UNION OF INDIA vs OM PARKASH

The Supreme Court held that under Section 8(2) of the Arbitration Act, 1940, the court's role is to appoint an arbitrator when parties cannot agree, and any reference made by the court must be valid. The Court affirmed the High Court's decision that the reference was invalid due to the abolition of the office of the Director of Farms, rendering Brig. Bhandari incompetent to act as an arbitrator. Consequently, the awards were set aside as the court acted beyond its jurisdiction in appointing an arbitrator without a valid reference.