Supreme Court refuses to appoint an arbitrator in international commercial arbitrations with a foreign seat

Brief Facts

Mankastu Impex Private Limited (“Petitioner”), incorporated in India, and Airvisual Limited (“Respondent”), incorporated in Hong Kong, entered into a memorandum of understanding (“MoU”), which provided for arbitration by a sole arbitrator. The arbitration clause stipulated that the governing law of the MoU would be laws of India and the “place of arbitration” will be Hong Kong.

When disputes arose between the parties, the Petitioner sent a notice of arbitration to the Respondent proposing the appointment of Hon’ble Mr. Justice R.C. Chopra as the sole arbitrator. The Respondent, however, disagreed with this approach and stated that the arbitration should be referred to an arbitration institution in Hong Kong and that such institution would be responsible for constitution of the arbitration tribunal. Given the disagreement between the parties over constitution of the tribunal, the Petitioner filed a petition (“Petition”) under Section 11(6) read with Section 11(9) of the Arbitration and Conciliation Act, 1996 (“Act”) before the Supreme Court (“Court”). In the Petition, the Petitioner prayed for appointment of an arbitrator.

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