Holding

An order under Section 11 appointing an arbitrator is not an adjudicatory order, and the Chief Justice or his designate is not a tribunal; therefore such orders are not amenable to appeal under Article 136.

Summary

The Supreme Court examined whether an order by the Chief Justice of India (or his designate) under Section 11 of the Arbitration and Conciliation Act, 1996, appointing an arbitrator, is an adjudicatory order that can be challenged by a petition for special leave under Article 136 of the Constitution. The Court held that such an appointment is a purely administrative act aimed at filling a procedural gap and does not involve adjudication of the parties’ disputes. Consequently, the Chief Justice or his designate is not a tribunal for the purposes of Article 136, and the order cannot be the subject of a special‑leave petition. The Court also declared that the notice‑and‑show‑cause requirement in the 1996 Scheme exceeds the statutory mandate and must be amended. The appeals were dismissed.

Issues considered

The nature of the order passed by the Chief Justice or his designate under Section 11 – whether it is adjudicatory or administrative.
Whether the Chief Justice or his designate constitutes a ‘tribunal’ within the meaning of Article 136.
Whether the notice‑and‑show‑cause clause in the Appointment of Arbitrators by the Chief Justice of India Scheme, 1996, is valid.

Legislation cited

Arbitration and Conciliation Act, 1996s. 10, s. 11, s. 12, s. 13, s. 16, s. 2(e), s. 34, s. 37, s. 5, s. 8
Constitution of Indias. 136
UNCITRAL Model Law on International Commercial Arbitration

Subjects

ArbitrationAppointment of arbitratorSection 11Article 136Supreme Court jurisdictionAdministrative orderUNCITRAL Model LawMandamusArbitral tribunal jurisdictionScheme amendment

Judgment

A MIS. KONKAN RAILWAY CORPORATION LTD. AND ANR.
v.
MIS. RANI CONSTRUCTION PVT. LTD.

JANUARY 30, 2002

B [S.P. BHARUCHA, CJ., SYED SHAH MOHAMMED QUADRI,
UMESH C. BANERJEE, S.N. VARIAVA AND SHIVARAJ V. PATIL, JJ.]

Arbitration and Conciliation Act, 1996:
-
C Section I I-Order passed by Chief Justice or his designate nominating
an Arbitrator-Held not adjudicatory in nature-Such an order held not
amenable to jurisdiction of Supreme Court under Article 136-UNCJTRAL
Model Law held not a guide to interpretation of Act.

The apvointment of Arbitratbrs by the Chief Justice of India Scheme,
D 1996:

Clause 7-Requirement of giving notice upon other party to arbitration
to show cause why nomination of arbitrator should not be made-Held bad- ....
Amendment suggested. ....
E Constitution of India, 1950: Article 136

Special Leave Petition-Order amenable ta-Must be an adjudicatory
order-Order passed by Chief Justice under Section 11 of Arbitration and
Conciliation Act, 1996 nominating and Arbitrator held not adjudicatory.
F ,._
The decision by a Bench of two Judges in Ador Samia case namely,
that the order of the Chief Justice or his designate in exercise of the power
under Section 11 of the Arbitration and Conciliation Act, 1996 nominating
an Arbitrator is an Administrative order and thus not amenable to
jurisdiction of the Supreme Court under Article 136 was affirmed by a
G Bench of three Judges in Konkan Railway case**. Therefore, a Bench of
two Judges referred to a larger Bench the decision of three Judges for re-
consideration***. Hence these appeals.
~- ~
On behalf of the appellants it was contended that (i) provisions
contained in Section 11 indicated that Chief .Justice or his designate had
H 728
} KONKAN RAILWAY CORPN. LTD."· RANI CONSTRUCTION PVT. LTD. 729

to perform adjudicatory function (ii) section 16 of the Act enabled the A
arbitral tribunal to decide on the width of its jurisdiction but it could not
decide whether or not an arbitrator had no jurisdiction because he had
.., .+ been appointed by the Chief Justice or his designate even though the period
of thirty days of the receipt of the request to do so had not elapsed; this
was an issue which had to be decided by the Chief Justice or his designate
and (iii) under Clause (7) of the appointment of Arbitrators by the Chief
B
Justice of India Scheme, 1996 the affected parties had to be given show
cause notice which implied that, on their showing cause, the issues they
raised would be decided by the Chief Justice or his designate.

"'
The Attorney-General submitted that (i) The Chief Justice or his
designate under Section 11 performed neither an adjudicatory function
c
~
nor they were exercising the power of the State; (ii) Sections 12 and 13
applied even to an arbitrator who had been nominated by the Chief Justice
or his designate under Section 11; (iii) The competence of the arbitral
tribunal to rule on its own jurisdiction under Section 16 was not confined
to the width of its jurisdiction but extended to deciding whether it had D
any jurisdiction at all.
.,. Dismissing the appeals, the Court

HELD : I. The order of the Chief Justice or his designate under
Section II of the Arbitration and Conciliation Act, 1996 nominating an E
arbitrator is .not an adjudicatory order and the Chief Justice or his
designate is not a tribunal. Such an order cannot properly be made the
subject of a petition for special leave to appeal under Article 136. [749-F)

**Konkan Railway Corporation and Ors. v. Mahul Construction Co.,
[2000) 7 sec 201, affirmed.
F

2. Article 136 empowers this Court to grant special leave to appeal
from any judgment, decree, sentence or order in any cause or matter
passed or made by any court or tribunal in the territory of India. For an
order properly to be the subject of a petition for special leave to appeal G
under Article 136 it must be an adjudicatory order, an order that
adjudicates upon the rival contentions of parties, and it must be passed
_, by an authority constituted by the State by law for the purpose in
discharge of the State's obligation to secure justice to its people.
[744-H; 745-A; 747-Cj H
730 SUPREME COURT REPORTS [2002] I S.C.R.

