TMI Blog2010 (6) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. A.B. Palkar (Retired Judge Bombay High Court). 2. Parties shall file all pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trator. 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 mandate. (3) If, under this section or Sub-section (3) of Section 13, an Arbitrator withdraws from his o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hief 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 contained in the arbitration agreement or any Rules of any institution under which the disputes were referred to arbitration. The word rules ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efuse 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 named persons refuse to act as Arbitrators, the arbitration clause is not wiped out. What is exhausted is the authority of the named persons to ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, it is not possible for us to agree with the view taken by the learned Single Judge of the Madras High Court. The power under Section 11 of the Act, as now held, is not administrative power but judicial power. Secondly, the death of Arbitrator ordinarily does not invalidate the arbitration agreement where it is so manifest. In the instant case it is not so. The clause survives. Therefore, if the named Arbitrator dies or refuses to proceed with the arbitration, the procedure under Section 11(6) of the Act will have to be followed. In our opinion, therefore, the view taken by this Court in Smt. Satya Kailashchandra Sahu and Ors. (supra) and by the Allahabad High Court in Dharmpal Satyapal Ltd. case (supra) will reflect the correct interpre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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