Supreme Court of India
HINDUSTAN COPPER LTD.versusMONARCH GOLD MINING CO. LTD.
- Citation
- 2012 INSC 466
- Decided
- 11 October 2012
- Disposal
- Appeal(s) allowed
- Bench
- RAJENDRA MAL LODHA
Holding
A two‑tier, piecemeal consideration of an application under Section 11(6) is impermissible; the entire application must be decided by either the Chief Justice (or his designate) or the Designate Judge in a single adjudicatory proceeding.
Summary
The Supreme Court examined the procedure followed by the Calcutta High Court in handling applications under Section 11(6) of the Arbitration and Conciliation Act, 1996 for the appointment of arbitrators. The High Court had a Designate Judge first determine that the request for appointment was proper and then referred the matter to the Chief Justice’s delegate for the actual appointment, creating a two‑tier process. The Court held that such piecemeal consideration is not authorized by Section 11, which requires the entire application to be dealt with by either the Chief Justice (or his designate) or the Designate Judge in a single adjudicatory act. It overruled the earlier Calcutta High Court decision in Modi Korea Telecommunication Ltd. that distinguished between the procedure and the appointment itself. Consequently, the impugned orders were set aside, the arbitration petitions were restored to the High Court for proper consideration, and the appeals were allowed in part.
Issues considered
- The applicability of Section 11(6) of the Arbitration and Conciliation Act, 1996 to a two‑tier procedure involving a Designate Judge and the Chief Justice.
- Whether the Calcutta High Court's practice of piecemeal consideration of arbitration appointment applications is permissible.
- The nature of the power conferred on the Chief Justice under Section 11(6) – judicial or administrative.
- The validity of the distinction drawn in Modi Korea Telecommunication Ltd. between the procedure for appointment and the actual appointment of an arbitrator.
Legislation cited
- Arbitration and Conciliation Act, 1996s. 11, s. 14
- High Court Act, 1861s. 14
Subjects
ArbitrationSection 11 appointmentDesignate JudgeChief JusticePiecemeal considerationJudicial powerProcedural law
Judgment
[2012] 9 S.C.R. 293
HINDUSTAN COPPER LTD. A
v.
MONARCH GOLD MINING CO. LTD.
(Civil Appeal No. 7449 of 2012)
OCTOBER 11, 2012
B
[R.M. LODHA AND ANIL R. DAVE, JJ.]
ARBITRATION AND CONCILIATION ACT, 1996:
s. 11 (6) - Application for appointment of arbitrator - c
Designate Judge holding that the request for appointment of
arbitrator was proper, and then referring the matter to the
Delegate of Chief Justice for appointment of arbitrator - Held:
The procedure that is being followed by the High Court with
regard to the consideration of the applications uls 11 is legally D
impermissible - The piecemeal consideration of the
application u/s 11 by the Designate Judge and another
Designate Judge or the Chief Justice, as the case may be,
is not contemplated bys. 11 - The function of the Chief Justice
or Designate Judge in consideration of the application u/s 11 E
is judicial and such application has to be dealt with in its
entirety by either Chief Justice himself or the Designate Judge
and not by both by making it a two-tier procedure - The
distinction drawn by the High Court in Modi Korea
Telecommunications Ltd. between the procedure for
appointment of arbitrator and the actual appointment of the F
arbitrator is not at all well founded.
The procedure adopted by the Calcutta High Court
in the applications uls 11 of the Arbitration and
Conciliation Act, 1996, namely, the Designate Judge first G
passed an order that the request for appointment of
arbitrator was proper and then ordered that the
application be referred to the Delegate of the Chief
Justice for appointment of an arbitrator, was in issue in
293 H
294 SUPREME COURT REPORTS [2012] 9 S.C.R.
A the instant appeals. In C.A. No. 7449 of 2012 the Court felt
that the views of the Registrar General, Calcutta High
Court were necessary as the issue involved was whether
an application u/s. 11 (6) of the Act for appointment of an
arbitrator cold be considered in piecemeal by two
B Designate Judges. On behalf of the Registrar General of
the High Court it was pleaded that it was permissible that
the Designate Judge considered the general power of the
court to determine whether the pre-conditions for the
exercise of that power have been fulfilled leaving the
c power of naming the arbitrator u/s 11 to the exclusive
jurisdiction of the Chief Justice and this was in
conformity with the Division Bench decision of the
Calcutta High Court in Modi Korea Telecommunication's
case.