A *Ador Samia Private Limited v. Peekay Holdings and Ors., (1999) 8
SCC 572; ***Konkan Railway Corpn. ltd. and Anr. v. Rani Construction Pvt.
Ltd. [2000] 8 SCC 159; Associated Cement Companies Ltd. v. P.N. Sharma
and Anr. [1965] 2 SCR 366; Jaswant Sugar Mills Ltd., Meerut v.
... ~

Lakshmichand and Ors., (1963] Supp. 1 SCR 242 and The Engineering
Mazdoor Sabha Representing Workmen Employed under The Hind Cycles Ltd.
B and Anr. v. The Hind Cycle ltd, Bombay, [1963] Supp. 1SCR625, referred
to.

3. Section 11 of the Act deals with the appointment of Arbitrators.
There is nothing in it that requires the party other than the party making
i;
c the request to be noticed. It does not contemplate a decision by the Chief
Justice or his designate on any controversy that the other party may raise,
even in regard to its failure to appoint an arbitrator within the period of
.
thirty days. That the Chief Justice or his designate has to make the
nomination of an arbitrator only if the period of thirty days is over does
not lead to the conclusion that the decision to nominate is adjudicatory.
D In its request to the Chief Justice to make the appointment the party would
aver that this period has passed and, ordinarily, correspondence between
the parties would be annexed to bear this out. This is all that the Chief .,.
Justice or his designate has to see. That the Chief Justice or his designate
has to take into account the qualifications required of the arbitrator by
-
the agreement between the parties (which, ordinarily, would also be
E
annexed to the request) and other considerations likely to. secure the
nomination of an independent and impartial arbitrator also cannot lead
to the conclusion that the Chief Justice or his designate is required to
perform an adjudicatory function. That the word "decision" is used in the
matter of the request by a party to nominate an arbitrator does not of ,.
F itself mean that an adjudicatory decision is contemplated. (748-B-D]

4. The only function of the Chief Justice or his designate under
Section 11 is to fill the gap left by a party to the arbitration agreement or
by the two arbitrators appointed by the parties and nominate an
arbitrator. This is to enable the arbitral tribunal to be expeditiously
G ~onstituted and the arbitration proceedings to commence. It might be that
though the Chief Ju~tice or his designate might have taken all due care to
nominate an independent and impartial arbitrator, a party in a given case ,_ _.,.
may have justifiable doubts about that arbitrator's independence or
impartiality. In that event it would be open to that party to challenge the
H arbitrator under Section 12, adopting the procedure under Section 13. It
KONKAN RAILWAY CORPN. LTD. 1•. RANI CONSTRUCTION PVT. LTD. 73 J

might also be that in a given case the Chief Justice or his designate may A
have nominated an arbitrator although the period of thirty days had not
expired. If so, the arbitral tribunal would have been improperly constituted
and be without jurisdiction. It would then be open to the aggrieved party
to require the arbitral tribunal to rule on its jurisdiction. Section 16
provides for this. That the arbitral tribunal may rule "on any objections B
with respect to the existence or validity of the arbitratfon agreement"
shows that the arbitral tribunal's authority under Section 16 is not
confined to the width of its jurisdiction, but goes to the very root of its
jurisdiction. There would, therefore, be no impediment in contending
before the arbitral tribunal that it had been wrongly constituted by reason
of the fact that the Chief Justice or his designate had nominated an C
arbitrator although the period of thirty days had not expired and that,
therefore, it had no jurisdiction. [748-E-H; 749-A-C]

5. The schemes made by the Chief Justices under Section 11 cannot
govern the interpretation of Section 11. If the schemes, as drawn, go
beyond the terms of Section 11, they are bad and have to be amended. To D
the extent that the Appointment of Arbitrators by the Chief Justice of
India Scheme, 1996, goes beyond Section II by requiring, in clause 7, the
service of a notice upon the other party to the arbitration agreement to
show cause why the nomination of an arbitrator, as requested, should not
be made, it is bad and must be amended. The other party needs to be given E
notice of the request only so that it may know of it and it may, if it so
chooses, assist the Chief Justice or his designate in the nomination of an
arbitrator. [749-D-E]
6. The Act ::nd the UNCITRAL Model Law are n'lt identically
drafted. Under Section 11 the appointment of an arbitrator, in the event
of a party to the arbitration agreement failing to carry out his obligation F
to appoint an arbitrator, is to be made by "the Chief Justice or any person
or institution designated by him" under clause 11 of the Model Law, is to
be made by a Court. Section 34 of the Act is altogether different from
clause 34 of the Model Law. The Model Law and judgments and literature
thereon are, therefore, not a guide to the interpretation of the Act, and, G
especially of Section I I thereof. [742-G-H; 743-A]
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 5880-
5889 of I 997.
From the Judgment and Order dated 4.7.97 of the Bombay High Court
in M.C.A. Nos. 49-58 of 1997. H
732 SUPREME COURT REPORTS (2002] I S.C.R.

A WITH
C.A. Nos. 713-714, 715, 716, 2037-2040, 2041, 2042-2044, 4311, 4312,
4324, 4356, 7304 and 7306-7309 of 1999. "- ~
Soli J. Sorabjee, Attorney General, S. Ganesh, P.P. Malhotra, S.K.
Dholakia, Dushyant Dave, Atul Y. Chitale Sanjiv Sen, Suchitra Atul Chitale,
B B.K. Satija, S. Muralidhar, V.B. Saharya, For Mis. Saharya and Co. Dhruv
Mehta, Prakeek Jalan, Anil Katiyar V.K. Verma, P. Nagesh, K.V. Mohan, S.
Guru Krishna Kumar, L.C. Tolat, S.R. Setia, B.K. Satija, S. Muralidhar, P.S.
Sudheer K.J. Jhon, P. Venugopal, Narendra M. Sharma, R.K. Sanghi, Rajesh
Prasad Singh and Hari Shankar K. for the appearing parties.
c The Judgment of the Court was delivered by
)'

...
BHARUCHA, C.J. In Ador Samia Private Limited v. Peekay Holdings
Limited and Ors., [I 999] 8 SCC 572, a Bench of two learned Judges of this
Court came to the conclusion that the Chief Justice or any person or institution
D designated by him, acting under Section 11 of the Arbitration and Conciliation
Act, 1996 (hereinafter called "The Act"), acted in an administrative capacity
and such order did not attract the provisions of Article 136 of the Constitution
of India. A Bench of two learned Judges referred for re-consideration the
decision in Ador Samia to a Bench of three learned Judges. The decision of
"
the Bench of the three learned Judges Konkan Railway Corporation Ltd. and
E Ors. v. Mehul Construction Co., [2000] 7 SCC 201 affirmed the view taken
in Ador Samia, namely, that the order of the Chief Justice or his designate
in exercise of the power under Section 11 of the Act was an administrative
order and that such order was not amenable to the jurisdiction of this Court
under Article 136. Thereafter, in Konkan Railway Corpn. Ltd. and Anr. v.
Rani Construction Pvt. Ltd., [2000] 8 SCC 159, a Bench of two learned
F Judges referred to a larger Bench the decision of the three learned Judges for *
re-consideration (a practice which a Constitution Bench has frowned upon).
This is how the matter comes to be placed before a Constitution Bench.

