Holding

Questions relating to the existence, validity, and scope of an arbitration agreement and the constitution of the arbitral tribunal fall within the jurisdiction of the arbitral tribunal under Section 16 of the Arbitration and Conciliation Act, 1996, and cannot be adjudicated by the courts.

Summary

The Food Corporation of India (FCI) entered into contracts with rice millers that contained a standard arbitration clause referring disputes to the Indian Council of Arbitration (ICA). The ICA refused to proceed with arbitration unless the parties executed a fresh arbitration agreement, prompting FCI to approach the Delhi High Court, which directed FCI to comply with ICA rules. FCI appealed, arguing that the High Court had wrongly assumed an adjudicatory role over the existence and validity of the arbitration clause and the appointment of an arbitrator. The Supreme Court held that under Section 16 of the Arbitration and Conciliation Act, 1996, any question concerning the existence, validity, or scope of an arbitration agreement and the constitution of the arbitral tribunal must be decided by the tribunal itself, not by the courts. Consequently, the High Court’s decision was set aside, and the ICA was ordered to nominate an arbitrator as per the contract, allowing the parties to raise any objections before the tribunal. The appeals were allowed.

Issues considered

Whether objections to the existence, validity or scope of the arbitration clause can be decided by a court or must be decided by the arbitral tribunal under Section 16 of the Arbitration Act, 1996.
Whether the Indian Council of Arbitration can lawfully require a fresh arbitration agreement before proceeding with arbitration.
Whether the High Court erred by adopting an adjudicatory role in determining the arbitration agreement and the appointment of the arbitrator.

Legislation cited

Arbitration and Conciliation Act, 1996s. 11, s. 16

Subjects

arbitrationarbitration clausearbitral tribunal jurisdictionSection 16Indian Council of Arbitrationcourt supervisory roleappointment of arbitratorcontractual arbitration agreementlegislative intent

Judgment

A FOOD CORPORATION OF INDIA
v.
INDIAN COUNCIL OF ARBITRATION AND ORS. ETC.ETC.

JULY 17, 2003
B
[DORAISWAMY RAJU AND D.M. DHARMADHIKARI, JJ.]

Indian Arbitration Act, 1996; Ss. 11 and 161/ndian Council of
Arbitration Rules; Rules 4(6), 5, 9, JO, 13 to 22 and 37: Agreement between
C the parties with an arbitration clause-Arbitration clause vis-a-vis !CA.
Rules-Conflict between-ICA insisting for fresh arbitration clause-
Reference by the appellant-Answered in negative by the High Court directing
appellant lo follow !CA Rules-Held: Any objections as to the existence/
enforceability/legality/validity of the arbitral clause in the agreement could
only be adjudicated by the Tribunal after its constitution and on making a
D reference to ii and not by the Courts.

Arbitration-Jurisdiction of the Courts-Invoking of-Held: since
legislative intent underlying the Act is to minimize the supervisory role of the
Courts in arbitral process, all contentious issues need to be argued/agitated
and decided by the Arbitral Tribunal-Hence !CA directed to nominate
E arbitrator for resolving disputes referred by the parties-Directions issued-
lnterpretation of Statutes.

Appellant-Corporation entered into agreements with the Millers for
storage and milling of paddy in return for payments. The agreements also
p contained an uniform/standardized arbitration clause for settlement of claims/
disputes between parties arising out of the contracts by referring the matters
to Indian Council of Arbitration (ICA) - respondent. In some cases, ICA
insisted to nominate the sole arbitrator to the Council and in other cases
issued further instructions for compliance and also refused to proceed with
the arbitration claims till appellant and Millers filed a fresh arbitration clause
G undertaking that arbitrations would be conducted in accordance with ICA
Rules. Aggrieved, appellant made a reference to the High Court. Answering
the reference, High Court directed the appellant to follow ICA Rules. Hence
the present appeals.