D Allowing the appeals in part, the Court
HELD: 1.1 The majority in SBP & Co.* held that
looking at the scheme of the Arbitration and Conciliation
Act, 1996 as a whole and the object with which it was
E enacted, it seemed proper to view the conferment of
power on the chief justice as a conferment of judicial
power to decide on the existence of the conditions
justifying the constitution of an arbitral tribunal. It was
also observed that the power had been conferred u/s
F 11 (6) on the highest judicial authority in their capacities
as Chief Justices to pass an order contemplated u/s 11
of the Act. [para 15] [306-F-G; 307-A]
SBP & Co. v. Patel Engineering Ltd. and another 2005
(4) Suppl. SCR 688 =2005 (8) SCC 618 - followed.
G
Konkan Railway Corporation Limited & Ors. v. Mehul
=
Construction Company 2000 (2) Suppl. SCR 563 2000 (7)
SCC 201; and Konkan Railway Corporation Limited & Anr.
v. Rani Construction (P) Ltd. 2002 (1) SCR 728 =
2002 (2)
H
HINDUSTAN COPPER LTD. v. MONARCH GOLD 295
MINING CO. LTD.
sec 388 - stood overruled. A
1.2 The exposition of law by a seven-Judge Bench
of this Court in SBP & Co., leaves no manner of doubt
that the procedure that is being followed by the Calcutta
High Court with regard to the consideration of the 8
applications uls 11 of the 1996 Act is legally
impermissible. The piecemeal consideration of the
application uls 11 by the Designate Judge and another
Designate Judge or the Chief Justice, as the case may
be, is not contemplated by s. 11. The function of the Chief C
Justice or Designate Judge in consideration of the
application uls 11 is judicial and such application has to
be dealt with in its entirety by either the Chief Justice
himself or the Designate Judge and not by both by
making it a two-tier procedure. The distinction drawn by
the Division Bench of Calcutta High Court in Modi Korea D
Telecommunications Ltd.* between the procedure for
appointment of arbitrator and the actual appointment of
the arbitrator is not at all well founded. Modi Korea
Telecommunications Ltd. to the extent it is inconsistent
with SBP & Co. stands overruled. [para 17] [309-F-H; 310- E
A-B
*Modi Korea Telecommunication Ltd. v. Appcon
Consultants Pvt. Ltd. 1999 (II) Cal. H.C. Notes 107 - stands
overruled F
1.3 The impugned orders are set aside. The
arbitration petitions are restored to the file of the High
Court for appropriate consideration. It is, however,
clarified that the orders passed by the Chief Justice or the
Designate Judge uls 11 of the 1996 Act which haye G
attained finality and the awards pursuant to such orders
shall remain unaffected. [para 18-19] [310-C-D]
Case Law Reference:
1999 (II) Cal. H.C. Notes 107 stand overruled para 9 H
296 SUPREME COURT REPORTS [2012) 9 S.C.R.
A 2005 (4) Suppl. SCR 688 followed para 13
2000 (2) Suppl. SCR 563 stood overruled Para 14
2002 (1) SCR 728 stood overruled Para 14
B CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7449 of 2012.
From the Judgment and Order dated 09.06.2011 of the
High Court of Calcutta in AP No. 568 of 2010.
WITH
c
C.A. No. 7450 of 2012.
Gourab Banerji, ASG, Jaideep Gupta, Deba Prasad
Mukherjee, Nandini Sen, Soumya Chakraborty (For Dharam Bir
D Raj Vohra), Amit Kumar, G.S. Chatterjee, Raja Chatterjee,
Sachin Das, Anip Sachthey, Mohit Paul, Shagun Matta, Sumit
Goel, Utsav Trivedi (For Parekh & Co.) for the Appearing
Parties.
The Judgment of the Court was delivered by
E
R.M. LODHA , J . 1. Leave granted in both matters.
2. These appeals have raised the question about the
procedure that is being followed by Calcutta High Court in
consideration of the applications under Section 11 of the
F Arbitration and Conciliation Act, 1996 (for short, '1996 Act').