When it first reached before a Constitution Bench, the following order
was passed :
G
"This reference has been made by a detailed referral order [2000]
s sec 159.
-.-- ---
It appears that the Chief Justice or his nominee, acting under
Section 11 of the Arbitration and Reconciliation Act, 1996, have
H
KONKAN RAILWAY CORPN. LTD. v. RANI CONSTRUCTION PVT. LTD. [BHARUCHA, CJ.J 733
decided contentious issues arising between the parties to an alleged A,
.., ,. arbitration agreement and the question that we are called upon to
decide is whether such an order deciding issues is a judicial order or
an administrative order.

In the course of the short hearing before us, another question has
surfaced, which is: does the Chief Justice or his nominee, acting B
under Section 11, have the authority to decide any contentious issues
between the parties to the alleged arbitration agreement? In other
words, is the power of the Chief Justice or his nominee under Section
.. 11 restricted to the nomination of an arbitrator in cases falling under

.. Sub-sections (4 ), ( 5) and (6) thereof?
c
From what we understood, the learned Solicitor General appearing
for the appellant, and learned counsel appearing for the respondents
are ad idem on this aspect. According to both of them, the power of
the Chief Justice or his nominee under Section 11 is restricted to the
nomination of an arbitrator and the order that he makes is an
D
administrative order.

It, therefore, becomes necessary to request the Attorney General
to assist the Court. Mr. Andhyarujina, who is in Court but is not
appearing in the matter, has advanced some submissions before us.
He shall also be entitled to do so when the matter is taken up again E
before a Constitution Bench.

The Registry shall furnish a copy of this order and a copy of the
paper books both to the Attorpey General and to Mr. Andhyarujina .
• Adjourned accordingly."
F
To determine whether the order of the Chief Justice or his d;signate
under Section 11 of the Act is a judicial order or an administrative order, it
is necessary to take note of certain provisions of the Act. Section 2(e) defines
a Court thus :
G
"(e) "Court" means the principal Civil Court of original jurisdiction
in a district, and includes the High Court in exercise of its ordinary
~ r' original civil jurisdiction, having jurisdiction to decide the questions
forming the subject-matter of the arbitration if the same had been the
subject-matter of a suit, but does not include any civil court of a
grade inferior to such principal Civil Court, or any Court of Small H
734 SUPREME COURT REPORTS [2002] I S.C.R.

A Causes;"

Section 5 reads thus :
"Extent ofjudicial intervention - Notwithstanding anything contained
in any other law for the time being in force, in matters governed by
this Part, no judicial authority shall intervene except where so provided
B in this Part."

Section 8, so far as is relevant, reads thus :

"8(1) A judicial authority before which an action is brought in a

-
matter which is the subject of an arbitration agreement shall, if a
c party so applies not later than when submitting his first statement on
the substance of the dispute, refer the parties to arbitration."

Section I 0 states that the parties to an arbitration agreement are free to
determine the number of arbitrators, provided that such number shall not be
an even number; failing such determination, the arbitral tribunal shall consist
D of a sole arbitrator.

Section I I reads thus :

"Appointment of arbitrators - (1) A person of any nationality may be
an arbitrator, unless otherwise agreed by the parties.

E (2) Subject to sub-section (6), the parties are free to agree on a
procedure for appointing the arbitrator or arbitrators.

(3) Failing any agreement referred to in sub-section (2), in an
arbitration with three arbitrators, each party shall appoint one arbitrator,
and the two appointed arbitrators shall appoint the third arbitrator
who shall act as the presiding arbitrator.
F
(4) If the appointment procedure in sub-section (3) applies and-

(a) a party fails to appoint an arbitrator within thirty days from
the receipt of a request to do so from the other party; or

(b) the two appointed arbitrators fail to agree on the third
G arbitrator within thirty days from the date of their
appointment,

the appointment shall be made, upon request of a party, by the Chief
Justice or any person or institution designated by him.

H (5) Failing any agreement referred to in sub-section (2), in an
f-
KONKAN RAILWAY CORPN. LTD. 1•. RANI CONSTRUCTION PVT.LTD. [BHARUCHA, CJ.) 735

arbitration with a sole arbitrator, if the parties fail to agree on the A
arbitrator within thirty days from receipt of a request by one party
from the other party to so agree the appointment shall be made, upon
request of a party, by the Chief Justice or any person or institution
designated by him.

(6) Where, under an appointment procedure agreed upon by the B
parties,

(a) a party fails to act as required under that procedure; or

(b) the parties, or the two appointed arbitrators, fail to reach an
agreement expected of them under that procedure; or C
(c) a person, including an institution, fails to perform any
function entrusted to him or it under that procedure,

a party may request the Chief Justice or any person or institution
designated by him to take the necessary measure, unless the agreement D
on the appointment procedure provides other means for securing the
appointment.

(7) A decision on a matter entrusted by sub-section (4) or sub-section
(5) or sub-section (6) to the Chief Justice or the person or institution
designated by him is final.
E
(8) The Chief Justice or the person or institution designated by him,
in appointing an arbitrator, shall have due regard to -

(a) any qualifications required of the arbitrator by the agreement
of the parties; and
F
(b) other considerations as are likely to secure the appointment
of an independent and impartial arbitrator.

