- 1 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ CIVIL MISC. PETITION NO. 930 OF 2022 BETWEEN: M/S SANTECH ENGINEERS PVT LTD REP BY ITS MANAGING DIRECTOR MR. ADITYA ATREYA HAVING ITS REGISTERED OFFICE AT 13/4, 13TH CROSS, 11TH MAIN MALLESHWARAM, BENGALURU 560 003 …PETITIONER (BY SMT. CHETANA HEGDE, ADVOCATE FOR SRI. SWAROOP ANAND R.,ADVOCATE) AND: LILY REALITY PVT LTD REP BY ITS MANAGING DIRECTOR HAVING ITS REGISTERED OFFICE AT PASHMINA WATERFRONT SITE SANNATAMMANAHALLI BATTARAHALLI OLD MADRAS ROAD BANGALORE 560049 …RESPONDENT (BY SRI. ARAVIND RAO, ADVOCATE FOR SRI.GEORGE JOSEPH., ADVOCATE) ® Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 THIS CIVIL MISCELLANEOUS PETITION UNDER SECTION.11 (5) OF THE ARBITRATION AND CONCILIATION ACT 1996 READ WITH PARAGRAPH 2 OF THE APPOINTMENT OF ARBITRATORS BY THE CHIEF JUSTICE OF KARNATAKA HIGH COURT SCHEME, 1996 PRAYING TO A) APPOINT A SOLE ARBITRATOR AND REFER THE DISPUTES RAISED BY THE PETITIONER FOR ARBITRATION, UNDER CLAUSE 1.20 OF THE AGREEMENT DATED 21/08/2013 PRODUCED AT ANNEXURE-A ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ ORAL ORDER 1. The Petitioner is before the Court seeking for the following Reliefs; a) “Appoint a sole arbitrator and refer the disputes raised by the Petitioner for Arbitration under Clause 1.20 of the Agreement dt: 21/08/2013 produced at Annexure-A. b) Pass such other and further orders as this Hon’ble Court may consider to be just and proper in the facts and circumstances of the case.” - 3 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 2. The Respondent had issued a work order on the Petitioner on 21.08.2013, which is governed by an Arbitration Clause in terms of Clause 1.20, which is reproduced hereunder for easy reference: “1.20: ARBITRATION Any dispute or difference whatsoever arising between the parties out of or relating to the construction, meaning and operation or effect of this contract or the breach thereof shail be settled by the arbitration in accordance with the rules of Arbitration of the Indian Council of Arbitration and govern under the Arbitration and conciliation Act 1996 with any modification thereof and the Award made in the pursuance thereof shall be final and binding on the parties. REAL Unless both the parties concur in the appointment of the sole Arbitration, references shall be made to three arbitrators, one to be appointed by each party within 30(Thirty) days after receipt by the other party of a written notice from the other such other, party having appointed an arbitrator before issue of the notice, and a third arbitrator to be selected with in 30 (thirty) days of the date of nomination of the second arbitrator. Place of Arbitration is Bangalore.” 3. There being certain disputes, the Petitioner had issued a notice dated 28.07.2022 under Section 21 of the Arbitration and Conciliation Act, 1996, (hereinafter referred to ‘the A&C Act’ for short) and - 4 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 appointed its Arbitrator. The said notice, though served on the Respondent, the Respondent not having agreed to the said appointment, the Petitioner had approached this Court. 4. Notice having been issued to the Respondent, the Respondent has entered appearance and filed his statement of objections. 5. The preliminary objection raised by the Respondent is that in terms of the Arbitration Clause, it is the Indian Council of Arbitration (ICA), which is required to appoint an Arbitrator. The Petitioner could not have nominated his Arbitrator or approached this Court for the appointment of an Arbitrator without following the due procedure under Clause 1.20, which has been extracted hereinabove. 6. Learned counsel for the Petitioner, by relying on the decision of the Hon'ble Apex Court in the case of - 5 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 C.M.C. Ltd., Vs. Unit Trust of India and Ors.1 submits that even if the Clause requires the conduct of the arbitration under the Rules of the Indian Council of Arbitration, this Court could still exercise powers under Section 11 of the A&C Act. Reliance is placed on para 9 of the said judgment, which is extracted hereunder for easy reference: “9. The argument that there is an incorporation of the Rules of the Council in the arbitration agreement and hence those Rules must be given effect to fully, does not take the appellant far in this case. On a true construction of the arbitration agreement, what we find is that the parties retained in themselves the right to name an arbitrator of their own, who in turn had to name a Presiding Arbitrator so as to constitute an Arbitral Tribunal. The power to appoint has not been