3. When the special leave petition filed by M/s. Choudhury
Construction came up for consideration before the Bench, the
learned counsel for the petitioner submitted that the procedure
G adopted by the Designate Judge while hearing petition under
Section 11 of 1996 Act was unknown in law and not sanctioned
by Section 11 inasmuch as although the Designate Judge has
held that there are live disputes between the parties which have
to be resolved through arbitration, yet the matter has been
H ordered to be placed before the Chief Justice for appointment
HINDUSTAN COPPER LTD. v. MONARCH GOLD 297
MINING CO. LTD. [R.M. LODHA, J.]
of the arbitrator. In light of the submission made by the learned A
counsel, Registrar General, Calcutta High Court was ordered
to be impleaded as party respondent.
4. In the matter of Hindustan Copper Limited, by an order
dated 18.7.2012 this Court felt that the views of the Registrar
8
General, Calcutta High Court were necessary as the issue
involved was whether an application under Section 11 (6) of the
1996 Act for appointment of an arbitrato.r could be considered
in piecemeal by two Designate Judges.
5. In the matter of Hindustan Copper Limited, one C
Designate Judge first passed the order on 9.6.2011 holding
that the request for appointment of the arbitrator was proper
and then ordered that the application should be referred to
Hon'ble Delegate of the Chief Justice for appointment of an
arbitrator. The relevant part of the order dated 9.6.2011 reads D
as under:
"Therefore, the request for appointment of arbitrator was
proper. There is an arbitral dispute between the parties,
as held above.
E
I also notice that the petitioner have not appointed their
arbitrator, which they ought to have done by this time.
Therefore, in the circumstances, I think this application
should be referred to the Hon'ble delegate of the Hon'ble
the Chief Justice for appointment of an arbitrator/arbitrators F
to adjudicate the disputes between the parties as
mentioned in the letter of the petitioner dated 28th
December, 2009. I order accordingly."
6. In pursuance of the order dated 9.6.2011, the matter G
came up before another Designate Judge and he appointed
the arbitrator by an order dated 8. 7.2011. The following order
reads as under:
"It appears from the order dated 9th June, 2011 passed
by a learned Judge of this Court that His Lordship has H
298 SUPREME COURT REPORTS [2012] 9 S.C.R.
A already found that there exists an arbitration agreement
between the parties and the dispute involved herein is
covered by the said agreement.
In viev; of such fact, I, in exercise of power conferred under
section 11 (6) of the Arbitration & Conciliation Act, 1996
B
appoint Sri Rudrendra Nath Banerjee, a retired Judge of
this Court as the Arbitrator on the fees of Rs. 15,000/- for
each sitting."
7. In the appeal of M/s. Choudhury Construction, the
C Designate Judge on 6.9.2011 passed the following order:
"The State does not dispute the existence of the arbitration
agreement but says that matters specifically excepted by
the agreement cannot be made the subject matter of any
D arbitral reference. If there is any excepted matter which is
raised by the petitioner as claimant, it will be open to the
State to object thereto, inter alia, under Section 16 of the
Arbitration and Conciliation Act, 1996. Since it appears
that there are live disputes to go to arbitration and the
parties have failed to agree in the composition of the
E
arbitral tribunal, AP No. 394 of 2009 is directed to be
placed before the Hon'ble Designate of the Hon'ble The
Chief Justice for constitution of an arbitral tribunal in
accordance with the agreement between the parties to
adjudicate upon the disputes covered thereby. There will
F be no order as to costs.
8. We have heard Mr. Gourab Banerji, learned senior
counsel for the appellant - Hindustan Copper Limited, Mr.
Soumya Chakraborty, learned counsel for the appellant - M/s.
G Choudhury Construction, Mr. Amit Kumar, learned counsel for
Respondent No. 1- Monarch Gold Mining Co. Ltd., Mr. Anip
Sachthey, learned counsel for the State of West Bengal and
Mr. Jaideep Gupta, learned senior counsel for the Registrar
General, Calcutta High Court.
H
HINDUSTAN COPPER LTD. v. MONARCH GOLD 299
MINING CO. LTD. [R.M. LODHA, J.]