(9) In the case of appointment of sole or third arbitrator in an
international commercial arbitration, the Chief Justice of India or the
person or institution designated by him may appoint an arbitrator of G
a nationality other than the nationalities of the parties where the
parties belong to different nationalities.

(I 0) The Chief Justice may make such scheme as he may deem
appropriate for dealing with matters entrusted by sub-section (4) or
sub-section (5) or sub-section (6) to him. H
736 SUPREME COURT REPORTS [2002) 1 S.C.R.

A (!I) Where more than one request has been made under sub-section
(4) or sub-section (5) or sub-section (6) to the Chief Justices of
different High Courts or their designates, the Chief Justice or his
designate to whom the request has been first made under the relevant
sub-section shall alone be competent to decide on the request.

B (12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7),
(8) and (10) arise in an international commercial arbitration, the
ref~rence to "Chief Justice" in those sub-sections shall be
construed as a reference to the "Chief Justice of India".
~

c
(b) Where the matters referred to in sub-sections (4), (5), (6), (7),
(8) and (I 0) arise in any other arbitration, the reference to "Chief
Justice" in those sub-sections shall be construed as a reference to
·-
the Chief Justice of the High Court within whose local limits the
principal Civil Court referred to in clause ( e) of sub-section (I)
of Section 2 is situate and, where the High Court itself is the
Court referred to in that clause, to the Chief Justice of that High
D Court."
'\
Section 12 imposes upon a person approached to be an arbitrator the obligation
'
to disclose to the parties in writing any circumstance that may give rise to
justifiable doubts as to his independence and impartiality. An arbitrator can
be challenged if there are circumstances that give rise to justifiable doubts
E about his independence and impartiality or if he does not possess the
qualifications agreed to by the parties, but such challenge can be made only
for reasons which the party challenging becomes aware of after the appointment
has been made. Section 13 speaks of the challenge procedure. It states that
the parties are free to agree on such a procedure. Failing that, the party who
.
F makes the challenge must within fifteen days after becoming aware of the
constitution of the arbitral tribunal or of any of the circumstances mentioned
in Section 12, send a written statement of the reasons for the challenge to the
arbitral tribunal. Unless the challenged arbitrator withdraws or the other party
to the arbitration agrees to the challenge, the arbitral tribunal shall decide
upon the challenge and if the challenge is not successful it shall continue the
G arbitration proceedings and make an award. That award can be sought to be
set aside under Section 34. ,._ -·
Section 16 empowers the arbitral tribunal to rule on its own jurisdiction.
Clause ( 1) of Section 16 is relevant, and reads thus :

H "(I) The arbitral tribunal may rule on its own jurisdiction, including
KONKAN RAILWAY CORPN. LTD. 1·. RANI CONSTRUCTION PVT.LTD. [BHARUCHA, CJ.] 73 7

ruling on any objections with respect to the existence or validity of A
the arbitration agreement, and for that purpose,-

(a) an arbitration clause which forms part of a contract shall be
treated as an agreement independent of the other terms of
the contract; and
B
(b) a decision by the arbitral tribunal that the contract is null
and void shall not entail ipso jure the invalidity of the
arbitration clause.

If a party is aggrieved by an arbitral award made after rejection of his
plea of jurisdiction, he can challenge it in accordance with Section 34. C
Section 34, so far as is relevant reads thus :

"(I) Recourse to a court against an arbitral award may be made only
by an application for setting aside such award in accordance with
sub-section (2) and sub-section (3). D
(2) An arbitral award may be set aside by the court only if-

(a) the party making the application furnishes proof that -

(i) a party was under some incapacity; or

(ii) the arbitration agreement is not valid under the law to which
E
the parties have subjected it or, failing any indication thereon,
under the law for the time being in force; or

(iii) the party making the application was not given proper notice
of the appointment of an arbitrator or of the arbitral F
proceedings or was otherwise unable to present his case; or

(iv) the arbitral award deals with a dispute not contemplated by
or not falling within the terms of the submission to arbitration,
or it contains decisions on matters beyond the scope of the
submission to arbitration :
G
Provided that, if the decisions on matters submitted to
arbitration can be separated from those not so submitted,
only that part of the arbitral award which contains decisions
on matters not submitted to arbitration may be set aside; or
(v) the composition Of the arbitral tribunal or the arbitral H
738 SUPREME COURT REPORTS (2002] I S.C.R.

A procedure was not in accordance with the agreement of the
parties, unless such agreement was in conflict with a provision
of this Part from which the parties cannot derogate, or, failing
such agreement, was not in accordance with this Part; or.

(b) the court finds that -
B
(i) the subject-matter of the dispute is not capable of
settlement by arbitration under the Jaw for the time being
in force, or

(ii) the arbitral award is in conflict with the public policy of
c India.

Exp/anation.-Without prejudice to the generality of sub-clause
(2), it is hereby declared, for the avoidance of any doubt, that an
award is in conflict with the public policy of India if the making
of the award was induced or affected by fraud or corruption or
D was in violation of Section 75 or Section 81."

An order setting aside or refusing to set aside an arbitral award under Section
34 is appealable by reason of Section 37. Also appealable are the orders
relating to the jurisdiction of the arbitral tribunal under Section 16.

It is convenient at this stage to set out the scheme framed by the Chief
E Justice of India under Section 11(I0) of the Act. It is representative of the
schemes framed by the High Courts under the same provision.

"THE APPOINTMENT OF ARBITRATORS BY THE CHIEF
JUSTICE OF INDIA SCHEME, 1996

F No.F.2211195/SCA/Gen/.- In exercise of the powers conferred on the Chief
Justice of India under sub-section ( 10) of section 11 of the Arbitration and
Conciliation Ordinance, 1996, I hereby make the following Scheme.

