Sole Arbitrator Appointed Pursuant to Section 11(5) Following Failure to Agree on Appointment within Statutory Period

The applicant and respondent entered into a partnership firm, "M/s. New Look Man Wear," via a partnership deed dated October 1, 2023.

Due to operational disputes, the applicant withdrew from the firm on February 13, 2024, executing an affidavit based on the respondent’s assurance that her invested capital of ₹2,48,000 would be returned within six months.

Following the respondent's failure to repay the amount, the applicant issued a demand notice on November 13, 2024, and subsequently invoked Clause-21 (the arbitration clause) of the Partnership Deed through notices dated April 4, 2025, and May 15, 2025.

The respondent failed to respond or consent to an arbitrator within the statutory 30-day period, leading the applicant to file this request under Section 11(5) of the Arbitration and Conciliation Act, 1996.

1. Whether a Sole Arbitrator should be appointed by the Court due to the respondent's failure to act on the notice invoking the arbitration clause under the Partnership Deed.

The court applied Section 11(5) of the Arbitration and Conciliation Act, 1996, which empowers the Court to appoint an arbitrator when the parties fail to agree on a procedure or a specific person within 30 days of a request.

The decision also rests on the principle of party autonomy and consensus ad idem during judicial proceedings, where parties may mutually agree upon a specific arbitrator during the hearing to resolve their disputes.

The Court noted that the existence of the partnership deed and the arbitration clause (Clause-21) was not in dispute.

While the respondent initially opposed the application in their written return, they later conceded during the hearing, expressing "no objection" to the appointment of an arbitrator by the Court.

The Court found that the applicant had fulfilled the procedural requirements of Section 11(5) by issuing multiple notices which went unheeded.

During the proceedings, the Court queried both parties regarding a common appointee; both sets of counsel reached a consensus on the name of a retired District Judge to act as the Sole Arbitrator.

The Court directed the Registry to communicate the order to the appointed arbitrator and ordered that his remuneration be settled through the mutual consent of the parties.