H 568
F.C.I. v. INDIAN COUNCIL OF ARBITRATION 569
It was contended for the appellant that since there appeared to be no A
contradiction/inconsistency between the arbitration clause and ICA Rules,
on proper and harmonious construction of the rules, disputes had to be resolved
by the arbitration through ICA; that since appellant did not assert its right to
nominate the arbitrators by themselves and instead requested ICA to nominate
arbitrators for arbitration of the matter, stand of the ICA insisting appellant B
to nominate arbitrator was unjustified; and that ICA by taking unreasonable/
unwarranted stand obstructed resolution of disputes by the arbitrators
unmindful of the heavy stakes involving public mo~ey.

On behalf of the respondent, it was submitted that in view of the decision
of this Court in Konkan Railway Corporation Ltd. and Anr. v. Rani C
Construction Pvt. Ltd., 120021 2 SCC 388 the SLPs were not maintainable
under Article 136 of the Constitution of India; that since in the arbitration
clause stipulation as to the nomination of the arbitrator by the named
authorities mentioned therein, ICA could not nominate arbitrator; and that
the stipulation as to the appointment of arbitrator in the arbitration clause
was directory in nature contrary to and in conflict with the ICA Rules. D
Allowing the appeals, the Court

HELD: 1.1. The High Court in the instant case has proceeded to adopt
an adjudicatory role and returned a verdict recording reasons as the very
existence or otherwise of the agreement as well as the tenability and legality E
or otherwise of making a reference to an arbitrator. In view of such peculiar
situation, it would be futile for the respondents to contend that the SLPs were
not maintainable, particularly in view of the fact that any recourse to have the
arbitrator appointed or nominated could be forestalled by the detailed judgment
and the findings recorded by the High Court in the instant matter. Thus, the F
details pointed out on behalf of the ICA regarding the submission as to the
provisions of law actually invoked before the High Court, the nature of the
application or the character of the order passed pales into insignificance.
[577-B-D[

Konkan Railway Corporation ltd. and Anr. v. Rani Construction Pvt. G
ltd., 1200212 sec 388, followed.

Konkan Railway Cotpn. ltd. and Ors. v. Mehul Construction Co., [20001
7 sec 201, relied on.

· 1.2. The questions r~lating to the relevant scope, meaning, purport and H
570 SUPREME COURT REPORTS [2003) SUPP. I S.C.R.

A the effect of the arbitration clause found in the agreement between parties
concerned and the legality or propriety of the constitution of Arbitral Tribunal,
in the teeth of Rules 21 and 22 of the ICA Rules as well as question relating
to alleged contradictions or inconsistencies among those provisions are
matters which go to the jurisdiction of the Arbitral Tribunal or as to the
B existence or validity of the arbitration agreement itself which, as enjoined
under Section 16 of the Arbitration Act, fails within the jurisdiction of the
Arbitral Tribunal constituted which has enabled to adjudicate on such question
also before embarking upon an exercise to decide the dispute between the
parties or decide them simultaneously. This is the inescapable position which
inevitably flows not only from the statutory provisions contained in Section
C 16 of the 1996 Act, but that such position came to be firmly settled by the
decisions of this Court, including the one rendered by the Constitution
Bench*. [577-D-GJ

*Konkan Railway Corporation ltd and Anr. v. Rani Construction Pvt.
Ltd, [2002) 2 SCC 388, followed.
D
1.3. Even assuming without accepting for purposes of consideration that
there is any infirmity in the arbitration clause which go to undermine as
claimed by the respondents the legality, propriety and validity of the constitution
of the tribunal and/or even if there be any objections as to the existence of an
enforceable or valid arbitration agreement, it had to be adjudicated by the very
E Arbitral Tribunal after a reference is made to it on being so constituted and
it is not for the ICA or the High Court to undertake this impermissible
adjudicatory task of adjudging highly contentious issues between the parties.
(578-B-CI

F Konkan Railway Corporation ltd. and Anr. v. Rani. Construction Pvt.
ltd, [200212 sec 388, followed.