I. Short title.-This Scheme may be called the Appointment of Arbitrators
by the Chief Justice of India Scheme, 1996.
G
2. Submission of request.-The request to the Chief Justice under sub-section
(4) or sub-section (5) or sub-section (6) of section 11 shall be made -in
writing and shall be accompanied by- v-
(a) the original arbitration agreement or a duly certified copy thereof;
'
H (b) the names and addresses of the parties to the arbitration agreement;
KONKAN RAILWAYCORPN. LTD. 1•. RANI CONSTRUCTION PVT.LTD. [BHARUCHA, CJ.] 739

(c) the names and addresses of the arbitrators, if any, already A
appointed;

(d) the name and address of the person or institution, if any, to
whom or which any function has been entrusted by the parties to
the arbitration agreement under the appointment procedure agreed
upon by them; B
(e) the qualifications required, if any, of the arbitrators by the
agreement of the parties;

(f) a brief written statement describing the general nature of the
dispute and the points at issue;

(g) the relief or remedy sought; and
c
(h) an affidavit, supported by the relevant document, to the effect
that the condition to be satisfied under sub-section (4) or sub-
section; (5) or sub-section (6) of section 11, as the case may be,
before making the request to the Chief Justice, has been satisfied. D
3. Authority to deal with the request-Upon receipt of a request under
paragraph 2, the Chief Justice may either deal with the matter entrusted to
him or designate any other person or institution for that purpose.

4. Forwarding of request to designated person or institution-Where
the Chief Justice designates any person or institution under paragraph 3, he E
shall have the request along with the documents mentioned in paragraph 2
forwarded forthwith to such person or institution and also have a notice sent
to the parties to the arbitration agreement.

5. Seeking further itiformation-The Chief Justice or the person or the F
institution designated by him under paragraph 3 may seek further information
or clarification from the party making the request under this Scheme.

6. Rejection of request-Where the request made by ar.y party under
paragraph 2 is not in accordance with the provisions of this Scheme, the
Chief Justice or the person or the institution designated by him may reject it. G
7. Notice to affected persons-Subject to the provisions of paragraph
6, the Chief Justice or the person or the institution designated by him shall
direct that a notice of the request be given to all the parties to the arbitration
agreement and such other person or persons as may seem to him or is likely
to !">~ affected by such request to show cause, within the time specified in the H
740 SUPREME COURT REPORTS [2002] I S.C.R.

A notice, why the appointment of the arbitrator or the measure proposed to be
taken should not be made or taken and such notice shall be accompanied by
copies of all documents referred to in paragraph 2 or, as the case may be, by
information or clarification, if any, sought under paragraph 5.

8. Withdrawal. of authority-If the Chief Justice, on receipt of a
B complaint from either party to the arbitration agreement or otherwise is of
opinion that the person or institution designated by him under paragraph 3
has neglected or refused to act or is incapable of acting he may withdraw the
authority given by him to such person or institution and either deal with the
request himself or designate another person or institution for that purpose.

c 9. Intimation of action taken on request-The appointment made or
measure taken by the Chief Justice or any person or institution designated by
him in pursuance of the request under paragraph 1 shall be communicated in
writing to-

(a) the parties to the arbitration agreement;
D
(b) the arbitrators, if any, already appointed by the parties to the
arbitration agreement;
~

(c) the person or the institution referred to in paragraph 2(d);
(d) the arbitrator appointed in pursuance of the request.
E
10. Requests and communications to be sent to Registrar.-All requests
under this Scheme and communications relating thereto which are addressed
to the Chief Justice shall be presented to the Registrar of this court, who shall
maintain a separate Register of such requests and communications.

F 11. Delivery and receipt of written communications-The provisions of
.
sub-sections (1) and (2) of section 3 of the Arbitration and Conciliation
Ordinance, 1996 shall, so far as may be, apply to all written communications
received or sent under this Scheme.

12. Costs for processing requests-The party making a request under
G this Scheme shall, on receipt of notice of demand from-

(a) the Registry of the court where the Chief Justice makes the
appointment of an arbitrator or takes the necessary measure, or

(b) the designated person or the institution as the case may be, where
y
-
H such person or institution makes appointment or arbitrator or
KONKAN RAILWAY CORPN. LTD. ''· RANI CONSTRUCTION PVT. LTD. [BHARUCHA, CJ.] 741

takes the necessary measure, A
pay an amount of Rs. 15,000 in accordance with the terms of such
notice towards costs involved in processing the request.

13. Interpretation-If any question arises with reference to the
interpretation of any of the provisions of this Scheme, the question shall be B
referred to the Chief Justice, whose decision shall be final.

14. Power to amend the Scheme-The Chief Justice may, from time to
time, amend by way of addition or variation any provision of this Scheme."

The three Judge Bench whose judgment is to be reconsidered framed C
the following two questions for consideration:

"(!) What is the nature of the order that is passed by the Chief
Justice or his nominee in exercise of power under sub-section (6) of
Section 11 of the Act?
D
(2) Even if the said order is held to be administrative in nature what
is the remedy open to the person concerned if his request for
appointment of an arbitrator is turned down by the learned Chief
Justice or his nominee, for some reason or other?"
E
The three Judge Bench noted that the Act was based upon the UNCITRAL
Model framed by the Commission on International Trade Law established by
the United Nations. It said that if a comparison was made between the language
of Section 11 of the Act and Article 11 of the Model Law it was apparent
that the Act had designated the Chief Justice of a High Court in cases of
domestic arbitration and the Chief Justice of India in cases of international F
commercial .arbitration to be the authority to perform the function of
appointment of an arbitrator whereas under the Model Law that power had
been vested in the court. When the matter was placed before the Chief Justice
or his designate under Section 11 it was imperative for the Chief Justice or
his designate to bear in mind the legislativeJntent that the arbitral process G
should be set in motion without any delay ll!ld leave all contentious issues to
be raised before the arbitral tribunal-< At jhit stage it was not appropriate for
~ the Chief Justice or his designate to entertain any contentious issues between
the parties and decide the same. A bare reading of Sections 13 and 16 made
:t clear that questions with regard to the qualifications, independence and
impartiality of the arbitrator and in respect of the jurisdiction of the arbitrator H
742 SUPREME COURT REPORTS [2002] I S.C.R.
-
A could be raised before the arbitrator, who would decide the same. If a
contingency arose where the Chief Justice or his designate refused to make
an appointment, the party seeking the appointment was not without remedy.
An intervention was possible by a court in the same way as an intervention
was possible against an administrative order of the executive. In other words,
it would be a case of n:m-performance of his duty by the Chief Justice or his
B designate and, therefore, a mandamus would lie. In such an event there
would not be any inordinate delay in setting the arbitral process in motion.
The nature and function performed by the Chief Justice or his designate
being essentially to aid the constitution of the arbitral tribunal, it could not
be held to be a judicial function, as otherwise the legislature would have used
C the expression "court" or "judicial authority". It was, therefore, held that an
order under Section I 1 refusing to appoint an arbitrator was not amenable to
the jurisdiction of this Court under Article 136 of the Constitution.

