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Arbitration Clause – Validity of Even Number of Arbitrators

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๐•๐š๐ฅ๐ข๐๐ข๐ญ๐ฒ ๐จ๐Ÿ ๐š๐ง ๐€๐ซ๐›๐ข๐ญ๐ซ๐š๐ญ๐ข๐จ๐ง ๐‚๐ฅ๐š๐ฎ๐ฌ๐ž ๐ฌ๐ญ๐ข๐ฉ๐ฎ๐ฅ๐š๐ญ๐ข๐ง๐  ๐ซ๐ž๐Ÿ๐ž๐ซ๐ซ๐š๐ฅ ๐จ๐Ÿ ๐๐ข๐ฌ๐ฉ๐ฎ๐ญ๐ž๐ฌ ๐ญ๐จ ๐š๐ง ๐ž๐ฏ๐ž๐ง ๐ง๐ฎ๐ฆ๐›๐ž๐ซ ๐จ๐Ÿ ๐€๐ซ๐›๐ข๐ญ๐ซ๐š๐ญ๐จ๐ซ๐ฌ (Delhi High Court)

M/s. Talbros Sealing Materials Pvt. Ltd. Vs M/s. Slach Hydratecs Equipments Pvt. Ltd (May 2024)

The parties to dispute entered into a contract for the supply of machinery by the Respondent company. Upon emergence of dispute, the Petitioner filed section 11 application seeking for appointment of arbitrator.

The dispute resolution clause as follows:
โ€œClause 8 Arbitration Clause –
๐‘‡โ„Ž๐‘’ ๐‘œ๐‘Ÿ๐‘‘๐‘’๐‘Ÿ ๐‘๐‘™๐‘Ž๐‘๐‘’๐‘‘ ๐‘œ๐‘› ๐‘ข๐‘  ๐‘คโ„Ž๐‘’๐‘กโ„Ž๐‘’๐‘Ÿ ๐‘‘๐‘–๐‘Ÿ๐‘’๐‘๐‘ก๐‘™๐‘ฆ ๐‘œ๐‘Ÿ ๐‘กโ„Ž๐‘Ÿ๐‘œ๐‘ข๐‘”โ„Ž ๐‘œ๐‘ข๐‘Ÿ ๐‘๐‘Ÿ๐‘Ž๐‘›๐‘โ„Ž ๐‘œ๐‘“๐‘“๐‘–๐‘๐‘’๐‘  ๐‘ โ„Ž๐‘Ž๐‘™๐‘™ ๐‘–๐‘› ๐‘Ž๐‘™๐‘™ ๐‘Ÿ๐‘’๐‘ ๐‘๐‘’๐‘๐‘ก ๐‘๐‘’ ๐‘๐‘œ๐‘›๐‘ ๐‘–๐‘‘๐‘’๐‘Ÿ๐‘’๐‘‘ ๐‘Ž๐‘  ๐‘Ž๐‘› ๐ผ๐‘›๐‘‘๐‘–๐‘Ž๐‘› ๐ถ๐‘œ๐‘›๐‘ก๐‘Ÿ๐‘Ž๐‘๐‘ก ๐‘Ž๐‘›๐‘‘ ๐‘Ž๐‘™๐‘™ ๐‘‘๐‘–๐‘ ๐‘๐‘ข๐‘ก๐‘’๐‘  ๐‘Ž๐‘›๐‘‘ ๐‘‘๐‘–๐‘“๐‘“๐‘’๐‘Ÿ๐‘’๐‘›๐‘๐‘’๐‘  ๐‘Ž๐‘Ÿ๐‘–๐‘ ๐‘–๐‘›๐‘” ๐‘œ๐‘ข๐‘ก ๐‘œ๐‘“ ๐‘กโ„Ž๐‘’ ๐‘๐‘œ๐‘›๐‘ก๐‘Ÿ๐‘Ž๐‘๐‘ก ๐‘œ๐‘Ÿ ๐‘ก๐‘œ๐‘ข๐‘โ„Ž๐‘–๐‘›๐‘” ๐‘กโ„Ž๐‘’ ๐‘ ๐‘Ž๐‘š๐‘’ ๐‘๐‘’ ๐‘Ÿ๐‘’๐‘“๐‘’๐‘Ÿ๐‘Ÿ๐‘’๐‘‘ ๐‘ก๐‘œ ๐‘ก๐‘ค๐‘œ ๐‘Ž๐‘Ÿ๐‘๐‘–๐‘ก๐‘Ÿ๐‘Ž๐‘ก๐‘œ๐‘Ÿ๐‘  ๐‘œ๐‘›๐‘’ ๐‘ก๐‘œ ๐‘๐‘’ ๐‘Ž๐‘๐‘๐‘œ๐‘–๐‘›๐‘ก๐‘’๐‘‘ ๐‘๐‘ฆ ๐‘’๐‘Ž๐‘โ„Ž ๐‘๐‘Ž๐‘Ÿ๐‘ก๐‘ฆ ๐‘“๐‘œ๐‘Ÿ ๐‘กโ„Ž๐‘’ ๐‘‘๐‘’๐‘๐‘–๐‘ ๐‘–๐‘œ๐‘›. ๐‘‡โ„Ž๐‘’ ๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐‘œ๐‘“ ๐ด๐‘Ÿ๐‘๐‘–๐‘ก๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐‘ โ„Ž๐‘Ž๐‘™๐‘™ ๐‘๐‘’ ๐‘Ž๐‘ก ๐ท๐‘’๐‘™โ„Ž๐‘–………….