1.4. The legislative int~nt underlying the 1996 Act is to minimize the
supervisory role of Courts in arbitral process and nominate/appoint the
Arbitrator without wasting time, leaving all contentious issues to be urged
G and agitated before the Arbitral Tribunal itself. Even under the old law,
common sense approach alone was commended for being adopted in construing
an arbitration clause more to perpetuate the intention of parties to get their
>
disputes resolved through the alternate disputes redressal method of
arbitration rather than thwart it by adopting a narrow, pedantic and legalistic
interpretation. It is just and more appropriate, proper and reasonable - both
H
'
'

F.C.I. v. INDIAN COUNCIL OF ARBITRATION [RAJU, J.] 571

in law and in equity and interests of justice to direct ICA to nominate the A
Arbitrator as sought for by the appellants and place the matters before such
Arbitrator, leaving open to the parties to raise and pursue all objections and
contentions and thereby seek for the decision of the Arbitrator as envisaged
under Section 16 of the 1996 Act.1578-D-GI

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4655-4809 of B
2003.

From the Judgment and Order dated 10.2.2000 of the Delhi High Court
in A.A. Nos. I75, 173, 227, 228, 229, 230, 231, I 70, 253, 254, 255, 262, 445, 446,
447,449,450,451,452,453,465-469,472-474,563,656,667,668,481,482,560- c:;
562, 564, 565, 650- 654, 656, 284-293, 296-305, 308-317, 323-352, 378-391, 396-
408, 621, 238-251, 507, 655, 566-568, 470, 471 and 252of1999.

WITH

C.A. Nos. 4810-4897 of2003.
D
G.L. Sanghi, K.C. Ranjeet and Ajit Pudussery, for the Appellant.

A.K. Ganguli, A.T. Patra, Nipun Malhotra for Mis. O.P. Khaitan & Co.,
Rajan Narain, Ms. Puja Sharma, S.L. Aneja, Balbir Singh Gupta, Pradeep
Kumar Bakshi, Balraj Dewan, R. Nedumaran, A.P. Mohanty and Mrs. Arnita E
Gupta for the Respondents.

The Judgment of the Court was delivered by

D. RAJU, J. Special leave granted.

These appeals are dealt with tugether since they involve identical F
questions for consideration on almost similar set of facts.

The appellants are the Food Corporation of India (hereinafter referred
to as the 'FCI') and it had approached the Delhi High Court and thereafter
this Court against the action of the Indian Council of Arbitration (hereinafter G
referred to as the '!CA') in refusing, as conveyed in its letter dated 4.3.1998,
to proceed with the Arbitration claims till the FCI and the opposite parties
therein (hereinafter called, 'Millers') agree in writing afresh that the arbitration
may be conducted under the Ru !es of Arbitration of the Indian Council of
Arbitration. Therefore, the Council and the concerned Millers are arrayed in
the respective cases, as respondents before this Court. H
572 SUPREME COURT REPORTS [20031 SUPP. 1 S.C.R.

A The FCI, in the course of its functions and day to day transaction of
its business, entered into agreements with the Millers for storage-cum-milling
of FCI paddy stored in Millers premises into conventional raw/parboiled rice
and delivering the rice as per the out-turn stipulated for different varieties of
paddy and delivery of the same in return for the payments to be made on the
B rates agreed to between them. The relevant contracts, apart from containing
the detailed terms and conditions for carrying out thereof, also contained an
uniform and standardized arbitration clause, for settlement of claims and
disputes arising out of such contracts through the Council. It appears, in
some cases, that the Council asked the FCI to forward the name of the sole
Arbitrator to the Council for proceeding with the matter further and in yet
C another case the Council asked the FCI to get the rice mills concerned to
convey directly to the !CA their consent.