9. Mr. Jaideep Gupta, learned senior counsel for the A
Registrar General, High Court, would submit that Section 11
of the 1996 Act did not put any embargo for piecemeal
consideration of the matter. According to him, it is permissible
that the Designate Judge considers the general power of the
court to determine whether the pre-conditions for the exercise 8
of that power have been fulfilled leaving the power of naming
the arbitrator under Section 11 to the exclusive jurisdiction of
the Chief Justice. He submits that this is in conformity with the
Division Bench decision of the Calcutta High Court in Modi
Korea Telecommunication Ltd. v. Appcon Consultants Pvt. c
Ltd. 1•
10. Section 11 of 1996 Act provides for the appointment
of arbitrators. It reads as under:
"S. 11. Appointment of arb:trators.-(1) A person of any D
nationality may be an arbitrator, unless otherwise agreed
by the parties.
(2) Subject to sub-section (6), the parties are free to agree
on a procedure for appointing the arbitrator or arbitrators. E
(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 G
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
1. 1999 (II) Cal. H.C. Notes 107. H
300 SUPREME COURT REPORTS [2012) 9 S.C.R.
A third 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.
B
(5) Failing any agreement referred to in sub-section (2),
in an arbitration with a sole arbitrator, if the parties fail to .
agree on the arbitrator within thirty days from receipt of a
request by one party from the other party to so agree the
c 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
D by the parties, -
(a) a party fails to act as required under that
procedure; or
(b) the parties, or the two appointed arbitrators, fail
E to reach an agreement expected of them under that
procedure; or
(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
F
or any person or institution designated by him to
take the necessary measure, unless the agreement
on the appointment procedure provides other
means for securing the appointment.
G (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.
(8) The Chief' Justice or the person or institution
H
HINDUSTAN COPPER LTD. v. MONARCH GOLD 301
MINING CO. LTD. [R.M. LODHA, J.]
designated by him, in appointing an arbitrator, shall have A
due regard to -
(a) any qualifications required of the arbitrator by
the agreement of the parties; and
(b) other considerations as are likely to secure the B
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 c
of India or the person or institution designated by him may
appoint an arbitrator of a nationality other than the
nationalities of the parties where the parties belong to
different nationalities.
(10) The Chief Justice may make such scheme as he may D
deem appropriate for dealing with matters entrusted by
sub-section (4) or sub-section (5) or sub-section (6) to him.
(11) Where more than one request has been made under
sub-section (4) or sub-section (5) or sub-section (6) to the E
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.
(12) (a) Where the matters referred to in sub-sections (4),
F
(5), (6), (7), (8) and (10) arise in an international
commercial arbitration, the reference to "Chief Justice" in
those sub-sections shall he construed as a reference to
the "Chief Justice of India."
G
(b) Where the matters referred to in sub-sections (4), (5),
(6), (7), (8), and (10) 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
H
302 SUPREME COURT REPORTS [2012] 9 S.C.R.
A Court within whose local limits the principal Civil Court
referred to in clause (e) of sub-section (1) 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
Court."
B
11. The Division Bench of the Calcutta High Court in Modi
Korea Telecommunication Ltd.1 was concerned with the
question of the jurisdiction of a Single Judge who has been
given the power for determination to entertain, hear and
dispose of arbitration matters under Section 11 of the 1996
C Act. The Division Bench dealt with the scheme of the 1996 Act,
particularly, with reference to Sections 5,8,11,16 and 37(1). In
the opinion of the Division Bench, Section 11 makes a
distinction between the procedure for appointment of arbitrator
and the actual appointment of the arbitrator. Keeping that
D distinction in mind, the Division Bench proceeded to consider
the matter thus:
"48 ...... Under section 11 (2) parties can agree on the
procedure for appointing the arbitrator. If there is no such
E agreement on the procedure section 11 (3) prescribes the
procedure to be followed. When the arbitration is to be of
three arbitrators, section 11 (3) provides that "each party
shall appoint one arbitrator and the two appointed
arbitrators shall appoint a third arbitrator who shall act as
the presiding arbitrator". If a party fails to appoint an
F
arbitrator within 30 days from the receipt of request to do
so from the other party or the two appointed arbitrators fail
to agree on the third arbitrator within 30 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
G
institute designated by him under sub-section (4) of section
11.
49. Section 11 (5) similarly provides that in the case of the
arbitration with a sole arbitrator if the parties fail to agree
H on the arbitrator within 30 days from the receipt of the
HINDUSTAN COPPER LTO. v. MONARCH GOLD 303
MINING CO. LTD. [R.M. LODHA, J.]
request by one party from the other to do so, the A
appointment shall be made, upon request of a party by the
Chief Justice or any person or institute designated by him.