In the referring judgement the Bench of two learned Judges noted the
material relied upon by learned counsel for the appellant before them, which
D related to the Model Law, and learned counsel's argument. It then stated, "In
the light of the above contentions and material, which in our opinion have a
substantial bearing on the matter, and further inasmuch as this question is one
arising almost constantly in a large number of cases in the various High
Courts, it is desirable that this Court re-examines the matter".
E
It is convenient at this stage itself to deal with the argument based on
the Model Law. The Statement of Objects and Reasons of the Act states,
"Though the said UNCITRAL Model Law and Rules are intended to deal
with international commercial arbitration and conciliation, they could, with
appropriate modifications, serve as a model for legislation on domestic
F arbitration and conciliation. The present Bill seeks to consolidate and amend
the law relating to domestic arbitration, international commercial arbitration,
enforcement of foreign arbitral awards and to define the law relating to
conciliation, taking into account the said UNCITRAL Model Law and Rules''.
That the Model Law was only taken into account in the drafting of the said
G Act is, therefore, patent. The Act and the Model Law are not identically
drafted. Under Section 11 the appointment of an arbitrator, in the event of a
party to the arbitration agreement failing to carry out his obligation to appoint
an arbitrator, is to be made by "the Chief Justice or any person or institution
designated by him"; under clause 11 of the Model Law it is to be made by
a court. Section 34 of the Act is altogether different from clause 34 of the
H Model Law. The Model Law and judgments and literature thereon are,
KONKAN RAILWAY CORPN. LTD. v. RANI CONSTRUCTION PVT. LTD. [BHARUCHA, CJ.J 743

therefore, not a guide to the interpretation of the Act and, especially, of A
Section 11 thereof.

Learned counsel for the appellants submitted that Section 11 of the Act
laid down conditions precedent to the Chief Justice or his designate naming
an arbitrator in that, as for example, in sub-section(4)(a) the party had to fail
to appoint an arbitrator within thirty days from the receipt of a request to do B
so from the other party. If the party who was alleged to have failed to appoint
an arbitrator within thirty days of the receipt of the request contested this
position, it was for the Chief Justice or his designate to decide the issue.
Reliance was placed upon sub-section (7) of Section 11, which refers to a
"decision" on the matter entrusted to the Chief Justice or his designate, and C
on sub-section (8), which requires the Chief Justice or his designate to have
due regard to the qualifications required of the arbitrator by the agreement of
the parties and other considerations as are likely to secure the appointment
of an independent and impartial arbitrator. In learned counsel submission,
these also indicated that the Chief Justice or !\is designate had to perform an
adjudicatory function in naming an arbitrator. Learned counsel submitted that D
Section 16 of the Act enabled the arbitral tribunal to decide on the width of
its jurisdiction but it could not decide whether or not an arbitrator had no
jurisdiction because he had been appointed by the Chief Justice or his designate
even though the period of thirty days of the receipt of the request to do so
had not elapsed; this was an issue which had to be decided by the Chief E
Justice or his designate. Reliance was placed upon clause 7 of The Appointment
of Arbitrators by the Chief Justice of India Scheme; it was submitted that the
affected parties had to be given notice by reason of that clause to show cause,
which implied that, on their showing cause, the issues they raised would be
decided by the Chief Justice or his designate. Reliance was placed upon
Associated Cement Companies Ltd. v. P.N. Sharma and Anr., [1965] 2 SCR F
366, to contend that the Chief Justice or his designate functioned as a tribunal
so as to attract Article 136 to the order naming an arbitrator. It was submitted
that the four essential requirements in this behalf were satisfied, namely, the
appointment of the Chief Justice was an appointment by the State; the Chief
Justice or his designate were independent of the executive; there was a duty G
cast upon them to decide judicially; and they had the power to enforce their
decision.

The learned Attorney General, on notice, made submissions that were
adopted by learned counsel for the respondents. The Attorney General drew
our attention to Section 5 of the Act, which mandated that no judicial authority H
744 SUPREME COURT REPORTS [2002] I S.C.R.

A should intervene except to the extent provided in the Act, and to Section 8,
which required a judicial authority before which an action was brought in a
matter which was the subject of an arbitration agreement to refer the parties
to arbitration. The emphasis of the Act, in the learned Attorney General's
submission, was to expedite the proceedings of the domestic tribunal to which
B the parties had agreed to submit their disputes. It was in this light that the Act
had to be read. Section 11 did not require the Chief Justice or his designate
to perform any adjudicatory function. All that the Chief Justice or his designate
was required to do was to nominate an arbitrator if a party to an arbitration
agreement had failed to do so within the specified time after a request to it
to do so had been made, and in so nominating an arbitrator the Chief Justice
C or his designate was to have regard to the qualifications that were required
of the arbitrator by the agreement of the parties and to other considerations
which were likely to secure the appointment of an independent and impartial
arbitrator. This the Chief Justice or his designate had to do on an ex facie
basis; no element of adjudication came into it. The learned Attorney General
drew attention to Sections 12 and 13 which provided for a challenge to an
D arbitrator in respect of whom there were doubts about independence or
impartiality. The provisions of Sections 12 and 13 applied even to an arbitrator
who had been nominated by the Chief Justice or his designate under Section
11. In the submission of the learned Attorney General, the competence of the
arbitral tribunal to rule on its own jurisdiction under Section 16 was not
E confined to the width of its jurisdiction but extended to deciding whether it
had any jurisdiction at all. Section 34 gave a party adversely affected by an
arbitral award the right to approach a court to set it aside on the stated
grounds, which included the composition of the arbitral tribunal. An order
under Section 34 was appealable under Section 37, as was an order accepting
the plea that the arbitral tribunal did not have jurisdiction. The learned Attorney
F General drew our attention to the judgments of this Court in The Engineering
Mazdoor Sabha Representing Workmen Employed under The Hind Cycles
Ltd. & Anr. v. The Hind Cycle Ltd., Bombay, [1963] Supp. I SCR 625 and
Jaswant Sugar Mills Ltd., Meerut v. Lakshmichand & Ors., [1963] Supp. I
SCR 242 to submit that a tribunal was a body that exercised an adjudicatory
I
G function. The Chief Justice or his designate under Section 11 performed

