The Court while exercising its power under Section 11 of the Act, cannot recast the terms of the Contract and direct the parties to go for a composite arbitration contrary to the procedure prescribed under the arbitration clause provided in distinct arbitration agreements. The overlapping of the issues does not mean that the arbitration proceedings under the two respective contracts cannot commence and continue independently. Fundamental feature of an arbitration agreement is that there is an understanding between the parties to adopt alternate mechanism for the adjudication of the future disputes that arise between them. The law does not prescribe any standard form of arbitration agreement and the parties are free to agree upon a procedure and designate the private forum where the parties would like to go in case the disputes and differences arise between them. Thus, there is to be consensus ad-idem between the parties regarding the choice of the forum. The Supreme Court in certain judgments, has held that in certain exceptional circumstances the Court has a power to make an appointment of the Arbitrator, notwithstanding the choice of the specified forum agreed between the parties. However, at the first instance, the effort of the Court would be to ensure that the parties adhere to the choice of the Arbitrator or to the mechanism for constituting the Arbitral Tribunal as envisaged by the Arbitration Agreement. It is also noteworthy that, the Supreme Court in Indian Oil Corporation Ltd. v. Raja Transport Pvt. Ltd., (2009) 8 SCC 520, Union of India v. Singh Builders Syndicate, (2009) 4 SCC 523, Northern Eastern Railway v. Triple Engineering, (2014) 9 SCC 288 and Union of India v. BESCO, (2017) 14 SCC 187 : AIR 2017 SC 1628, has expressed the opinion that where an application under Section 11(6) of the Act is filed, the procedure for appointment of an arbitrator prescribed in the agreement, be given effect to and the Court ought not to appoint an independent arbitrator without resorting to the inbuilt mechanism as agreed between the parties. Parties were conscious of the terms of the agreement and they willingly and consciously agreed for the arbitral procedure envisaged under the agreement without any reservation. Petitioner is now suggesting that the agreed choice of forum should be ignored and that part of the Agreements should be severed and further Respondent should tow it's line and agree to the Arbitral Tribunal contrary to what has been provided in the Contracts. This cannot be permitted and thus the relief claimed in the present petition for appointment of a common arbitrator cannot be granted. There is no merit in the present petition and the same is dismissed. No order as to costs.
In the High Court of Delhi at New Delhi
(Before Sanjeev Narula, J.)
Libra Automotives Private Limited v. BMW India Private Limited and Another
Arb.P. 163/2019
Decided on July 9, 2019,
Citation: 2019 SCC OnLine Del 9073