Section 11 (6) deals with a situation where the appointmen~
procedure has been agreed upon but there is non
compliance of the agreed procedure. In this case also any B
party may request "the Chief Justice or any person or
institute designated by him" to take the necessary
measures unless the agreement on the appointment
provides other means for securing the appointment.
50. A decision on the matter entrusted by sub-sections (4), C
(5) and (6) to the Chief Justice or any person or institute
designated by him is final by virtue of section 11 (7).
Section 11 (8) provides for considerations to which regard
should be had before such power of appointment is
exercised. Section 11 (9) deals with International D
Commercial Arbitrations where the Chief Justice of India
or any person or institute designated by him is given the
powers of appointment. Section 11 (11) deals with a
situation where several requests are made to the Chief
Justices of different High Courts or their designates. E
Section 11 (12)(a) extends the operation of sub-sections
(4), (5), (6), (7), (8) and (10) to International Commercial
Arbitrations giving power of appointment to the Chief
Justice of India in place of Chief Justice of the High Court.
Section 11 (12)(b) clarifies that the reference to Chief F
Justice means the Chief Justice of the appropriate High
Court.
51. What does "appointment" mean-is it only limited to
naming or does it include the adjudicatory process as to G
whether appointment should be made?
52. It is clear from a reading of section 11 that the word
"appoint" has been used in section 11 to mean nomination
or designation. Thus parties may appoint or name their
H
304 SUPREME COURT REPORTS [2012] 9 S.C.R.
A arbitrator under Section 11 (2), (3) and (4). The parties do
not, in appointing an arbitrator, do more than name or
designate him.
53. The power which has been conferred exclusively under
section 11 on the Chief Justice is the power of
B
appointment or the power to name an arbitrator. The Chief
Justice may, if he so chooses, designate some other
person or institute to exercise this power.
54. This power is\ to be distinguished from the general
c power of a court to determine whether the pre-conditions
for the exercise of that power have been fulfilled. This is a
judicial act. The bifurcation between the two powers has
been recognized in the unreported decision of Harihar
Yadav v. Durgapur Projects Ltd. (supra) when it was said:
D
"Undoubtedly the appointment of an arbitrator, on
an aprlication made by one of the parties involves
a decision making process comprising the twin vital
components and elements of consideration with
regard to the points in issue, or the points of
E
controversy between the parties and the actual act
of appointment of the arbitrator. The act of actual
appointment of an arbitrator has always to be
preceded by a consideration as to whether in the
facts and circumstances of the case the arbitrator
F in fact is required to be appointed or not. It is not
only after this issue is resolved that the question of
appointment of an arbitrator arises."
55. Given the definition of the word 'appointment', in our
G view, section 11 does not say that the Chief Justice could
alone exercise the general power of judicially determining
whether the pre-conditions for such appointment have
been fulfilled. To hold otherwise would, not only be contrary
td the express language of the section, but it would also
H mean that the Chief Justice could by designation clothe any
HINDUSTAN COPPER LTD. v. MONARCH GOLD 305
MINING CO. LTD. [R.M. LODHA, J.]
person or institution with the power to discharge judicial A
functions.
56. Besides the legislature could not have intended to
burden either the Chief Justice of India (in connection with
all international arbitrations) or the Chief Justice of a High B
Court (in connection with all domestic arbitrations) to be
saddled with the impracticable task of determining the
existence of the preconditions for appointment of an
arbitrator/arbitrators in all cases nor to empower the Chief
Justice with the power to clothe any person or authority of C
his choice with the discharge of judicial functions
exercisable by Courts. In facts section 11 does not say
anything on the matter.
57. In our view such judicial determination is to be
exercised only by a Court. A Court has been defined in D
section 2(e) of the Act as:
"(e) 'Court' means the principal Civil Court of
original jurisdiction in a district, and includes the
High Court in exercise of its ordinary Civil E
Jurisdiction, having jurisdiction to decide the
question forming the subjectmatter of the reference
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
F
of Small Causes."
