Court Appoints Sole Arbitrator by Consent Under Section 9 Petition for Determination of Contractual Disputes

The Petitioner, NSSL Pvt. Ltd., filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim reliefs against the Respondent, Indian Oil Corporation Ltd. (IOCL).

The reliefs sought included staying a Termination Letter dated 17.12.2024, restraining the Respondent from executing a Purchase Order in favor of a third party (Microfinish Valves Pvt. Ltd.), and staying a follow-up letter dated 13.02.2025.

During the proceedings, the Petitioner requested that the disputes be referred to arbitration.

The Respondent consented to the appointment of a Sole Arbitrator to resolve the disputes arising out of the National e-Tender dated 30.08.2022.

Whether the dispute between the parties, involving a claim of approximately ₹10 crore, should be referred to a Sole Arbitrator despite a contractual clause providing for a three-member tribunal.

Whether the court should grant the interim reliefs sought under Section 9 or refer the parties to arbitration in light of a Section 21 notice already being issued.

The court applied Section 9 of the Arbitration and Conciliation Act, 1996, which pertains to interim measures by the Court.

It further relied on Section 11 principles regarding the appointment of arbitrators by mutual consent, notwithstanding Clause 36.1.1 of the General Conditions of Purchase which originally contemplated an Arbitral Tribunal of three arbitrators.

The court also noted the necessity of disclosures under Section 12(2) of the Act regarding the independence and impartiality of the arbitrator.

The application of the Fourth Schedule of the Act for the determination of arbitral fees.

The court noted that both parties reached a consensus to bypass the contractual requirement for a three-member tribunal in favor of a Sole Arbitrator.

Since the Petitioner had already issued a notice invoking arbitration under Section 21 of the Act on 08.04.2025, the court found it appropriate to refer the matter to arbitration for a final resolution on merits.

The court did not adjudicate on the merits of the interim reliefs sought (the stay on termination and purchase orders), instead keeping all rights and contentions open for the arbitrator to decide, thereby prioritizing the arbitral process over judicial intervention in the Section 9 petition.

The arbitrator is directed to provide disclosures under Section 12(2) within one week.

Fees are to be governed by the Fourth Schedule of the Act, shared equally by the parties.

The Court clarified that it expressed no opinion on the merits of the controversy, leaving all claims and counter-claims to be decided by the arbitrator.