2010 (6) TMI 864

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....r. A learned Judge after considering the various contentions was pleased to hold that on the death of Arbitrator and in the absence of parties agreeing to appoint another Arbitrator, there would not be an arbitration agreement and consequently no relief can be granted. A alternative plea was made on behalf of the Petitioner that the suit should be revived. The learned Judge was pleased to grant liberty to take appropriate steps and/or proceedings in accordance with law for restoration of the suit. It is this order which is the subject-matter of the present proceedings. 2. Arbitration clause reads thus: 1. By consent, the dispute in the suit between the Plaintiff and Defendant is referred to the Arbitration of the Sole Arbitrator Shri.....

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....nstituted by odd number of Arbitrators. In the instant case we have a sole Arbitrator. Two relevant provisions of the Arbitration and Conciliation Act, 1996 are Sections 14 and 15 read as under: 14. Failure or impossibility to act (1) The mandate of an Arbitrator shall terminate if (a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay: and (b) he withdraws from his office or the parties agree to the termination of his mandate. (2) If a controversy remains concerning any of the grounds referred to in Clause (a) of Sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on termination of the mand....

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....Tribunal and the parties not agreeing to appoint an Arbitrator, any aggrieved party can move under Section 11(5) of the said Act requesting the Chief Justice or his designate to fill in the vacancy. Thus, the Act itself contains provisions for reconstitution of the Tribunal even in the case where the named Arbitrator expires. 5. Section 15(2) uses the words "rules that may be applicable to appoint Arbitrator." The interpretation of these words stands concluded in view of the judgment of the Supreme Court in Yashwith Constructions (P) Ltd. v. Simples Concrete Piles India Ltd and Anr. 2006 DGLS 416 : (2006) S.C.C. 204, where the learned Court observed that the word "rules" occurring in Section 15(2) refers to the provision for appointment ....

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...., the Court considering the provisions of the Act was pleased to hold that the arbitration clause was not wiped out and where the named persons refuse to act as Arbitrator the provision which is required to be followed is provided in Section 11 of the Act. This is what the Court observed: 13. In the present case, in view of the clause in the Deed of Partnership, it is clear that there was an arbitration agreement as provided in Section 7 read with Section 2(1)(a) of the Act. When an arbitration agreement makes a provision for appointment of named persons as Arbitrators and when the named persons refuse to act as Arbitrators, then the procedure which is required to be followed is provided in Section 11 of the Act, that is to say, if the n....