The Supreme Court on Tuesday appointed the former judge of the Karnataka High Court, Justice A V Chandrashekara, as a sole arbitrator to adjudicate the dispute between two firms that are engaged in the hospitality sector.

The apex court delivered its verdict on a plea filed under the provision of the Arbitration and Conciliation Act for appointment of a sole arbitrator to resolve the issues between Intercontinental Hotels Group (India) Pvt Ltd, Intercontinental Hotels Group (Asia-Pacific) Pvt Ltd -- which were the petitioners -- and Waterline Hotels Pvt Ltd.

A bench headed by Chief Justice N V Ramana said the apex court should ensure that arbitrations are carried on until its larger bench decides on the interplay between two sections of the Arbitration and Conciliation Act 1996 unless the issue before the court patently indicates the existence of deadwood.

The bench, also comprising Justices Surya Kant and Hima Kohli, said that the apex court's jurisdiction to adjudicate issues at the pre- appointment stage has been the subject matter of numerous cases before it as well as the high courts. The initial interpretation provided by this court to examine issues extensively was recognized as being against the pro-arbitration stance envisaged by the 1996 Act, it noted in its judgement.

The bench, which referred to an earlier judgement delivered by the apex court, said the courts are to take a 'prima facie' view on issues relating to the existence of the arbitration agreement. It noted that usually, the issues of arbitrability/validity are matters to be adjudicated upon by arbitrators.

Although we agree that there is a need to constitute a larger bench to settle the jurisprudence, we are also cognizant of time sensitivity when dealing with arbitration issues.

All these matters are still at a pre- appointment stage, and we cannot leave them hanging until the larger bench settles the issue, the bench said. In view of the same, this court until the larger bench decides on the interplay between sections 11(6) and 16 should ensure that arbitrations are carried on unless the issue before the court patently indicates the existence of deadwood, it noted.

Dealing with the plea filed before it, the bench said it deem it appropriate to refer the matter to arbitration in terms of a clause, which deals with dispute resolution, of the arbitration agreement entered into by the parties. Accordingly, we appoint Justice A V Chandrashekara, a former Judge of the High Court of Karnataka, as a sole arbitrator to adjudicate the issues, it said.