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The procedure for appointment of an Arbitrator is separate from the agreement to refer disputes to arbitration, even if these are contained in the same arbitration clause – S K Engineering and Construction Company India v. Bharat Heavy Electricals Ltd. – Delhi High Court

In this case, arbitration clause contains that it is also a term of this contract that no person other than a person appointed by such Head TBG as aforesaid should act as arbitrator and if for any reason that is not possible the matter is not to be referred to arbitration at all.

Hon’ble High Court refers various judgments and held that:
(i) the procedure for appointment of an arbitrator is clearly distinct and separable from the agreement to refer disputes to arbitration, even if these are contained in the same arbitration clause.
(ii) The law is also well settled that while construing an arbitration agreement, the Court must lean in favor of giving effect to the arbitration agreement between the parties.
(iii) The arbitration clause insofar as it stipulates that only the respondent can act or appoint an arbitrator must severed from rest of the arbitration clause.
(iv) The later part of the arbitration clause, that if for any reason the person appointed by the respondent cannot act as arbitrator the matter is not to be referred to arbitration at all, must also be severed, as the same is also a part of the same stipulation, which is in utter contravention of TRF Ltd. and Perkins judgments.

The procedure for appointment of an Arbitrator is separate from the agreement to refer disputes to arbitration, even if these are contained in the same arbitration clause – S K Engineering and Construction Company India v. Bharat Heavy Electricals Ltd. – Delhi High Court Read Post »

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