Arbitration clause remains workable when a named sole arbitrator refuses to act, unless substitution is clearly excluded.

An arbitration clause is not exhausted merely because the named sole arbitrator refuses to act; exhaustion arises only where the agreement shows a clear intention that no substitute will be appointed. If the clause does not exclude vacancy filling, the court may appoint another arbitrator under the applicable statutory power and preserve the contractual reference to arbitration. On the stated facts, the clause did not clearly bar substitution, so the arbitration agreement remained operative despite the named arbitrator's refusal.

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Issues: Whether the arbitration clause stood exhausted and inoperative because the named arbitrator refused to act, so that the disputes could no longer be referred to arbitration.

Analysis: The governing principle is that where a sole named arbitrator, or a person nominated under the clause, refuses to act, the clause is exhausted only if the agreement shows that the parties intended that no vacancy would be supplied. If the agreement does not debar substitution, the Court may step in and appoint another arbitrator under the applicable statutory power. The clause in question did not clearly show an intention to exclude further arbitration. The refusal of the named arbitrator therefore did not nullify the arbitration agreement, and the contractual reference remained workable through a court appointment.

Conclusion: The arbitration clause was not exhausted, and the objection to arbitration failed in favour of the petitioner.

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