The Respondent objected to the jurisdiction of Delhi High Court, asserting that both the supply of machinery and the parties were situated in Faridabad. Also, alleged that the Arbitration clause is not a valid one as it envisages reference of disputes to two arbitrators, contrary to the provisions of Arbitration Act.

Pronouncement of the Court :

๐Ÿ‘‰ A perusal of the arbitration clause shows that the parties intended to resolve their through arbitration. Hence the prime facie question to appoint the arbitrator is satisfied.

โœ The Court also with reference to the judgments of Narayan Prasad Lohia vs. Nikunj Kumar Lohia and Others, [(2002) 3 SCC 572] and Sara International Ltd. vs. Arab Shipping Co. (P) Ltd., [2009 SCC OnLine Del 122] ๐™ง๐™š๐™ž๐™ฉ๐™š๐™ง๐™–๐™ฉ๐™š๐™™ ๐™ฉ๐™๐™–๐™ฉ ๐™–๐™ง๐™—๐™ž๐™ฉ๐™ง๐™–๐™ฉ๐™ž๐™ค๐™ฃ ๐™˜๐™ก๐™–๐™ช๐™จ๐™š ๐™ž๐™จ ๐™ฃ๐™ค๐™ฉ ๐™ž๐™ฃ๐™ซ๐™–๐™ก๐™ž๐™™๐™–๐™ฉ๐™š๐™™ ๐™ข๐™š๐™ง๐™š๐™ก๐™ฎ ๐™ค๐™ฃ ๐™ฉ๐™๐™š ๐™œ๐™ง๐™ค๐™ช๐™ฃ๐™™ ๐™ฉ๐™๐™–๐™ฉ ๐™ฉ๐™๐™š ๐™ฃ๐™ช๐™ข๐™—๐™š๐™ง ๐™ค๐™› ๐™–๐™ง๐™—๐™ž๐™ฉ๐™ง๐™–๐™ฉ๐™ค๐™ง๐™จ, ๐™–๐™จ ๐™ฅ๐™š๐™ง ๐™ฉ๐™๐™š ๐™–๐™ง๐™—๐™ž๐™ฉ๐™ง๐™–๐™ฉ๐™ž๐™ค๐™ฃ ๐™˜๐™ก๐™–๐™ช๐™จ๐™š, ๐™ฌ๐™š๐™ง๐™š ๐™–๐™ฃ ๐™š๐™ซ๐™š๐™ฃ ๐™ฃ๐™ช๐™ข๐™—๐™š๐™ง.

Henceforth, the Court allowed the section 11 application by the petitioner and appointed an arbitrator.

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