TMI Blog2012 (6) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... arbitrator to adjudicate the dispute and difference between the parties - Petition dismissed. - SPECIAL LEAVE PETITION (C) NO. 17689 OF 2012 - - - Dated:- 11-6-2012 - K.S. Radhakrishnan and Jagdish Singh Khehar, JJ. JUDGMENT K.S. Radhakrishnan, J. The question that falls for consideration in this case is whether on the death of a named arbitrator, the arbitration agreement survives or not. 2. At the very outset, let us refer to the relevant arbitration clause in the agreement dated 16.12.1989, which reads as follows: "21. If any question or difference or dispute shall arise between the parties hereto or their representatives at any time in relation to or with respect to the meaning or effect of these presents or with - respect to the rights and liabilities of the parties hereto then such question or dispute shall be referred either to Mr. N.A. Palkhivala or Mr. D.S. Seth, whose decision in the matter shall be final and binding on both the parties." (emphasis added) 3. The petitioner submits that both Shri N.A. Palkhivala and Shri D.S. Seth are no more and therefore the arbitration clause in the agreement does not survive. It was pointed out that Shri N.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D.S. Seth was nominated as arbitrators in the arbitration clause of the Agreement dated 16.12.1989. Learned senior advocate pointed out that Shri N.A. Palkhivala was an eminent jurist of high reputation and he was the former Chairman of the applicant's company and the parties had specifically named him as an arbitrator because of his familiarity and in-depth knowledge of arbitration law as well as corporate law. Learned senior counsel also pointed out that Shri D.S. Seth was appointed since he was the former Director of the applicant's company and was familiar with the commercial transactions and he was also instrumental in dealing with the various issues between the parties. Learned counsel pointed out because of the special nature of the appointment of both Shri N.A. Palkhivala and Shri D.S. Seth, the parties wanted their difference or dispute to be resolved only by those named arbitrators and on their death, the arbitration clause in the agreement would not survive. Learned counsel pointed out that that was the intention of the parties and the same is clearly discernable from the facts of the case and the terms of the arbitration Clause in the agreement. Parties, it was pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter dated 07.12.2011 objecting to the appointment of a substitute arbitrator on the ground that the arbitration clause 21 of the Agreement did not provide for the appointment of any other arbitrator and that was the intention of the parties. It was pointed out that on the death of the two named arbitrators, the arbitration clause itself would come to an end and there is no question of appointing another arbitrator to resolve the question or dispute or difference between the parties. 10. We have examined closely arbitration clause 21 of the Agreement dated 16.12.1989 as well as various letters exchanged between the parties and ascertained the intention of the parties from the facts. Reasoning And Conclusion 11. Clause 21 of the Agreement indisputably is an arbitration agreement which falls under Section 7 of the Act. The intention of the parties to enter into an arbitration agreement can therefore clearly be gathered from clause 21 of the Agreement. Clause 21 clearly indicates an agreement on the part of the parties to refer the disputes to the named arbitrators in the Agreement. 12. This Court in Jagdish Chander v. Ramesh Chander [[2007] 5 SCC 719] in a clear e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 15(2) states that a substitute arbitrator shall be appointed as per the rules that were applicable to the appointment of the arbitrator being replaced. Section 15(2), therefore, has to be given a liberal interpretation so as to apply to all possible circumstances under which the mandate may be terminated. 16. The scope of Sections 11(6) and 15 came up for consideration before the learned designate of the Chief Justice of India in San-A Trading Company Ltd. v. IC Textiles Ltd. [(2006) Arb. LR 11] and the learned Judge held as follows: " ..It therefore follows that in case where the arbitration clause provides for appointment of a sole arbitrator and he had refused to act, then the agreement clause stands exhausted and then the provisions of Section 15 would be attracted and it would be for the court under Section 11(6) to appoint an arbitrator on the procedure laid down in Section 11(6) being followed unless there is an agreement in the contract where the parties specifically debar appointment of any other arbitrator in case the named arbitrator refuses to act." 17. Section 11(6) would not apply only if it is established that parties had intended not to supply the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aya Coolie Sanghem v. K. Suresh Reddy and Others AIR [2003 SC 3592], this Court examined the scope of Section 50-B of the Andhra Pradesh (Talangana Area) Tenancy and Agricultural Lands Act, 1950. The Court, while interpreting the words "at any time", took the view that the use of the words "at any time" in sub-section (4) of Section 50-B of the Act cannot be rigidly read letter by letter. It must be read and construed contextually and reasonably. The Court also opined that the words "at any time" must be understood as within a reasonable time depending on the facts and circumstances of each case in the absence of prescribed period of limitation. In New Delhi Municipal Committee v. Life Insurance Corporation of India and Others [1977] 4 SCC 84, this Court was interpreting the expression of the words "at any time" which finds its place in Section 67 of the Punjab Municipal Act, 1911 read with Section 68A which gave power to the Municipal authorities to amend the assessment list. The Court held that the term "at any time" implies that the list may be amended retrospectively. Stating otherwise would amount to denying to the expression "at any time" even its plain, grammatical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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