Legal Analysis: Appointment of Sole Arbitrator Under 1996 Act

In a recent legal case, the court delved into the intricacies of appointing a Sole Arbitrator under the 1996 Act. The focus was on the absence of provisions for raising counter-claims under the MSMED Act and the agreement between parties to refer all disputes under the 1996 Act. The court’s rationale for appointing a Sole Arbitrator in this particular case sheds light on the legal analysis at play. Let’s dive deeper into the complexities of arbitration and legal proceedings.


  • Disputes arose regarding claims raised by the Contractor which led to a legal notice seeking payment of outstanding dues.
  • Respondent filed a Petition under Section 11(6) of the 1996 Act for appointment of arbitrator as per the Development Agreement.
  • High Court observed no provision under the MSMED Act for reference of counter-claims to the Facilitation Council.
  • Appellant registered under the MSMED Act and filed for dispute resolution before the Facilitation Council.
  • Sections 15 to 18 of the MSMED Act allow reference of disputes by a contractor registered under the Act.
  • No provision in the MSMED Act to handle counter-claims against the supplier-contractor.
  • Respondent invoked arbitration under Clause 20 of the Agreement and nominated its arbitrator.
  • Contractor directed to appoint an arbitrator after the Respondent’s nomination.
  • Appellant-Contractor challenged the order before the Court through a Special Leave Petition.
  • Parties agreed to have their disputes resolved under the Arbitration & Conciliation Act by a Court-appointed Sole Arbitrator.
  • Civil Appeal filed by the Appellant-Contractor to challenge the Order of the Madras High Court.
  • High Court’s view on the absence of provision for raising counter-claims under the MSMED Act.
  • Agreement between parties to refer all disputes under the 1996 Act.
  • Rationale for appointing an arbitrator in this particular case.

Also Read: Analysis of Consent Orders and Appellants’ Rights


  • Justice K. Kannan, former Judge of the Madras High Court, appointed as Sole Arbitrator.
  • Appointment subject to Declarations under Section 12 of the Arbitration and Conciliation Act, 1996.
  • Pending applications disposed off.
  • Arbitration will be conducted by a three-member tribunal instead of a sole arbitrator as per the agreement.
  • Arbitration to be in accordance with the Arbitration and Conciliation Act, 1996.
  • Arbitral proceedings to be conducted by the Madras High Court Arbitration Centre.
  • Application under the MSMED Act by the Appellant-Contractor closed by Facilitation Council, Pune.
  • Appeal disposed of according to the aforementioned terms.

Also Read: Limits of Discretion in Civil Service Examination Policy


Case Number: C.A. No.-000692-000692 / 2021

Click here to read/download original judgement

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