12. The Division Bench then considered Section 14 of the
High Court Act, 1861, Clause 36 of the Letters Patent, Chapter
V Rule 1 of the Original Side Rules and Article 225 of the
Constitution of India and in paragraph 64 of the Report G
concluded as under:
"64. Pursuant to this power the Chief Justice has allocated
the business of hearing matters pertaining to arbitrations
to a Learned Single Judge. It is for that Learned Single H
306 SUPREME COURT REPORTS [2012] 9 S.C.R.
A Judge to exercise the general power referred to earlier,
leaving the power of naming the arbitrator under section
11 to the exclusive jurisdiction of the Chief Justice."
13. We find merit in the submission of Mr. Gourab Banerji,
B learned senior counsel for one of the appellants that the view
taken by the Division Bench of Calcutta High Court in Modi
Korea Telecommunication Ltd. 1 is completely knocked out by
a majority decision of this Court in SBP & Co. v. Patel
Engineering Ltd. and another2.
c 14. In SBP & Co. 2 , a seven-Judge Bench of this Court was
concerned with the question in relation to the nature of function
of Chief Justice or his designate under Section 11 of the 1996
Act. The necessity to consider the said question arose as a
three-Judge Bench of this Court in Konkan Railway
D Corporation Limited & Ors. v. Mehul Construction Company3,
as approved by a five-Judge Bench of this Court in Konkan
Railway Corporation Limited & Anr. v. Rani Construction (P)
Ltd., 4 had taken the view that the function of the Chief Justice
or his Designate under Section 11 was purely an administrative
E function; it was neither judicial nor quasi judicial and the Chief
Justice or his nominee performing the function under Section
11 (6) cannot decide any contentious issues between the
parties.
F 15. The majority in SBP & Co. 2 held that looking at the
scheme of the 1996 Act as a whole and the object with which
it was enacted, it seemed proper to view the conferment of
power on the chief justice as a conferment of judicial power to
decide on the existence of the conditions justifying the
G constitution of an arbitral tribunal. In the majority judgment, it was
also observed that the power had been conferred under Section
11 (6) on the highest judicial authority in their capacities as Chief
2. c2oos) 8 sec 618.
3. c2000) 7 sec 201.
H 4. c2002) 2 sec 388.
HINDUSTAN COPPER LTD. v. MONARCH GOLD 307
MINING CO. LTD. [R.M. LODHA, J.]
Justices to pass an order contemplated under Section 11 of A
the Act. In paragraphs 42 to 44 of the Report (pg. 662-663),
the majority in SBP & Co.2 held as under :
"42. In our dispensation of justice, especially in respect of
matters entrusted to the ordinary hierarchy of courts or
8
judicial authorities, the duty would normally be performed
by a judicial authority according to the normal procedure
of that court or of that authority. When the Chief Justice of
the High Court is entrusted with the power, he would be
entitled to designate another Judge of the High Court for
exercising that power. Similarly, the Chief Justice of India C
would be in a position to designate another Judge of the
Supreme Court to exercise the power under Section 11 (6)
of the Act. When so entrusted with the right to exercise
such a power, the Judge of the High Court and the Judge
of the Supreme Court would be exercising •he power D
vested in the Chief Justice of the High Court or i. the Chief
Justice of India. Therefore, we clarify that the Chief Justice
of a High Court can delegate the function under Section
11 (6) of the Act to a Judge of that Court and he would
actually exercise the power of the Chief Justice conferred E
under Section 11 (6) of the Act. The position would be the
same when the Chief Justice of India delegates the power
to another Judge of the Supreme Court and he exercises
that power as designated by the Chief Justice of India.
F
43. In this context, it has also to be noticed that there is
an ocean of difference between an institution which has
no judicial functions and an authority or person who is
already exercising judicial power in his capacity as a
judicial authority. Therefore, only a Judge of the Supreme G
Court or a Judge of the High Court could respectively be
equated with the Chief Justice of India or the Chief Justice
of the High Court while exercising power under Section
11 (6) of the Act as designated by the Chief Justice. A non-
judicial body or institution cannot be equated with a JudQe H
308 SUPREME COURT REPORTS [2012] 9 S.C.R.
A of the High Court or a Judge of the Supreme Court and it
has to be held that the designation contemplated by
Section 11 (6) of the Act is not a designation to an
institution that is incompetent to perform judicial functions.
Under our dispensation a nonjudicial authority cannot
B exercise judicial powers.
