Delhi High Court HbhlVks (J.V.) vs Union Of India (Uoi) And Ors. [Along With ... on 31 August, 2006 Equivalent citations: 2007(1)ARBLR252(DELHI) JUDGMENT Swatanter Kumar, J. 1. Making arbitration more responsive to contemporary requirements and to ensure that economic reforms become fully effective, with these two objects in mind, the Law Commission of India recommended radical changes in the then existing arbitration law. This resulted in the enactment of the Arbitration and Conciliation Act, 1996. The new law provides for definite and effective measures for settlement of both domestic and international commercial disputes, through the process of arbitration. The United Nations Commission on International Trade Law adopted model law and rules which were intended to deal with international commercial arbitration and conciliation. The law relating to domestic arbitration, thus, was also required to be in comity to this concept. One of the basic objects of 1996 Act was to make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of specific arbitration. While reducing the court intervention during the pendency of arbitral tribunal proceedings, the object sought to be achieved by enactment of new law was expeditious finalization of disputes through the forum of arbitration. 2. Judicial interpretation of Statutes is a known process for development of law. Legislature may amend the laws while the judicial pronouncements may fill the lacunas left by the legislature, which may be necessary for achieving the object of the Statute. Various provisions of 1996 Act have been subjected to judicial interpretation which clarified certain aspects of the Act, but still the questions relating to ambit and scope of provisions of Section 11(6) of the Act needs to be settled by the court more authoritatively in view of the fact that by interpretative process, various High Courts as well as different Benches of this Court have pronounced divergently. The statutory procedure for appointment of Arbitral Tribunal in terms of the Act has to be understood in its clear terms and normally would not be controlled by the parties. The failure by any of the parties to the agreement in relation to appointment or its procedure, the Statute gives right to the party to make an application to the court for that purpose. The arbitration agreement may provide for appointment of an Arbitral Tribunal by consent, power of appointment may be exercisable by a third party known as 'Appointing Authority' and in the event this does not bring result, then by making an application for appointment of an Arbitral Tribunal to the court of competent jurisdiction in accordance with the provisions of the Act. The time may be specified in the agreement and it is of greater essence when it is spelled out in the provisions of law itself. The arbitration agreement often specifies a time within which an Arbitrator must be appointed failing which a party may lose the right to appoint one. In absence of the agreement the time limit is provided in the Statute. (Russell on Arbitration 20th Edition). The extent of loss of right and consequence of default could be provided contractually or statutorily. Loss of a right contractually stated may vary but loss of right in terms of Statute would be uniform. 3. The provisions of Section 11 of the Act has been subject matter of some legal controversy in the recent past. Its various Subsections operate in different situations with somewhat different consequences. On failure of a party to act for appointment of an Arbitrator as per the agreed procedure, certain consequences would follow in law. The extent and scope of such ramifications have to be examined in view of the underlining object of the relevant legal provisions while keeping in mind the facts and circumstances of the case. Courts have taken divergent views in this regard which persuaded one of us (Mr. Swatanter Kumar, J.) to refer the matter to a larger Bench for setting at rest the legal controversies arising in the present case. The order of reference reads as under: 1. This order will dispose of the above three cases as common question of law falls for consideration in all these cases based on somewhat similar facts. For the purposes of convenience, it will be sufficient to make the reference only to the facts giving rise to the filing of Arb.P.217/2005 (HBHLVKS (J.V.) v. The General Manager and Anr.). 2. The petitioner which is a registered partnership concern through its registered partner Sh. B.K. Bassi has filed the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 praying for a direction to the respondents to file the original arbitration agreement in Court and for appointment of an independent sole arbitrator for adjudication of the disputes/claims detailed in para 7(xxi