Respondent's panel of arbitrators.

Section 11(6) of the Arbitration and Conciliation Act, 1996, regarding the court's power to appoint an arbitrator when the parties' agreed procedure fails

The principle that the scope of examination under Section 11 is confined solely to the existence of an arbitration agreement, as established in SBI General Insurance Co. Ltd. v. Krish Spinning (2024) and In re, Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899 (2024)

Section 12 requirements concerning the neutrality and disclosure obligations of the arbitrator

The Court found that the existence of the arbitration agreement was undisputed by both parties

Applying recent Supreme Court precedents, the Court noted that its primary duty under Section 11 was to verify the existence of the arbitration clause rather than delve into the merits of the dispute

Since the Petitioner did not agree to the names proposed from the Respondent's empanelled list, and the conciliation mechanism had already failed, the Court determined it necessary to exercise its power to ensure the appointment of an independent arbitrator to adjudicate the monetary claims arising from the allegedly arbitrary termination

The Court directed that the arbitration be conducted under the aegis of the Delhi International Arbitration Centre (DIAC)

The Court clarified that the Respondent maintains the liberty to raise preliminary objections regarding arbitrability or jurisdiction before the Arbitrator

The delay of 18 days in re-filing the petition was condoned, and the petition was disposed of in these terms