The relevant arbitration clause in these contracts is as hereunder:-

"All disputes or differences whatever existing between the parties out
D of or relating to the agreement meaning and operation or effect of this
agreement or the breach thereof shall be settled by arbitration in
accordance with the rules or arbitration of the Indian Council of
Arbitration and the award made in pursuant thereof shall be binding
on the parties. The Senior Regional Manager I Zonal Manager of the
Corporation shall appoint I nominate Arbitrator out of the persons in
E the panel of arbitrators maintained by ICA. It is a term of this contract
that in the event of the arbitrator being transferred, vacation of office,
death or inability shall appoint another person out of panel maintained
by ICA to act as arbitrator. Such person shall be entitled to proceed
with reference from the stage where it was left by his predect:ssor.
F Provided further that any demand for arbitration in respect of any
claim(s) of the Miller, under the contract shall be in writing and made
within one year of the date of completion of expiry of the period of
contract. If the demand is not made within the period, the claim(s) of
the Millers shall be deemed to have been waived off and absolutely
G barred and the Corporation shall be discharged and released of all
liabilities under the contract in respect of these claims.

The costs of the proceedings in connection with arbitration shall be
in the discretion of the arbitrator who may make suitable provision for
the same in his award".
H
F.C.I. v. INDIAN COUNCIL OF ARBITRATION [RAJU. J.] 573
Even after the FCI had sent consent letters from different rice mills to A
ICA, finding no response from some of the Millers when the ICA wrote to
them, the ICA by its communication dated I0.12.1998 called upon the FCI to
require the concerned Millers, who gave consent for arbitration through ICA,
to communicate directly with the ICA conveying their consent and conveying
further that on receipt of the consent from the concerned Rice Mill in a B
specific case, the !CA will proceed in the matter as per the rules and that if
the Rice Mills do not give their consent for reference of the disputes for
settlement through ICA, the matter in which no clear consent is conveyed will
be closed on file and consequently refund the deposit made by the FCI.
Thereupon, the FCI approached the Delhi High Court invoking its jurisdiction
by seeking adjudication on the following three questions :- C
I. "Whether under the existing arbitration clause the dispute
between the parties is arbitrable in accordance with LC.A. Rules.

II. Whether the Registrar, LC.A. has any jurisdiction to direct the
claimant to get fresh agreement signed. If so, what is the effect of D
failure to obtain such fresh agreement and in such case which will be
the forum for adjudication of dispute between the parties.

Jll. Whether the Registrar, LC.A., in asking for the new requirement
under question No. I & II as above, is justified in his decision not to
proceed with the case further, and also to ask the Petitioner F.C.I. to E
seek approval of Respondents No.2 and 3 for appointment of a common
Arbitrator upon the F.C.l. for obtaining consent from Respondents
Nos.2 and 3 afresh in this respect''.

The stand of the FCI in respect of those questions seems to have been
that, having regard to Rules 4(b), 5, 9, 10, 13, 14 to 19, 20 to 22 & 37 of the F
ICA Rules and a proper understanding of the same, the direction to get any
fresh agreement for arbitration is contrary to law, that the arbitral proceedings
in these cases have already been commenced on 15.10.1997 when the request
for the dispute to be referred to arbitration was received by the respondents,
that the request made by the appellants is not inconsistent, in any manner,
with the ICA Rules or the provisions of the Act and consequently the ICA G
could not have refused to comply with the request to refer and proceed with
the claims in accordance with law. The same was opposed by the respondents.

The learned Single Judge of the High Court, by his order dated I0.2.2000
in A.A.Nos.175, 173 etc. of 1999, held the petitions before the Court to be not H
574 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A maintainable on the view that the proceedings necessary for the Coun to take
steps for the appointment of the Arbitrator have not been fu Ifilled. The
learned Judge observed further that the arbitration clause in question envisaged
the appointment of Arbitrator by the FC! whereas if it is to be appointed by
the ICA, it can be only with the consent of the parties, which, according to
the Court, was wanting in these cases. Rule 22(a) of the ICA Rules was
B considered to be in direct conflict with the arbitration clause entered into
between parties in this regard and once the power to appoint the Arbitrator
is given under the arbitration clause in this ca~e to the Senior Regional
Manager/Zonal Manager of the FCI, no power could be said to have been
given to the !CA to appoint an Arbitrator and that it is only after an Arbitrator
C has been appointed by the FCI in terms of the agreement the rules of the ICA
were required to be followed as to the procedure for conduct of the same and
not before that stage and consequently there was no failure on the part of
the ICA in these cases to call for the interference of the Court. Aggrieved,
these appeals have been filed.

