Arbitration and Conciliation Act, 1996
10. Number of arbitrators.—
(1) The parties are free to determine the number of arbitrators, provided that such number shall not be an even number.
(2) Failing the determination referred to in sub-section (1), the arbitral tribunal shall consist of a sole arbitrator.
Number of arbitrators
The parties are at liberty to determine the number of arbitrators, but such number shall not be an even number. If the parties fail to provide for an odd number of arbitrators, the arbitral tribunal shall be constituted by a sole arbitrator; Sri Venkateshwara Construction Co. v. Union of India, AIR 2001 AP 284.
In the present case, a contract between the two parties M and S provided that each party shall nominate one arbitrator and the two arbitrators shall then appoint an umpire before proceeding with the reference. S invoked arbitration clause and appointed an arbitrator under the agreement after the 1996 Act came into force. It was contended by the M that the arbitration agreement provided for the appointment of two arbitrators while section 10(1) of the 1996 Act does not envisage the appointment of an even number of arbitrators and that the only remedy in such a case was by way of suit and not by arbitration. The Supreme Court held that there is nothing in section 7 to indicate the requirement of the number of arbitrators as a part of the arbitration agreement. Thus the validity of an arbitration agreement does not depend on the number of arbitrators specified therein. The number of arbitrators is dealt with separately in section 10 which is a part of machinery provision for the working of the arbitration agreement. It is, therefore, clear that an agreement specifying an even number of arbitrators cannot be a ground to render the arbitration agreement invalid under the 1996 Act. In view of the term in the arbitration agreement that the two arbitrators would appoint an umpire, the requirement of section 10(1) was satisfied. In other words, the arbitration agreement was not for an even number of arbitrators and section 10(2) was not attracted. The arbitration agreement was deemed to be one providing for three arbitrators; M.M.T.C. Ltd. v. Sterlite Industries (India) Ltd., AIR 1997 SC 605.