The document discusses a Delhi High Court case that recapped the legal position on a party's failure to appoint an arbitrator within the statutory period under the Arbitration & Conciliation Act, 1996. The Court held that under Section 11(6), if one party demands the other party appoint an arbitrator and they do not do so within 30 days, their right to appoint is not automatically forfeited as long as they make the appointment before the first party files a court application. The Court found that in this case, while the respondent informed the petitioner of the arbitrator appointment after 30 days, the actual appointment date must have been before the notice was sent and thus the respondent did not forfeit their right to appoint an arbitr

1. Appointment of Arbitrator under Section 11 (6) of the Arbitration &
Conciliation Act, 1996 - Failure to appoint within 30 days – Effect-
Justice MURALIDHAR

2. • The Delhi High Court in Intuitive Tech Solutions
Pvt. Ltd. v. DLF Ltd. has recapitulated the legal
position in cases where a party fails to appoint
an arbitrator despite a request to do so by the
other party, within the statutory period as
prescribed in the Arbitration & Conciliation
Act, 1996.

3. While following the dicta laid down by the Hon'ble Supreme
Court in Datar Switchgears Limited v. Tata Finance Limited,
the Delhi High Court held as under;
11. The question whether the Respondent has forfeited its right to appoint an
Arbitrator can be answered on an analysis of the facts of the present case.
The documents placed on record show that the Petitioner's legal notice
dated 14th September 2011 invoking the arbitration clause was received
by the Respondent on 16th September 2011. However, the said notice was
not in conformity with the arbitration clause since the Petitioner proposed
that the appointment of an Arbitrator be done by the Respondent 'in
consultation' with the Petitioner. This was contrary to the express wording
of Clause 32 (b) of the Agreement. Even assuming that the notice invoking
the arbitration clause was received by the Respondent on 16th September
2011, the date of appointment of the Arbitrator by the Respondent is
significant. Although the letter of counsel for the Respondent informing
the Petitioner of the Arbitrator is dated 17th October 2011, and
dispatched on 20th October 2011, the actual decision to appoint the
Arbitrator must have been taken some time prior to the said letter dated
17th October 2011.

4. In Datar Switchgears Limited v. Tata Finance
Limited in para 19 it was observed as under:
"19. So far as cases falling under Section 11(6) are conceded such as the one
before us no time limit has been prescribed under the Act, whereas a period of 30
days has been prescribed Under Section 11(4) and Section11(5) of the Act. In our
view, therefore, so far as Section 11(6) is concerned, if one party demands the
opposite party to appoint an arbitrator and the opposite party does not make an
appointment within 30 days of the demand, the right to appointment does not get
automatically forfeited after expiry of 30 days. If the opposite party makes an
appointment even after 30 days of the demand, but before the first party has
moved the Court under Section 11, that would be sufficient. In other words, in
cases arising under Section 11(6), if the opposite party has not made an
appointment within 30 days of demand, the right to make appointment is not
forfeited but continues, but an appointment has to be made before the former
files application under Section 11 seeking appointment of an arbitrator. Only then
the right of the opposite party ceases. We do not, therefore, agree with the
observation in the above judgments that if the appointment is not made within 30
days of demand, the right to appoint an arbitrator under Section 11(6) is
forfeited." (emphasis supplied)

5. • The above decision was reiterated in Punj Lloyd
Limited v. Petronet MHB Limited and in a recent
decision dated 9th January 2012 of the Supreme
Court in Arbitration Petition No. 11 of 2011
[Denel (Proprietary Limited) v. Government of
India, Ministry of Defence]. Consequently, for the
purposes of Section 11, it requires to be seen is
whether the appointment of the Arbitrator by the
Respondent has taken place prior to the filing of
the present petition on 19th October 2011.

6. • 14. It was contended by learned counsel for the Petitioner that
since the notice dated 17th October 2011 was dispatched only on
20th October 2011 the appointment of the Arbitrator took place
after the filing of the present petition on 19th October 2011. The
above submission fails to appreciate that the actual date of
appointment of the Arbitrator by the Respondent had to be prior to
the notice dated 17th October 2011. The date of dispatch of the
letter intimating the appointment cannot `postpone' the date of
appointment. It is not possible, on the basis of the documents
placed on record, to hold that the appointment of the Arbitrator by
the Respondent took place after the filing of the present petition. In
accordance with the law explained by the Supreme Court in Datar
Switchgears Limited v. Tata Finance Limited, it is held that the
Respondent did not forfeit its right to appoint an Arbitrator in terms
of Clause 32 (b) of the Agreement.