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Case Study on Alternate Dispute Resolution

Ador Samia Private Limited Vs. Peekay Holdings Limited & Ors. AIR 1999 SC 3246

Submitted to- Prof. Surendra Kumar Patri (Sr. Adv. Supreme Court)

Submitted byAnoop Mishra (884019)

INDEX

1. Facts of the case.................................................................................3 2. Issues.................................................................................................3 3. Provisions dealt in the case...............................................................3 4. Judgement.........................................................................................4

Ador Samia Private Limited vs. Peekay Holdings Limited & Ors. AIR 1999 SC 3246
Facts of the Case- In this case the Special Leave Petition under Article 136 of Constitution of India is moved by the petitioner challenging an order of the learned Chief Justice of the High Court of Bombay in Arbitration Petition No. 288 of 1998 moved before him under Section 11 Sub-section (6) of the Arbitration and Conciliation Act, 1996. Issues- Whether the appeal under Article 136 of Constitution of India and Section 11 (6) of Arbitration and Conciliation Act, 1996 is maintainable against Order appointing arbitrator passed by chief Justice of High Court. Provisions dealt in the case- Article 136 of Constitution of India 1949- Special leave to appeal by the Supreme Court-(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India. (2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order passed or made by any court or tribunal constituted by or under any law relating to the Armed Forces. Section 4 of Arbitration and Conciliation Act, 1996- Waiver of right to object. - A party who knows that(a) any provision of this Part from which the parties may derogate, or (b) any requirement under the arbitration agreement, has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object. Section 11 (6) of Arbitration and Conciliation Act, 1996- Where, under an appointment procedure agreed upon by the parties,(a) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or

(c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment. Judgement- Under the 1996 Act, appointment of arbitrator/s is made as per the provision of Section 11 which does not require the court to pass a judicial order appointing arbitrator/s. The High Court was, therefore, wrong in referring to these provisions of the 1940 Act while interpreting Section 4 of the new Act. It is clear that before an appeal can be entertained in this Court under Article 136, two conditions have to be satisfied; the order impugned must be an order of a judicial or quasijudicial character and should not be purely an administrative or executive order; and the said order should have been passed either by a Court or a Tribunal in the territory of India. In view of this settled legal position therefore, there is no escape from the conclusion that orders passed by the learned Chief Justice under Section 11(6) of the Act being of an administrative nature cannot be subjected to any challenge directly under Article 136 of the Constitution of India. Only on this short ground and without expressing any opinion on the merits of the controversy between the parties this Special Leave Petition is disposed of as not maintainable.