DEROGABILITY OF S.

10

10. Number of arbitrators.-(1) The parties are free to

determine the number of arbitrators, provided that such
number shall not be an even number.
(2) Failing the determination referred to in sub-section (1),
the arbitral tribunal shall consist of a sole arbitrator.1

Wordings of this section suggest that it is a mandatory

provision. Sub-section 1 of section 10 says that the parties are
free to determine the number of arbitrators, but subject to the
condition that such number shall not be an even number.
Does that mean an award passed by an arbitral body
consisting of even number of arbitrators can be challenged
under S.34(2)(a)(v) ?
To answer this, we have to analyse the possibility of
derogation of S.10.

If we allow even number of arbitrators, there is possibility that

there may not be majority constituted at the stage of passing
the final award. This will result in wastage of time, which in
turn, will defeat the very purpose of this Act. This, probably,
was the reason that the legislature thought it fit to provide for
odd number of arbitrators.
1
The Arbitration & Conciliation Act, 1996

7
 But, the counter argument is that, if the majority get
constituted on any issue, then why parties will get the award
set aside? If there would have been a third (or any number of
odd) arbitrator, whether he would disturb the majority? It’s
possible that he could have been dissenting arbitrator. He
would not have disturbed the majority. Also, in S.11, it is not
expressly mentioned that the appointed arbitrators will
appoint the third arbitrator at the beginning of the
proceedings. It means they may call him at a later stage. With
the passage of time they may realise that they may not agree
on a point and majority may not be constituted at a later point
of time, they may appoint the third arbitrator. If they realise
that majority may be constituted, why they should appoint the
third arbitrator. Will it not be wastage of time to set aside the
arbitral award on technical ground that it has been passed by
an arbitral tribunal consisting of even number of arbitrators,
even when the majority formed? It will certainly be a wastage
of time, a violation of basic notion of justice and morality, and
hence, a violation of public policy of India.
It will be far better if we interpret S.10 in the light of
S.11, which give freedom to the parties for the appointment of
arbitrators. Not only it will be a purposive interpretation, but it
will also support the object of the Act, i.e. to allow minimum
court intervention, to strengthen the arbitral tribunal, and to
enhance the party autonomy. If parties agree on even number
of arbitrators, there is no need to set aside the arbitral award
on the technical ground. Let’s not take S.10 as mandatory
provision. Let’s take S.10 as derogable provision.

8
 The Supreme Court in Narayan Prasad Lohia v. Nikunj
Kumar Lohia and others, AIR 2002, SC 1139 with the help of
following 3 grounds held that S.10 is a derogable provision :-

(i) Conjoint reading of S.4. S.10 and S.16.

(ii) Interpreting S.10 in the light of S.11
(iii) Interpretation of S.34(2)(a)(v)

The Court interpreted that if the composition is in

accordance with the agreement of the parties, then it cannot
be challenged and the award cannot be set aside. If it is in
not in accordance with the agreement, then it will be seen
whether it is in accordance of the mandatory provision of
the Act or not. If the composition is not in accordance with
the agreement of the parties, but it is in accordance with the
mandatory provisions of Part – I, then also it cannot be
challenged and the award cannot be set aside.
However, since S.10 is not a mandatory provision (as
held in Narayan Prasad Lohia v. Nikunj Kumar Lohia and
others), an award passed by an arbitral body consisting of
even number of arbitrators cannot be challenged under
S.34(2)(a)(v), if the majority was constituted.

9
 Nature of the order under s.11(6)

Parties have freedom to decide the procedure for the

appointment of arbitrators under S.11(2), but that procedure
is subject to sub-section (6). Whatever procedure will be
laid down, the requirements of sub-section (6) must be
incorporated in that procedure.
In case the number of arbitrators is 3, each party will
appoint its arbitrator, and the appointed arbitrators will
appoint the third arbitrator. But, if one party does not
appoint his arbitrator, or the other party does not appoint
his arbitrator, or the appointed arbitrators do not appoint the
third arbitrator, then either party may request to the High
Court or the Supreme Court, as the case may be, to appoint
the third arbitrator.
In the case of international commercial arbitration,
request should be made to the Supreme Court, and in case
of domestic arbitration, request should be made to the
concerned High Court. The decision of the Supreme Court,
or as the case may be, the High Court shall be final in
S.11(7).
Now, the question is, what is the nature of the order
passed by the Court under this Section?