-
neither an adjudicatory function nor they were exercising the power of the
State. They were not, therefore, tribunals and their orders under Section 11
could not be made the subject of petitions for leave to appeal under Article
...
136.

·{ Article 136 empowers this Court to grant special leave to appeal from
KONKAN RAILWAYCORPN. LTD. v. RANI CONSTRUCTION PVT. LTD. [BHARUCHA, CJ.] 745

any judgment, decree, sentence or order in any cause or matter passed or A
made by any court or tribunal in the territory of India. For the nomination of
,,.., an arbitrator by the Chief Justice or his designate under Section 11 of the Act
to be subject to Article 136 such nomination must be (a) a judgment, decree,
determination, sentence or order (b) passed or made by any court or tribunal
in the territory of India. The question is whether such nomination is a
determination or order and whether it is made by a tribunal, as contended by
B
learned counsel for the appellants. There is in the line of authority of this
Court on the subject a recurring theme.

~
In the judgment cited by learned counsel for the appellants himself,
namely, the case of Associated Cement Companies Ltd., a Constitution Bench
said, "The question which we have to decide in the present appeal is whether
c
the State Government is a tribunal when it exercises its authority under R.6(5)
or R.6(6) ........... The main and basic test, however, is whether the adjudicating
power which a particular authority is empowered to exercise has been conferred
on it by a statute and can be described as a part of the State's inherent power
exercised in discharging its judicial function. Applying this test, there can be D
no doubt that the power which the State Government exercises under R.6(5)
,- and R.6(6) is a part of the State's judicial power. It has been conferred on
~ the State Government by a statutory Rule and it can be exercised in respect
of disputes between the management and its welfare officers. There is, in that
sense, a !is; there is affirmation by one party and denial by another, and the
dispute necessarily involves the rights and obligations of the parties to it." E

In Jaswant Sugar Mills Ltd., cited by the learned Attorney General, this
Court said, "The expression "determination" in the context in which it occurs
_,. in Article 136 signifies an effective expression of opinion which ends a
controversy or a dispute by some authority to whom it is submitted under a
valid law for disposal. The expression "order'' must have also a similar
F
meaning, except that it need not operate to end the dispute. 'Determination'
or 'order' must be judicial or quasi-judicial; purely administrative or executive
direction is not contemplated to be made the subject-matter of appeal to this
Court. The essence of the authority of this Court being judicial, this Court
does not exercise administrative or executive powers, i.e., character of the G
power conferred upon this Court, original or appellate, by its constitution
' ~ being judicial, the determination or orqer sought to be appealed from must
have the character of a judicial adjudication". The Court went on to state that
to make a decision or an act judicial, the following criteria must be satisfied:

"(!) it is in substance a determination upon investigation of a question H
746 SUPREME COURT REPORTS [2002) I S.C.R.

A by the application of objective standards to facts found in the
light of pre-existing legal rule;

(2) it declares rights or imposes upon parties obligations affecting
their civil rights; and
-
(3) that the investigation is subject to certain procedural attributes
B contemplating an opportunity of presenting its case to a party,
ascertainment of facts by means of evidence if a dispute be on
questions of fact, and if the dispute be on question of Jaw on the
presentation of legal argument, and a decision resulting in the
disposal of the matter on findings based·upon those questions of
c Jaw and fact."

The Court added, "But every decision or order by an authority under a duty
to act judicially is not subject to appeal to this Court. Under Article 136, an
appeal lies to this Court from adjudications of courts and tribunals only.
Adjudication of a court or a tribunal must doubtless be judicial : but every
D authority which by its constitution or authority specially conferred upon it is
required to act judicially, is not necessary a tribunal for the purpose of Article
136."

In the case of The Engineering Mazdoor Sabha, a Constitution Bench
said:
E
"For invoking Art. 136(1), two conditions must be satisfied. The
proposed appeal must be from any judgment, decree, determination,
sentence or order, that is to say, it must not be against a purely
executive or administrative order. If the determination or order giving
rise to the appeal is a judicial or quasi-judicial determination or order,
F the first condition is satisfied. The second condition imposed by the
Article is that the said determination or order must have been made
or passed by any Court or Tribunal in the territory of India. These
conditions, therefore, require that the act complained against must
have the character of a judicial or quasi-judicial act and the authority
whose act is complained against must be a Court or a Tribunal. Unless
G
both the conditions are satisfied, Article 136 (!)cannot be invoked."

The Court added:

" ... The Tribunals which are contemplated by Article 136(1) are
clothed with some of the powers of the courts. They can compel
H witnesses to appear, they can administer oath, they are required to
KONKAN RAILWAY CORPN. LTD. 1•. RANI CONSTRUCTION PVT. LTD. [BHARUCHA, CJ.) 74 7

follow certain rules of procedure; the proceedings before them are A
required to comply with rules of natural justice, they may not be
bound by the strict and technical rules of evidence, but, nevertheless,
they must decide on evidence adduced before them; they may not be
bound by other technical rules of law, but their decisions must,
nevertheless, be consistent with the general principles of law. In other B
words, they have to act judicially and reach their decisions in an
objective manner and they cannot proceed purely administratively or
base their conclusions on subjective tests or inclinations... ".

To put it concisely for an order properly to be the subject of a petition
for special leave to appeal under Article 136 it must be an adjudicatory order, C
an order that adjudicates upon the rival contentions of parties, and it must be
passed by an authority constituted by the State by law for the purpose in
discharge of the State's obligation to secure justice to its people.