44. Once we arrive at the conclusion that the proceeding
before the Chief Justice while entertaining an application
under Section 11 (6) of the Act is adjudicatory, then
obviously, the outcome of that adjudication is a judicial
c order. Once it is a judicial order, the same, as far as the
High Court is concerned would be final and the only avenue
open to a party feeling aggrieved by the order of the Chief
Justice would be to approach the Supreme Court under
Article 136 of the Constitution. If it were an order by the
0 Chief Justice of India, the party will not have any further
remedy in respect of the matters covered by the order of
the Chief Justice of India or the Judge of the Supreme
Court designated by him and he will have to participate in
the arbitration before the Tribunal only on the merits of the
E claim. Obviously, the dispensation in our country, does not
contemplate any further appeal from the decision of the
Supreme Court and there appears to be nothing
objectionable in taking the view that the order of the Chief
Justice of India would be final on the matters which are
F within his purview, while called upon to exercise his
jurisdiction under Section 11 of the Act. It is also necessary
to notice in this context that this conclusion of ours would
really be in aid of quick disposal of arbitration claims and
would avoid considerable delay in the process, an object
G that is sought to be achieved by the Act."
16. In paragraph 47 (pg. 663) of the Report, this Court in
SBP & Co. 2 summed up its conclusions. To the extent they are
relevant, the conclusions read as under:
H "47. (i) The power exercised by the Chief Justice of the
HINDUSTAN COPPER LTD. v. MONARCH GOLD 309
MINING CO. LTD. [R.M. LODHA, J.]
High Court or the Chief Justice of India under Section 11 (6) A
of the Act is not an administrative power. It is a judicial
power.
(ii) The power under Section 11 (6) of the Act, in its entirety,
could be delegated, by the Chief Justice of the High Court B
only to another Judge of that Court and by the Chief
Justice of India to another Judge of the Supreme Court.
(iii) In case of designation of a Judge of the High Court or
of the Supreme Court, the power that is exercised by the
designated Judge would be that of the Chief Justice as C
conferred by the statute.
(iv) The Chief Justice or the designated Judge will have
the right to decide the preliminary aspects as indicated in
the earlier part of this judgment. These will be his own D
jurisdiction to entertain the request, the existence of a valid
arbitration agreement, the existence or otherwise of a live
claim, the existence of the condition for the exercise of his
power and on the qualifications of the arbitrator or
arbitrators. The Chief Justice or the designated Judge E
would be entitled to seek the opinion of an institution in the
matter of nominating an arbitrator qualified in terms of
Section 11 (8) of the Act if the need arises but the order
appointing the arbitrator could only be that of the Chief
Justice or the designated Judge." F
17. The exposition of law by a seven-Judge Bench of this
Court in SBP & Co.2 , leaves no manner of doubt that the
procedure that is being followed by the Calcutta High Court with
regard to the consideration of the applications under Section
11 of the 1996 Act is legally impermissible. The piecemeal G
consideration of the application under Section 11 by the
Designate Judge and another Designate Judge or the Chief
Justice, as the case may be, is not contemplated by Section
11. The function of the Chief Justice or Designate Judge in
consideration of the application under Section 11 is judicial and H
310 SUPREME COURT REPORTS [2012] 9 S.C.R.
A such application has to be dealt with in its entirety by either
Chief Justice himself or the Designate Judge and not by both
by making it a two-tier procedure as held in Modi Korea
Telecommunications Ltd. 1 . The distinction drawn by the
Division Bench of Calcutta High Court in Modi Korea
B Telecommunications Ltd. 1 between the procedure for
appointment of arbitrator and the actual appointment of the
arbitrator is not at all well founded. Modi Korea
Telecommunications Ltd. 1 to the extent it is inconsistent with
SBP & Co. 2 stands overruled.
c 18. In view of the above, the impugned orders are set
aside. The arbitration petitions are restored to the file of the
High Court for appropriate consideration, as noted above. The
appeals are allowed to the above extent. No order as to costs.
D 19. It is, however, clarified that orders passed by the Chief
Justice or the Designate Judge under Section 11 of the 1996
Act which have attained finality and the awards pursuant to such
orders shall remain unaffected insofar as the above aspect is
concerned.
E
R.P. Appeals partly allowed.
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