Problems with arbitration mechanism
Arbitration and Conciliation Act 1996 is promoted as faster ADR, but it has many complicated issues. Main concern is forcing parties into arbitration when they did not consent to specific arbitrator or procedure. When clause is silent, parties approach High Court under section 11. Earlier power was treated as administrative. Now after SBP and Boghara Polyfab, it is judicial. This change was needed to prevent abuse and to ensure that only valid arbitration agreements are enforced. Without this check, litigants would face serious prejudice at very first stage.
What chief justice must decide
As per Boghara Polyfab 2009, Chief Justice or designate under section 11 must decide three things in first category. First, whether correct High Court is approached. Second, whether arbitration agreement exists. Third, whether applicant is party to that agreement. These are jurisdictional facts. If no agreement exists, there is no question of appointment. Second category issues like limitation or accord and satisfaction may be decided by court or left to tribunal. Third category issues like merits must always go to arbitrator. This approach reduces litigation at appointment stage.
Role of arbitral tribunal under section 16
Section 16 gives arbitral tribunal power to rule on its own jurisdiction including existence and validity of arbitration agreement. This is called kompetenz-kompetenz. However Supreme Court clarified that this power does not mean section 11 court can avoid deciding jurisdictional facts. If party files section 11 and other party denies agreement, court must decide first. Only when arbitration has already started before nominated tribunal, tribunal can decide under section 16. Parties can also directly approach tribunal without section 11, and then tribunal decides.
Recent judicial clarity in 2010
In A.P. Tourism v. Pampa Hotels 2010, Court followed SBP and Boghara Polyfab and held that existence of arbitration agreement must be decided by Chief Justice under section 11. In Alva Aluminium v. Gabriel India 2010, Justice Thakur again confirmed this. Prospective overruling in SBP means pre-26.10.2005 appointments are protected. Post that date, courts must apply stricter scrutiny. This gives clarity but also puts burden on courts to examine documents carefully at appointment stage.
Conclusion
Appointment of arbitrator section 11 law 2010 is now clear. Courts must verify existence of arbitration agreement and parties before appointing arbitrator, while leaving other disputes to tribunal. This protects parties from being forced into invalid arbitration. Still reforms are needed to simplify procedure and reduce delays in appointment. The law must balance party autonomy with judicial oversight to make arbitration truly effective.
