The Madras High Court has declared that the provisions of the Arbitration and Conciliation Act, 1996 apply to the Central Registrar’s authority to select an arbitrator and determine the expenses of arbitration under the Multi State Cooperative Societies Act, 2002 (MSCS Act) (A&C Act). The matter was between Air Corporation Employees Co-operative Credit Society Ltd. versus Registrar of Co-operative Societies (W.P. No.28719 of 2018 and W.M.P.Nos.33551 & 33555 of 2018) and was presided over by Hon’ble Mr. Justice C. Savaranan.
FACTS OF THE CASE:
Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorari. Sundaramoorthy has raised an Arbitration claim under Section 84 of the Multi State Co-operative Societies Act, 2002 against the Chief Executive/Manager of the Society before the State Registrar and requested for appointment of an Arbitrator.
The petitioner Co-operative Society argued before the High Court that when a dispute is referred to arbitration under Section 84 of the MSCS Act, only the Central Registrar is authorized to appoint an Arbitrator and that the State Registrar lacks the authority to do so. The petitioner thus claimed that the State Registrar made a mistake while determining the Arbitrator’s costs.
The Single Bench of Justice C. Saravanan set aside the State Registrar’s order ordering the petitioner to pay the fees and expenses to the Arbitrator, concluding that there is no provision under the MSCS Act where an exemption has been provided with respect to Section 38 of the A&C Act, which requires the parties to equally bear the advance costs to be deposited before the Arbitral Tribunal.
The State Registrar’s ruling instructing the petitioner to pay the Arbitrator’s costs and expenses was thus reversed by the Court. By using Sections 31(8), 31A, and 38 of the A&C Act as well as the pertinent MSCS Act provisions, the Court instructed the Arbitrator to use discretion and determine the fees that the parties would be required to pay.
The court stated that
“Rule 30 (1) of the Multi State Co-operative Societies Act, 2002, makes it clear for that the Central Registrar may appoint Arbitrar and fix the fee of the arbitrator subject to the provisions of the Arbitration and Conciliation Act, 1996. Thus the method for appointment and fixation of the arbitrator under the provisions of the Arbitration and Conciliation Act, has to be followed.”
The Court finally ruled that the power of the Central Registrar to appoint an arbitrator and fix the fees of arbitration under the Multi State Co-operative Societies Act, 2002 (MSCS Act), is subject to the provisions of the Arbitration and Conciliation Act, 1996 (A&C Act).
Further the writ petition was dismissed.
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JUDGMENT REVIEWED BY ADITI PRIYADARSHI