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M/s Indian Institute of Planning & Management & Anr. v. M/s AK & I Advertising Pvt. Ltd.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 13700 of 2015)Decided 24 Nov 2015
Civil Appeal No. 13700 of 2015
Justice J.S. Khehar · Justice R. Banumathi

Background

An advertising agency handled advertising work for an institute under a contract that provided for arbitration. The institute terminated the contract in December 2006, and after a dispute over outstanding dues the Indian Newspaper Society tried to broker a settlement. When talks failed, the agency asked the Delhi High Court to appoint an arbitrator, and the High Court appointed one.

Decision Breakdown

The Supreme Court set aside the High Court's order. Under Section 11(5), a court may appoint an arbitrator only if one party has first requested the other party to agree on an arbitrator and the other party has failed to agree within 30 days. The Court also held that "party" in Section 2(1)(h) means a party to the arbitration agreement. The only request in the record had come from the Indian Newspaper Society, which was not a party to the contract, and the agency had never made such a request to the institute, so the High Court had no power to act.

Lesson Learnt

Before asking a court to appoint an arbitrator, a party must first send a formal request to the other party to agree on one and wait 30 days. A request made by a third party, such as a trade body that is only trying to mediate, does not satisfy this requirement.

Official source (sci.gov.in)View Judgment (PDF)

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