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 Konkan Railway Corporation Ltd. v. M/s. Mehul
Construction Co., AIR 2000 SC 28212

The Supreme Court held that Section 11(6) aims at

removing any dead-lock or undue delay in the process of
appointment of arbitrator. Therefore, it is reasonable to hold
that while discharging the functions under S.11(6), the
Chief Justice or his nominee will be acting in his
administrative capacity.

M/s Konkan Railway Corporation v. Rani

Construction (Pvt.) Ltd., AIR 2002 SC 7783

The Supreme Court clarified that the order of the Chief

Justice or his designate under S.11 nominating an arbitrator
is not an adjudicatory order and the Chief Justice or his
designate is not a tribunal. It is purely administrative in
nature. However, while making appointment of arbitrator,
the Chief Justice or his designate shall take into account the
qualifications required of the arbitrator and other such
considerations, which may ensure nomination of an
independent an impartial person as an arbitrator.

2
Paranjape, Dr. N.V., Law Relating To Arbitration and Conciliation in India, 7 th Edition, 2016; Central Law
Agency, 155
3
Ibid, 156

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 SBP & Co. v. Patel Engineering Ltd.,(2005)8 SCC 6184

The seven-Judge Constitutional Bench of the Supreme

Court, overruling the five-Judge Bench decision given in
M/s Konkan Railway Corporation v. Rani Construction
(Pvt.) Ltd., settled the law in regard to appointment of
Arbitrator by Chief Justice of High Court or CJI, as the case
may be. The Court in this case held that the power
exercised by the Chief Justice of High Court or Chief
Justice of India is judicial power, and not merely
administrative power.

Ratio of holding the order u/s.11(6) as a judicial order:-

Once a party approaches the Supreme Court or the High
Court, as the case may be, for appointment of arbitrator under
S.11(6), first of all the Chief Justice, or his designate, has to
see whether he is competent to order for appointment or not.
Here, it becomes important to decide 3 questions:-

(i) Whether the arbitration agreement is valid

agreement or not.
If the arbitration agreement is not a valid agreement, then
the Court itself loses the jurisdiction of appointing the
arbitrator.
4
Paranjape, Dr. N.V., Law Relating To Arbitration and Conciliation in India, 7 th Edition, 2016; Central Law
Agency, 157

12
 (ii) Whether the party approaching is a party to the
agreement or not.
As only party to the agreement can invoke the arbitration
clause, if the approaching party is not a party to the
arbitration agreement, it cannot invoke the arbitration
clause. The Court cannot appoint an arbitrator on the
request of a non-party. Hence, the determination of the
status of the approaching party is a jurisdictional question
of law.

(iii) Whether there is a right claim or not.

The claim should be a live one. The Court has to decide the
question whether the claim was a dead one in the sense that
the parties have already settled their matters.5

We can clearly see that these three questions are

jurisdictional questions. As per general principles of law,
the Court is obliged to decide these questions, therefore the
order given under S.11(6), after deciding these questions, is
a judicial order.

5
Singh, Dr. Avtar, Law of Arbitration and Conciliation including Alternative Dispute Resolutions Systems, Tenth
Edition,2013; Eastern Book Company, 133-134

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 Changes in Court’s Power to appoint arbitrator(s) under

Section 11 introduced by the Amendment Act, 20156

It may be stated that the amendment in the principal Act

introduced by the Arbitration & Conciliation (Amendment)
Act, 2015 has deleted the words Chief Justice’ and ‘Chief
Justice of India’ with reference to the High Courts and the
Supreme Court, as the case may be, with a view to provide
expeditious disposition of applications for the appointment
of arbitrator(s) and the Courts are now expected to dispose
of the matter within a period of 60 days from the date of
service of notice on the party
Sub-section (6A) of Section 11, which has been inserted
by the Arbitration & Conciliation (Amendment) Act, 2015
specifically provides that a Court while appointing
arbitrator(s) shall confine itself to the examination of the
existence of a valid arbitration agreement between the
parties.
Sub-section (6B) further provides that the person or
institution designated for the purpose by the Supreme Court
or the High Court, as the case may be, shall not be deemed
to have been delegated judicial power by the Supreme
Court or the High Court.

6
Paranjape, Dr. N.V., Law Relating To Arbitration and Conciliation in India, 7 th Edition, 2016; Central Law
Agency, 158-159

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