D Heard the learned senior counsel appearing on either side. Shri G.L.
Sanghi, learned counsel for the Food Corporation of India, the appellants
herein, both at the time of hearing and in the written submissions, vehemently
contended that the orders of the High Court, under challenge, suffer from
serious infirmities and the reasons assigned therefor are untenable in law. It
E is contended for the appellants that there is no inconsistency or contradiction
between the clause for arbitration as contained in the agreement between the
parties and the provisions contained in the !CA Rules and that a proper and
harmonious construction have to be made of the same keeping in view the
firm determination of the contracting panies to have the disputes resolved
and determined by means of arbitration through the medium of the !CA. The
F High Court, according to the appellants, ought to have properly reconciled
the arbitration clause and the relevant ICA Rules to ensure the resolution of
the dispute by arbitration rather than create an unjustified and unwarranted
stalemate in the matter. Strong reliance is sought to be placed on the language
of the arbitration clause in the contract and the provisions contained in Rules
G 16, 21 and 22 of the ICA Rules to justify the stand of the appellants. It is
equally contended on behalf of the appellants that when at no point of time
the appellant asserted for any right in them to nominate the arbitrator
themselves and instead had been all along requesting the ICA to nominate
the arbitrator to facilitate arbitration in accordance with its procedure, the
stand taken for the !CA to insist upon a fresh consent for proceeding in the
H matter further was wholly unjustified. The ICA was said to be taking varying
....... F.C.I. v. INDIAN COUNCIL OF ARBITRATION [RA.JU . .I.] 575
stands at different stages to justify its unreasonable and unwarranted stand A
in obstructing the resolution of the dispute between parties amicably by
means of arbitration, unmindful of the heavy stakes involving public money
in the process. Reliance has been also made on the case law purporting to
support their stand.

Shri A.K. Ganguli, learned senior counsel appearing for the !CA, during B
the course of arguments followed by a written submissions, strenuously
contended that in view of the decision reported in Konkan Railway
Corporation Ltd. and Anr. v. Rani Construction Pvt. Ltd., [2002] 2 SCC 388
the order passed on an application under Section 11 (6) of the 1996 Act is
not adjudicatory in nature and the Judge passing the same is not a Tribunal C
and, therefore, the SLPs are not maintainable under Article 136 of the
Constitution of India. In view of the decisions reported in [2002] 2 SCC 388
(supra) and Konkan Railway Corporation Ltd. and Ors. v. Mehul Construction
Co., [2000] 7 SCC 201), it is also urged that in the teeth of the applications
filed before the High Court under Section 11(6) of the 1996 Act, it is not now
open to the appellants to contend that the same was not under the said D
provisions of law and the order passed could not be viewed as one passed
under the said provisions. Reiterating the stand taken and justifying the
course of action adopted by the !CA, it is being contended that in the teeth
of the stipulation contained in the arbitration clause in the agreement between
parties enabling the Senior Regional Manager/Zonal Manager of the E
Corporation to appoint/nominate an Arbitrator out of the persons in the panel
of Arbitrators maintained by the !CA, the question of nomination by the
Registrar of the !CA, as envisaged under Rule 22 of the ICA Rules, does not
arise and that the claims on the FCI to the contrary are not sustainable in law.
Strong reiteration is made by assigning several reasons as to why the
application filed by the appellants before the High Court must be viewed to F
be one invoking powers under Section 11(6) of the 1996 Act and not otherwise
as now claimed on behalf of the appellants. It is further urged that if at all
there had been failure to resolve the matter by means of arbitration it was due
to the lapse on the part of the appellants to nominate the arbitrator as per
its own arbitration clause and the same was not attributable to the !CA. The G
appointment of Arbitrator in the arbitration clause in the agreement between
parties is said to be directly contrary to and in conflict with the procedure
for appointment/nomination of the Arbitrator under the rules of ICA and,
therefore, there are no merits in these appeals.

