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Case 177: MAL 7 , 10
India: Supreme Court of India
18 November 1996
MMTC v. Sterlite Industries (India) Ltd.
Published in English: Judgments Today [1996] 10 S.C. 390
(Abstract prepared by the Secretariat)
The case concerned an arbitration clause contained in a contract entered into by the
parties. The clause provided for the appointment of one arbitrator by each party and an
umpire to be jointly appointed by those arbitrators.
The appellant sought to rely on the arbitration clause after a dispute arose between
the parties. After the respondent claimed that the arbitration clause could not be
resorted to, and, therefore, refused to name an arbitrator, the appellant brought an
action in the High Court . The High Court rejected the respondent's contention that the
arbitration clause was invalid in light of section 10 of the new 1996 Arbitration and
Conciliation Act (adapted from article 10 MAL). The aforementioned provision in the Act
states that parties are free to determine the number of arbitrators, provided that such
number shall not be an even number. Special leave was given to appeal to the Supreme
Court.
The Supreme Court held that the relevant provision to determine the validity of an
arbitration agreement is section 7 of the 1996 Act (adapted from article 7 MAL), which
contains the writing requirement. As there is no reference to the number of arbitrators
within this provision, the Supreme Court concluded that the validity of an arbitration
clause does not depend on the number of arbitrators specified therein. The arbitration
clause was therefore held to be valid.
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