ceded to the Indian Council of Arbitration. Once the appointments are made and the Arbitral Tribunals are constituted, the parties have also agreed that the arbitration proceedings shall be conducted in accordance with the Rules prescribed by the Indian Council of Arbitration. The provision that the proceedings shall be conducted in accordance with the Rules prescribed by the Indian Council of Arbitration does not in any manner militate against the retention of the power by the parties of appointing an arbitrator or constituting an Arbitral Tribunal. Only if there exists any inconsistency between the two provisions we would be called upon to undertake the existence of reading down one or ignoring one as ineffective or reconciling 1 (2007) 10 SCC 751 - 6 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 and giving effect to the other. Here in this case, there is no difficulty in reconciling both the clauses in the arbitration agreement. As we have noticed, resolution of disputes by way of arbitration is a matter of agreement between the parties, if while contemplating such a resolution of disputes they also retain in themselves the power to constitute an Arbitral Tribunal, it cannot be said that there is anything wrong in such a provision or that the same cannot be given effect to. Therefore, the power retained by the parties the name an arbitrator each, does not militate either against the provisions of the Act or against the Rules of the Indian Council of Arbitration. That Arbitral Tribunal once constituted in terms of the Act, may have to follow the Rules of Indian Council of Arbitration in that behalf. But as rightly pointed out by the learned Additional Solicitor General who appeared on behalf of respondent No. 1, when, an Arbitral Tribunal of persons well versed in law is constituted, surely, a proper procedure will be followed by them and there is no reason to insist on a particular procedure to be followed. But obviously, it is not a matter on which we need pronounce now. Suffice it to say, that we find no infirmity in the interpretation of the arbitration agreement by the designated Judge and in the constitution of the Arbitral Tribunal as presently constituted. We are also inclined to think that no prejudice is caused to the appellant and no injustice is involved in the constitution of the Arbitral Tribunal. We therefore affirm the order of the designated Judge and dismiss this appeal. We expect the Arbitral Tribunal to enter upon the reference without any further delay and pronounce its award within nine months of its entering upon the reference.” 7. Further reliance is placed on the decision of the Hon'ble Delhi High Court in the case of Prism - 7 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 Johnson Ltd., Vs. Doosan Power Systems India Pvt. Ltd.,2 more particularly, para 31 thereof, which is reproduced hereunder for easy reference. “31. In light of the aforesaid discussion and judgments of the Supreme Court, it is held that there was no requirement for the Petitioner to resort to Clause 25(c) of GTC to formally notify the ICA for appointment of the Arbitrator and the notice sent by the Petitioner to the Respondent on 13.09.2024, invoking arbitration agreement under Section 21 of 1996 Act is valid invocation. Existence of the arbitration agreement is not disputed by the Respondent. Respondent has clearly failed to nominate its Arbitrator in response to the notice of invocation and this confers jurisdiction on this Court to appoint the nominee Arbitrator of the Respondent.” 8. On the basis of both the above judgments, learned counsel for the Petitioner submits that irrespective of the arbitration being required to be conducted under the ICA, this Court could appoint an Arbitrator. 9. Heard Smt. Chetana Hegde, learned counsel for Sri.Swaroop Anand R., learned counsel appearing for the Petitioner, Sri Arvind Rao, learned counsel for 2 ARBP.2020/2024 dated 09.07.2025. - 8 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 Sri.George Joseph, learned counsel appearing for the respondent and perused papers. 