Shri Rajiv Datta, learned senior counsel appearing for some of the H
576 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A Millers-Private Parties and the other learned counsel appearing for similar
such parties, who adopted his contentions, for the Millers, strenuously
contended at the time of hearing and in the written submission that no
exception could be taken to the stand of the ICA in all these matters and that
not only the appeals are not maintainable in view of the decisions of this
Court noticed supra, but the arbitration clause in the agreement and the ICA
B Rules being directly in conflict, the ICA could not have nominated the arbitrator
to proceed with the arbitration clause as sought for by the appellants.
Contentions similar to those raised by the ICA are reiterated on behalf of the
Millers too, besides contending that in the absence of any fresh agreement
between parties, there is no scope for resolving disputes by means of
C arbitration. Adverting to certain clauses in the contract, it has been also
contended for the Millers that the arbitration clause, apart from being one
sided, could be invoked only by the Millers and the disputes, if any, to be r
raised by the FCI are outside the purview of the said arbitration clause.

We have carefully considered the averments of the learned counsel
D appearing on either side. So far as the maintainability of the appeals are
concerned, strong reliance is placed upon the decisions of this Court reported
in Konkan Railway Corpn. Ltd and Ors. v. Mehul Construction Co., [2000]
7 SCC 201 and Konkan Railway Corporation Ltd. and Anr. v. Rani
Construction Pvt. Ltd, [2002] 2 SCC 388.

E The ratio of the decision in [2000] 7 SCC 20 I (supra) proceeds on the
basis that at a time when the matter comes before the Chief Justice or his
nominee under Section 11 it would not be appropriate for them to entertain
any contentious issues between the parties and decide the same and that the
decision of the Chief Justice or his nominee i' merely an administrative order,
F the nature of the function performed by them being essentially to aid the
constitution of Arbitral Tribunal immediately, just by appointing an Arbitrator
without wasting any time. Even in cases of refusal of the request to make an
appointment of an arbitrator, this Court observed that there is no involvement
of any judicial or quasi-judicial function and if at all the remedy could be only
to invoke jurisdiction under Article 226 of the Constitution of India seeking
G for a mandamus to have the reference made to an arbitrator. In the decision
reported in [2002] 2 sec 388 (supra), dealing with the case of a challenge
made to a reference and the nature of the decision taken to make the reference
to an arbitrator, the Constitution Bench of this Court held while affirming the
earlier decision that the order of the Chief Justice or his designate under
H Section 11 nominating an arbitrator is neither an adjudicatory order nor those
·.'
F.CJ. v. INDIAN COUNCIL OF ARBITRATION [RAW, J.] 577

