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CS Professional · Arbitration, Mediation and Conciliation · Arbitration Procedure, Appointment of an Arbitrator and Other Aspects

A supply contract between Mehta Steels (Mumbai) and Kavya Engineering (Chennai) states that disputes shall be decided by a tribunal of two arbitrators, one chosen by each party. Which statement best reflects the Act?

The clause does not conform to the Act. Section 10(1) allows parties freedom to fix the number of arbitrators, but the number shall not be an even number, so a tribunal of two arbitrators is not permitted.

  1. AThe clause is valid because the parties are free to choose any number
  2. BThe clause is valid only if the two arbitrators appoint a third
  3. CThe clause fails to meet the requirement that the number of arbitrators shall not be evenCorrect
  4. DThe clause is converted automatically into a sole arbitrator under Section 10(2) by operation of default

Explanation

Section 10(1) lets parties determine the number but says it shall not be an even number. Two is even, so the clause does not conform. Option A ignores the proviso. Option B adds a condition not stated in the clause or Section 10. Option D misapplies Section 10(2), which applies where the parties fail to determine a number, not where they determine a non-permitted one.

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