Public-sector arbitration clauses often route appointments through the employer's own panel. When disputes ripen, contractors increasingly ask courts to appoint instead. In M/s Manvi Traders v. Bharat Sanchar Nigam Limited (ARBAP/44/2026, 2026:UHC:9986, order dated 31 October 2026), the Acting Chief Justice of the Uttarakhand High Court allowed a Section 11(6) application arising from a terminated Service Level Agreement for comprehensive maintenance of optical fibre cable across six Kumaon and Garhwal locations — and appointed an independent advocate as sole arbitrator, directing the statutory disclosure under Section 11(8) within fifteen days. The rival accusations over who caused the contract's breakdown were left, as they should be, to the tribunal.
The contract and its collapse
The agreement was operational infrastructure work of the most ordinary kind: maintaining optical fibre across six hill locations under a service-level regime. Its collapse followed the familiar script of public-contract disputes. The contractor's case is that the employer withheld the stores needed to perform, then terminated and blamed the contractor; the employer's case is that the contractor never mobilised at all. Each narrative, if true, makes the other side the author of the breach — and neither can be resolved on affidavits in a Section 11 proceeding.
The Section 11(6) enquiry is deliberately narrow
Since the 2015 amendment inserted Section 11(6A), and through the Supreme Court's subsequent case law, the referral court's jurisdiction has been confined to the existence of the arbitration agreement, leaving arbitrability and merits to the tribunal under the kompetenz-kompetenz principle in Section 16. Here both sides accepted that Clause 23 of the contract was an arbitration agreement, which made the application straightforward: the court recorded the rival positions on termination without engaging them, held the application deserved to be allowed, and made the appointment.
Panel clauses and independent appointments
What the clause contemplated
For claims between Rs 5 lakh and Rs 5 crore, a sole arbitrator appointed by BSNL from its own panel, with the contractor choosing from a list of three names forwarded by BSNL — the employer curating the field.
What the court did
Appointed an independent advocate as sole arbitrator directly, with the Section 11(8) disclosure to follow — placing neutrality of appointment beyond argument and insulating the eventual award from challenge on that ground.
The order itself is economical and does not theorise; but its practical effect aligns with the direction of travel in Indian arbitration law, which has grown steadily more sceptical of appointment mechanisms controlled by one party — particularly government companies and PSUs — and more willing to secure appointments that satisfy the independence standards of Section 12 read with the Schedules.
What the parties take into the arbitration
- The store-supply question: whether the employer's obligation to provide materials was a condition of the contractor's performance, and who defaulted first.
- The termination's validity: notice, cure opportunity and the contractual termination machinery will be measured against the SLA's terms.
- Quantum: the order does not record the claim amount; heads such as work done, retention, security deposits and loss of profit remain open before the tribunal.
- Timelines: the Section 29A clock will run from completion of pleadings, with the court signalling that the award should be endeavoured within the statutory period.
Practice note: Contractors invoking arbitration against PSUs should serve the notice strictly in the clause's format — here, 60 days, with disputed points and amounts specified to the designated officer — before moving under Section 11(6), since compliance with the pre-reference procedure is the respondent's first objection. And in every court appointment, diarise the arbitrator's Section 11(8)/Section 12 disclosure: it is the foundation of the tribunal's legitimacy and of the award's resilience.
Frequently Asked Questions
What was the underlying dispute?
A contract for SLA-based comprehensive maintenance of optical fibre cable in BSNL's CN Tx North Circle, covering Satpuli, Nainital, Haldwani, Dhumakot, Baijnath and Almora. The contractor says BSNL failed to provide the necessary stores and then terminated the contract; BSNL says the contractor never began work or deployed a team. Both agreed an arbitration clause existed.
What did the arbitration clause provide?
Clause 23 required 60 days' notice specifying the disputed points and amounts; claims above Rs 5 lakh up to Rs 5 crore went to a sole arbitrator appointed by BSNL from its panel, with a list of three names offered to the other party; larger claims went to a three-member tribunal. The clause barred either party from appointing a serving employee as arbitrator.
Why did the court appoint an independent advocate rather than follow the panel mechanism?
At the Section 11(6) stage the court's enquiry is confined to the existence of the arbitration agreement, which was admitted. The court exercised the appointment power itself and named an independent member of the Bar — consistent with the modern trend of courts securing party-neutral appointments in public-contract disputes rather than remitting the parties to the employer's curated panel.
What happens after the appointment?
Under Section 11(8), the arbitrator must furnish a written disclosure of independence and impartiality — the Section 12 declaration — within fifteen days of receiving the order. Remuneration is to be fixed in consultation with the parties, and the award is to be endeavoured within the statutory timeline under Section 29A.