Court Appoints Sole Arbitrator by Consent and Converts Section 9 Petition into Section 17 Application

The Petitioner filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim relief to restrain the Respondent from acting upon a termination letter dated 23.09.2025 and to preserve rights under a Collaboration Agreement dated 01.06.2017

During the proceedings, both parties reached a consensus (ad idem) to refer their disputes—valued at approximately Rs. 2.5 crores—to arbitration rather than adjudicating the Section 9 petition on merits

The parties further agreed to waive formal requirements for notice under Section 21 and the necessity of filing a Section 11 petition

1. Whether the Court should appoint a Sole Arbitrator and refer the pending Section 9 petition to the Tribunal as an application under Section 17, given the mutual consent of the parties?

The Court applied the Arbitration and Conciliation Act, 1996, specifically Section 9 regarding interim measures by the Court and Section 17 regarding interim measures by the Arbitral Tribunal

It also considered the Fourth Schedule of the Act concerning the fee structure for arbitrators

The ruling follows the principle of party autonomy and judicial economy, where courts may appoint an arbitrator upon mutual consent while waiving procedural formalities under Section 11 and Section 21 to prevent undue delay in commencing arbitral proceedings

The Court noted the existence of a valid arbitration clause (Clause 19) and a jurisdiction clause (Clause 20) in the Collaboration Agreement, which designated New Delhi as the seat of arbitration

Since both parties consented to bypass the formal Section 11 process and requested the appointment of an arbitrator, the Court exercised its jurisdiction to facilitate the reference

To ensure the efficiency of the legal process, the Court converted the pending Section 9 petition (for interim relief) into a Section 17 application to be decided by the newly appointed arbitrator, thereby ensuring that the merits of the interim dispute are resolved within the arbitral forum rather than the court

The petition under Section 9 was disposed of with the direction that it be treated as an application under Section 17 of the Act before the Arbitrator

The Arbitrator is required to provide disclosures under Section 12(2) within a week, and fees are to be governed by the Fourth Schedule, shared equally by the parties

All rights and jurisdictional objections of the parties remain open for adjudication by the Tribunal