DENEL (PROPRIETARY LIMITED) versus BHARAT ELECTRONICS LTD. & ANR.

DENEL (PROPRIETARY LIMITED) versus BHARAT ELECTRONICS LTD. & ANR.

Due to the peculiar facts of the case, the Managing Director of a Government Company (respondent) may not be able to independently adjudicate the dispute, being bound by ministry directions; therefore, an arbitrator other than the Managing Director should be appointed in the interest of both parties and to do complete justice.

Parties
Petitioner: DENEL (PROPRIETARY LIMITED); Respondent: Bharat Electronics Ltd.; Respondent: Ministry of Defence, Government of India
Jurisdiction
India
Judgment Date
10 May 2010
Procedural Posture
Arbitration Petition / Petition Under Section 11(6) of Arbitration and Conciliation Act, 1996 for Appointment of Arbitrator
Outcome
Arbitration Petition allowed
Legal Topics
Appointment of Arbitrator, Independent Arbitrator, Enforcement of Arbitration Clause
Arbitration Appointment of Arbitrator Independent Arbitrator Enforcement of Arbitration Clause

Case Brief

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Parties

DENEL (PROPRIETARY LIMITED)

Petitioner

Bharat Electronics Ltd.

Respondent

Ministry of Defence, Government of India

Respondent

Procedural Posture

Arbitration Petition / Petition Under Section 11(6) of Arbitration and Conciliation Act, 1996 for Appointment of Arbitrator

Legal Issues

  1. 1 Whether the appointment of Managing Director of respondent company as arbitrator under the arbitration clause is valid in the circumstances of the case.
  2. 2 Whether an independent arbitrator should be appointed instead of the named arbitrator due to directions by Ministry of Defence.

Ratio Decidendi

Due to the peculiar facts of the case, the Managing Director of a Government Company (respondent) may not be able to independently adjudicate the dispute, being bound by ministry directions; therefore, an arbitrator other than the Managing Director should be appointed in the interest of both parties and to do complete justice.

Court Disposition

Arbitration Petition allowed

Orders

  • Hon'ble Dr. Justice Arijit Pasayat (Retired) appointed as sole arbitrator.
  • Arbitrator has liberty to fix own remuneration and terms and conditions.