functionaries could be held to be a Tribunal to make such a decision, the A
subject-matter of an appeal under Article 136 of the Constitution of India.
Adverting to Section 16 of the 1996 Act the Constitution Bench also held that
questions relating to the improper constitution of Arbitral Tribunal or its want
of jurisdiction or objections with respect to the existence or validity of the
arbitration agreement are matters which should be canvassed before the
Arbitral Tribunal itself which has been specifically empowered to rule on such
B
issues and on its own jurisdiction, as well. Unfortunately, the High Court in
this case seems to have proceeded to adopt an adjudicatory role and returned
a verdict recording reasons as to the very existence or otherwise of the
agreement as well as the tenability and legality or otherwise of making a
c
reference to an arbitrator. In view of such peculiar situation, it would be futile
for the respondents to contend that the SLPs are not maintainable, particularly
in view of the fact that any recourse to have the arbitrator appointed or
nominated could be forestalled by the detailed judgment and the findings
recorded by the High Court in this matter. In the light of the above, the details
pointed out on behalf of the !CA regarding the submission as to the provisions
D
of law actually invoked before the High Court, the nature of the application
or the character of the order passed pales into insignificance. The objections
in this regard are consequently rejected.
-l
So far as the questions relating to the relevant scope, meaning, purport
and the effect of the arbitration clause found in the agreement between parties E
concerned and the legality or propriety of the constitution of Arbitral Tribunal,
in the teeth of Rules 21 and 22 of the !CA Rules as well as question relating
to alleged contradictions or inconsistencies among those provisions are matters
which go to the jurisdiction of the Arbitral Tribunal or as to the existence or
validity of the arbitration agreement itself which, as enjoined under Section
16 of the 1996 Act, falls within the jurisdiction of the Arbitral Tribunal F
constituted which has been enabled to adjudicate on such question also
before embarking upon an exercise to decide the dispute between the parties
or decide them simultaneously. This is the inescapable position which
inevitably flows not only from the statutory provisions contained in Section
16 of the 1996 Act, but that such position came to be firmly settled by more G
than one decision of this Court, including the one rendered by the Constitution
Bench, noticed above., Though, elaborate and extensive arguments have been
---<
urged on both sides to justify their respective stand or to justify the orders
of the !CA and the High Court in these cases, we refrain from expressing any
opinion on the same out of deference to the consistent view of this Court that
H
578 SUPREME COURT REPORTS (2003] SUPP. I S.C.R.

A such decisions have to be made or taken only by the Arbitral Tribunal itself
to which the reference had been made, and avoid committing the very same
mistake committed by the High Court.

The fact that there is an agreement between parties to have their
disputes resolved by reference to an arbitration and that it should be through
B the !CA and in accordance with the rules or procedure prescribed by the !CA
is not in controversy. As indicated earlier even assuming without accepting
for purposes of consideration that there is any infirmity in the arbitration
clause which go to undermine as claimed by the respondents the legality,
propriety and validity of the constitution of the Tribunal and/or even if there
C be any objections as to the existence of an enforceable or valid arbitration
agreement, it had to be adjudicated by the very Arbitral Tribunal after a
reference is made to it on being so constituted and it is not for the ICA or
the learned Judge in the High Court to undertake this impermissible adjudicatory
task of adjudging highly contentious issues between the parties. As observed
by the Constitution Bench of this Court, there is nothing in Section 11 of the
D 1996 Act that requires the party other than the party making the request to
be noticed and that it does neither contemplate a response from the other
party nor contemplate any decision by the Chief Justice or his nominee on
any controversy that the other party may raise, even in regard to its failure
to appoint an Arbitrator within the stipulated period. The legislative intent
E underlying the 1996 Act is to minimize the supervisory role of courts in
arbitral process and nominate/appoint the Arbitrator without wasting time,
leaving all contentious issues to be urged and agitated before the Arbitral
Tribunal itself. Even under the old law, common sense approach alone was
commended for being adopted in construing an arbitration clause more to
F perpetuate the intention of parties to get their disputes resolved through the
alternate disputes redressal method of arbitration rather than thwart it by
adopting a narrow, pedantic and legalistic interpretation.

Keeping into consideration all these aspects, we consider it just and
more appropriate, proper and reasonable - both in law and in equity and
G interests of justice to direct ICA to forthwith and not later than sixty days
from this date nominate the Arbitrator as sought for by the appellants and
place the matters before .such Arbitrator, leaving open to the parties to raise
and pursue all objections and contentions and thereby seek for the decision
of the Arbitrator as envisaged under Section 16 of the 1996 Act, besides
getting adjudication of the respective disputes in these cases on merits and
H ~'<-'-0'.'
F.C.I. v. INDIAN COUNCIL OF ARBITRATION [RA.JU, J.] 579
in accordance with law. Both parties will have leave and liberties to do so A
before the Arbitrator on being nominated/appointed by the ICA, pursuant to
these orders.

The appeals are allowed and accordingly disposed of as indicated
above. The respective parties will bear their costs.
B
S.K.S. Appeals allowed.

..