Overview
In this case, the Kerala High Court examined the procedure for appointing a presiding arbitrator where the two arbitrators nominated by the parties failed to reach a consensus.
The dispute arose out of an arbitration request filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, pertaining to a construction contract for a hospital building.
Earlier proceedings already resulted in the appointment of a three-member Arbitral Tribunal. One party nominated an engineer, while the other nominated a former Chief Justice of the Kerala High Court. However, both arbitrators disagreed on the appointment of a third arbitrator.
The engineer insisted that the presiding arbitrator should possess technical knowledge, whereas the former Chief Justice maintained that the presiding arbitrator should be a retired senior judge.
The principal issue to be dealt with by the Court was whether the technical nature of the dispute required the presiding officer to be an engineer or whether a judicial member could effectively discharge that role.
Facts of the Case
The parties entered into an agreement for constructing a hospital building at Perumbavoor. The contract contained a dispute resolution clause requiring the parties to first go for conciliation. If conciliation failed and they could not agree on a sole arbitrator, disputes were to be decided by a three-member tribunal, with each party nominating one arbitrator and those two appointing the presiding arbitrator.
When disputes arose, the petitioner invoked the arbitration clause. Since the parties failed to agree upon a sole arbitrator, the matter reached the High Court in earlier arbitration proceedings. The Court directed the constitution of a three-member arbitral tribunal by appointing an engineer nominated by the petitioner and a former Chief Justice nominated by the respondent.
Following the same, the engineer expressed his inability to continue, requiring the Court to appoint another engineer in his place. Thereafter, the two arbitrators tried to appoint the third arbitrator but failed due to disagreement.
The engineer stated that the complexity of the dispute required another technical expert to preside over the tribunal, while the former Chief Justice believed that a retired judge would be better suited.
As no agreement upon the same could be achieved, the petitioner approached the Kerala High Court seeking the appointment of the third arbitrator.
Legal Issues
Decision
The Kerala High Court disposed of the arbitration request by directing the Kerala High Court Arbitration Centre to nominate a former Judge from Panel I as the presiding arbitrator.
It was held by the Court that neither the Arbitration Act nor any judicial precedent requires the presiding arbitrator to possess technical qualifications merely because the dispute relates to construction.
Relying upon the Supreme Court Judgement in National Highways Authority of India v. Bumihiway DDB Ltd., it observed that there is no legal requirement that a judicial arbitrator must necessarily be matched by another judicial presiding arbitrator or that technical disputes must always be headed by engineers. It found the petitioner’s insistence on a technical presiding arbitrator to be inconsistent with its earlier willingness to appoint a retired judge as the sole arbitrator.
The Court further noted that under Section 29 of the Arbitration Act, the presiding arbitrator does not enjoy any superior adjudicatory authority over the other members except in a few cases where specifically authorised.
Addressing the concerns as to technical expertise, the Court clarified that the arbitral tribunal is free to obtain assistance from independent experts whenever any specialised issue arises. Accordingly, it was concluded that appointing a former Judge as the presiding arbitrator would not prejudice either party while ensuring fair adjudication of the dispute.
Case Reference: - AR NO. 12 of 2026 (SJB, Before S. Manu, J.)
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