10. There cannot be any dispute as regards the principles laid down by the Hon'ble Apex Court in CMC Ltd.'s case. But what would be required to be considered is as regards whether the arbitration agreement in the present matter is in pari materia or identical to that in that matter. The arbitration agreement in CMC Ltd.'s case has been extracted in the judgment at para 1. Para 1 is extracted hereunder for easy reference: “1. The appellant and respondent No. 1 entered into an agreement dated 23.10.1992 for a Technology Upgrade Project of the latter. The said agreement contained an arbitration clause. The same read: 20. In the event of any dispute or difference relating to the interpretation or application of any of the provision of this Agreement or as to the performance of any obligation by either party shall be settled by arbitration. Each party shall appoint an arbitrator and the arbitrators so appointed shall appoint an umpire to whom the matter on which the arbitrators disagree will be referred. The decision of the arbitrators and in the event of there being disagreement between the arbitrators, the decision of the umpire shall - 9 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 be final, conclusive and binding on the parties with respect to the matter referred to arbitration. The decision of the arbitrators or the umpire as the case may be shall constitute arbitrators award for the purpose of Indian Arbitration Act, 1940. The arbitration proceedings shall be conducted in accordance with the rules prescribed by the Indian Council of Arbitration.” 11. A perusal of Clause 20, which has been extracted above, would indicate that each party shall appoint an arbitrator, and the arbitrators so appointed shall appoint an umpire to whom the matter on which the arbitrators disagree will be referred to. The arbitration proceedings shall be conducted in accordance with the rules prescribed by the Indian Council of Arbitration. It is on that basis that the Hon'ble Apex Court held that though the arbitration is to be conducted under the rules prescribed by the Indian Council of Arbitration, the parties have retained the right for appointment of an arbitrator, and that has not been ceded to the Indian Council of Arbitration. Hence, the Hon'ble Apex Court came to - 10 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 the conclusion that in that matter Section 11 Court would have the jurisdiction to appoint an arbitrator. 12. In the decision rendered by the Hon'ble Delhi High Court in Prism Johnson Ltd’s case though the Clause was different, the Hon'ble Delhi High Court has referred to the decision in CMC Ltd’s case and come to a conclusion that irrespective of whether the arbitral proceeding is to be conducted in accordance with ICA rules or not, the High Court will continue to have powers under Section 11(6) of the A&C Act and has appointed an arbitrator. 13. I am unable to agree with the judgment of the Hon'ble Delhi High Court in respect to the same, inasmuch as the decision of the Hon'ble Supreme Court was with reference to the Clause which was under consideration before the Hon'ble Supreme Court which as extracted above would indicate that the party autonomy to appoint an arbitrator had - 11 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 been retained by the parties and not ceded to the arbitral institution namely the ICA whereas in the Clause subject matter of the proceedings before the Hon'ble Delhi High Court, the parties had categorically agreed that the arbitration proceedings have to be held under the Commercial Arbitration Rules of the United Kingdom Commercial Arbitration Board and then the same came to be amended with the said clause being replaced namely the Commercial Arbitration Rules of the United Kingdom, Commercial Arbitration Board was replaced with the Rules of Arbitration of the Indian Council of Arbitration. 14. Clause No.25, which is the subject matter of the proceedings before the Hon’ble Delhi High Court, did not provide for each of the parties to appoint an arbitrator. But the arbitrator has to be appointed in terms of the rules of the Indian Council of Arbitration. - 12 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 15. In the present case, Clause No.1.20 has been extracted hereinabove, which clearly and categorically mandates that the arbitration shall be carried out and that the dispute shall be settled by arbitration in accordance with the rules of the arbitration of the Indian Council of Arbitration. That being the case, the appointment of an Arbitrator and the proceedings of Arbitration would be by way of an institutional arbitration under the Indian Council of Arbitration. There is no party autonomy, which is provided under the agreement for the appointment of an Arbitrator. Hence, I pass the following: ORDER i). CMP is dismissed. ii). Liberty is reserved to the Petitioner to approach the Indian Council of Arbitration for the appointment of an Arbitrator. - 13 - HC-KAR NC: 2025:KHC:51547 CMP No. 930 of 2022 iii). The petitioner shall be entitled to the benefit of Section 14 of the Limitation Act for the time spent in prosecuting the above matter. Sd/- (SURAJ GOVINDARAJ) JUDGE KTY List No.: 1 Sl No.: 15