Section 11 of the Act deals with the appointment of arbitrators. It
provides that the parties are free to agree on a procedure for appointing an D
arbitrator or arbitrators. In the event of there being no agreement in regard
to such procedure, in an arbitration by three arbitrators each party is required
to appoint one arbitrator and the two arbitrators so appointed must appoint
the third arbitrator. If a party fails to appoint an arbitrator within thirty days
from the request to do so by the other party or the two arbitrators appointed
by the parties fail to agree on a third arbitrator within thirty days of their E
appointment, a party may request the Chief Justice to nominate an arbitrator
and the nomination shall be made by the Chief Justice or any person or
institution designated by him. If the parties have not agreed on a procedure
for appointing an arbitrator in an arbitration with a sole arbitrator and the
parties fail to agree on an arbitrator within thirty days from receipt of a F
request to one party by the other party, the nomination shall be made on the
request of a party by the Chief Justice or his designate. Where an appointment
procedure has been agreed upon by the parties but a party fails to act as
required by that procedure or the parties, or the two arbitrators appointed by
them, fail to reach the agreement expected of them under that procedure or
a person or institution fails to perfonn the function entrusted to him or it G
under that procedure, a party may request the Chief Justice or his designate
to nominate an arbitrator, unless the appointment procedure provides other
means in this behalf. The decision of the Chief Justice or his designate is
final. In nominating an arbitrator the Chief Justice or his designate must have
regard to the qualifications required of the arbitrator in the agreement between
the parties and to other considerations that will secure the nomination of an H
"\

748 SUPREME COURT REPORTS [2002] I S.C.R.

A independent and impartial arbitrator.

There is nothing in Section 11 that requires the party other than the
party making the request to be noticed. It does not contemplate a response
~ -
from that other party. It does not contemplate a decision by the Chief Justice
or his designate on any. controversy that the other party may raise, even in
B regard to its failure to appoint an arbitrator within the period of thirty days.
That the Chief Justice or his designate has to make the nomination of an
arbitrator only if the period of thirty days is over does not lead to the conclusion
that the decision to nominate is adjudicatory. In its request to the Chief
Justice to make the appointment the party would aver that this period has
passed and, ordinarily, correspondence between the parties would be annexed
c to bear this out. This is all that the Chief Justice or his designate has to see.
That the Chief Justice or his designate has to take into account the qualifications
required of the arbitrator by the agreement between the p· irties (which,
ordinarily, would also be annexed to the request) and other considerations
likely to secure the nomination of an independent and impartial arbitrator
D also cannot lead to the conclusion that the Chief Justice or his designate is
required to perform an adjudicatory function. That the word 'decision' is
"i
used in the matter of the request by a party to nominate an arbitrator does not
'
of itself mean that an adjudicatory decision is contemplated.
As we see it, the only function of the Chief Justice or his designate
E under Section 11 is to fill the gap left by a party to the arbitration agreement
or by the two arbitrators appointed by the parties and nominate an arbitrator.
This is to enable the arbitral tribunal to be expeditiously constituted and the
arbitration proceedings to commence. The function has been left to the Chief
Justice or his designate advisedly, with a view to ensure that the nomination
of the arbitrator is made by a person occupying high judicial office or his
F designate, who would take due care to see that a competent, independent and
impartial arbitrator is nominated.
It might be that though the Chief Justice or his designate might have
taken all due care to nominate an independent and impartial arbitrator, a
party in a given case may have justifiable doubts about that arbitrator's
G independence or impartiality. In that event it would be open to that party to
chall~nge the arbitrator under Section 12, adopting the procedure under Section
13. There is no reason whatever to conclude that the grounds for challenge ....
under Section 13 are not available only because the arbitrator has been
nominated by the Chief Justice or his designate under Section 11.
H It might also be that in a given case the Chief Justice or his designate
KONKAN RAILWAY CORPN. LTD."· RANI CONSTRUCTION PVT. LTD. [BHARUCHJ\, CJ.] 749

may have nominated an arbitrator although the period of thirty days had not A
expired. If so, the arbitral tribunal would have been improperly constituted
and be without jurisdiction. It would then be open to the aggrieved party to
require the arbitral tribunal to rule on its jurisdiction. Section 16 provides for
this. It states that the arbitral tribunal may rule on its own jurisdiction. That
the arbitral tribunal may rule "on any objections with respect to the existence
or validity of the arbitration agreement" shows that the arbitral tribunal's B
authority under Section 16 is not confined to the width of its jurisdiction, as
was submitted by learned counsel for the appellants, but goes to the very root
of its jurisdiction. There would, therefore, be no impediment in contending
before the arbitral tribunal that it had been wrongly constituted by reason of
the fact that the Chief Justice or his designate had nominated an arbitrator C
although the period of thirty days had not expired and that, therefore, it had
no jurisdiction.

The schemes made by the Chief Justices under Section 11 cannot govern
the interpretation of Section 11. If the schemes, as drawn, go beyond the
tenns of Section 11 they are bad and have to be amended. To the extent that D
the Appointment of Arbitrators by the Chief Justice of India Scheme, 1996,
goes beyond Section 11 by requiring, in clause 7, the service of a notice upon
the other party to the arbitration agreement to show cause why the nomination
of an arbitrator, as requested, should not be made, it is bad and must be
amended. The other party needs to be given notice of the request only so that
it may know of it and it may, if it so chooses, assist the Chief .Justice or his E
designate in the nomination of an arbitrator.

In conclusion, we hold that the order of the Chief Justice or his designate
under Section 11 nominating an arbitrator is not an adjudicatory order and
the Chief Justice or his designate is not a tribunal. Such an order cannot F
properly be made the subject of a petition for special leave to appeal under
Article 136. The decision of the three Judge Bench in Konkan Railway
Corporation Ltd & Ors. v. Mehul Construction Co., is affirmed.

We record our appreciation of the assistance rendered by the learned
Attorney General as Amicus Curiae.
G
In the result, the appeals are dismissed. No order as to costs.

T.N.A. Appeals dismissed.