In Antrix Corp. Ltd. v Devas Multimedia P. Ltd.5, the Supreme Court of India held that once a party commences arbitration proceedings under a particular set of rules (in this case the ICC Rules) and has appointed an arbitrator, an application to appoint an arbitrator under section 11 of the Indian Arbitration Act is not maintainable. The decision forms part of the recent growing pro-arbitration stance adopted by the Indian courts.
Facts of the Case
Antrix Corporation Limited (“Antrix”) and Devas Multimedia P. Ltd. (“Devas”) entered into a lease agreement (the “Agreement”). The parties were involved in a dispute arising from Antrix's termination of the Agreement. The Agreement provided that disputes were to first be referred to the senior management of both the parties, failing which it was to be referred to arbitration. Antrix attempted to resolve the dispute through senior management and when these attempts failed, Devas commenced arbitration proceedings under the ICC Rules and nominated an arbitrator, who was duly appointed by the ICC.
Antrix objected to the constitution of the arbitral tribunal by the ICC Court, stating that this amounted to a usurpation of the exclusive jurisdiction of the Chief Justice under Section 11 of the Indian Arbitration Act, which affords discretion to the Chief Justice of the Supreme Court to make orders relating to disputes in the appointment procedure. It claimed that although the Agreement stated that arbitration proceedings were to be held in accordance with the ICC or UNCITRAL Rules, there was no reference to the ICC Rules or the ICC Court in the context of the constitution of the Arbitral Tribunal. Thus, the Tribunal must be constituted before an application of either the ICC or UNCITRAL Rules, and it was not open to Devas to unilaterally decide which of the abovementioned rules were to be followed.
Devas contended that what was intended by the Agreement was the formation of an ad hoc Tribunal, which would have to follow the procedure prescribed by the rules chosen to govern the arbitration. It argued that the Chief Justice was not entitled to question the validity of the appointment of the Arbitral Tribunal, and any objection as to whether the Tribunal had been properly constituted would have to be raised before the Tribunal itself.
The question before the court was whether, when one of the parties has initiated arbitration under the ICC and has sought the ICC Court's help in appointing an arbitrator and an arbitrator has already been appointed pursuant to it, the other party to the dispute would be entitled to request the Chief Justice to intervene in the appointment procedure under Section 11(6) of the Indian Arbitration Act.
Decision of the Court
The Supreme Court held that once the Agreement had been invoked by Devas and its nominee arbitrator appointed by the ICC, it could not have been invoked for a second time by Antrix, which was fully aware of the appointment made by the ICC at Devas's behest. The Supreme Court held that the settled position of law is that where an arbitrator has already been appointed and intimation of the appointment has been conveyed to the other party, a separate application for the appointment of an arbitrator is not maintainable. If this was allowed and the appointment of an arbitrator could be questioned in a subsequent proceeding initiated for the appointment of an arbitrator, it would lead to “an anomalous state of affairs”. The Court was reluctant to find that the Chief Justice could, in a proceeding under Section 11 of the Indian Arbitration Act, replace one arbitrator already appointed in the exercise of the Agreement, and noted that the law is well settled on this point. Instead, Antrix should have challenged the appointment of the arbitrator by Devas by way of a petition under other Sections of the Indian Arbitration Act (Sections 13, 34).
On the facts of the case, the Supreme Court found that Devas was entitled under the Agreement to invoke the ICC Rules for the conduct of the arbitration proceedings, upon which a challenge may be brought in appropriate proceedings but not by way of a Section 11(6) application. Although Antrix failed in its petition, it was not prevented from seeking recourse via other provisions (Sections 13, 34) for appropriate relief.
This decision, although in the context of a domestic arbitration (the seat of the arbitration was New Delhi, India), is encouraging as it is another instance of the Supreme Court refraining from interfering in arbitral processes that are already underway. Whilst the Court did note that a challenge could still be made before the Indian courts via other channels, it does at least require parties in these circumstances to acknowledge the existence of the arbitral tribunal.