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TATA COMMUNICATIONS LTD. VS. AURORA ENGINEERING COMPANY & ANR.​

Harshita Sehrawat

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Petitioner: Tata Communications Ltd.
Respondents: Aurora Engineering Company & Anr.
Court: The Supreme Court of India
Date: 17.03.2025
Coram: Hon’ble Chief Justice Sanjiv Khanna, Hon’ble Justice Sanjay Kumar, Hon’ble Justice Joymalya Bagchi
Citation: 2025 SCC OnLine SC 632

Facts of the Case

  1. On March 23, 2016, Tata Communications Ltd., a global telecommunications company, entered into a Short Form Procurement Agreement with Aurora Engineering Company, a firm acting as a distribution agent for FirePro Systems Limited (Respondent No. 2). The agreement included an arbitration clause governed by the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules, as referenced in Aurora’s counter affidavit.
  2. A dispute arose under the agreement, prompting Tata Communications to issue a notice invoking arbitration on January 28, 2021. The nature of the dispute was not detailed in the proceedings, but it involved contractual obligations among Tata, Aurora, and potentially FirePro, which issued two undertakings dated March 28, 2016, relied upon by Tata.
  3. The parties failed to agree on an appointing authority for the arbitration within 30 days of Tata’s notice, as required under Article 6(1) of the UNCITRAL Arbitration Rules, 2021. Tata filed a petition under Section 11(6) read with Section 11(12)(a) of the Arbitration and Conciliation Act, 1996, before the Supreme Court, seeking the appointment of an arbitral tribunal.
  4. FirePro Systems Limited argued it was not a signatory to the 2016 agreement, while Tata asserted FirePro’s involvement based on its undertakings, with Aurora as its distribution agent. The Supreme Court noted these contentions but left the substantive issues open, focusing solely on the procedural question of appointing an authority.

Issues

  1. Whether the Supreme Court had jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996, to facilitate the appointment of an arbitral tribunal, given the parties’ failure to agree on an appointing authority under the UNCITRAL Arbitration Rules, 2021.
  2. Whether Article 6(2) of the UNCITRAL Arbitration Rules, 2021, applies, requiring a request to the Secretary-General of the Permanent Court of Arbitration (PCA) to designate an appointing authority.
  3. Whether FirePro Systems Limited’s non-signatory status to the 2016 agreement affected the arbitration proceedings, and whether this issue should be resolved at the stage of appointing an authority.

Judgment

  1. The Supreme Court disposed of Tata Communications’ petition under Section 11(6) read with Section 11(12)(a) of the Arbitration and Conciliation Act, 1996, directing Tata or any party to request the Secretary-General of the Permanent Court of Arbitration (PCA) to designate an appointing authority, as per Article 6(2) of the UNCITRAL Arbitration Rules, 2021.
  2. The Court noted that the parties’ failure to agree on an appointing authority within 30 days of Tata’s notice dated January 28, 2021, triggered Article 6(2), which mandates a request to the PCA Secretary-General. The Court relied on the UNCITRAL Rules (updated in 2013 and 2021), as highlighted by both parties during the hearing, to resolve the procedural deadlock.
  3. The Court addressed FirePro’s contention of being a non-signatory to the 2016 agreement and Tata’s reliance on FirePro’s undertakings dated March 28, 2016. It clarified that these substantive issues, including Aurora’s role as FirePro’s distribution agent, were left open for the arbitral tribunal to decide, as the Court’s role under Section 11(6) was limited to facilitating arbitration, per Vidya Drolia vs. Durga Trading (2021).
  4. The Court did not directly appoint an arbitrator, emphasising that the UNCITRAL Rules’ mechanism for designating an appointing authority must be followed. The petition was disposed of with no order as to costs, and pending applications, if any, were also disposed of.

Conclusion

This judgment underscores the procedural nuances of international commercial arbitration under the UNCITRAL Arbitration Rules, affirming the Supreme Court’s limited role under Section 11(6) in facilitating arbitrator appointments when parties fail to agree. It highlights the importance of adhering to agreed arbitration frameworks, such as the PCA’s role in designating appointing authorities. The ruling reinforces India’s pro-arbitration stance by deferring substantive issues to the arbitral tribunal, ensuring efficient dispute resolution in complex multi-party commercial contracts.

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