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TMI Blog2012 (6) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... re no more and therefore the arbitration clause in the agreement does not survive. It was pointed out that Shri N.A. Palkhivala was named in the agreement since he was the Chairman of the petitioner company and Shri D.S. Seth was named in the agreement since he was the Director of the company. Both of them were nominated as arbitrators since they were closely associated with the company and also due to their eminence, impartiality and familiarity in all commercial transactions and the corporate laws. The petitioner submits that since the arbitrators are no more, the arbitration clause in the agreement has no life and hence there is no question of entertaining the application preferred under Section 11 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') filed by the respondent. 4. The respondent, (applicant before the High Court), refuted those contentions and submitted before the High Court that the arbitration clause in the agreement would survive even after the death of the named arbitrators and the parties can still resolve their difference or dispute by referring them to another arbitrator or move the court for appointing a substitute arbitrator whose decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the facts of the case and the terms of the arbitration Clause in the agreement. Parties, it was pointed out, never intended to refer the dispute to any other arbitrator except the named arbitrator and such an inference can be drawn from Clause 21 and the facts of the case. Learned counsel also pointed out that in the above circumstances, Section 15(2) of the Act has no application and the High Court has committed an error in entertaining the application under Section 11 appointing a substitute arbitrator. FACTS 7. The petitioner by way of Agreement dated 16.12.1989 transferred land admeasuring 53 acres 33 Gunthas and land admeasuring 100 acres 01 Gunthas with buildings and Mining Leases granted by the Government of Gujarat in or under lands admeasuring 423.22 hectares, 21.121 hectares and 4.7551 hectares to the respondent. By Orders dated 24.01.2002 and 03.02.2003, the Collector, Porbander as well as Secretary (Appeals), Revenue Department, State of Gujarat held that the petitioner had committed breach of condition Nos. 3, 4 and 5 of the order of 1993 and condition Nos. 8 & 11 of Lease Agreement dated 15.03.1982 and that the said lands were transferred to the respondent withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court in Jagdish Chander v. Ramesh Chander [[2007] 5 SCC 719] in a clear exposition of law has laid down the principles to be borne in mind while interpreting an arbitration agreement under Clause 7 of the Act. Existence of an agreement is not in dispute, the question is about its enforceability on the death of the named arbitrators. Facts clearly indicate that the parties in this case have contemplated that if any question or difference or dispute arises between them, in relation to or with respect to the meaning or effect of the contract or with respect to their rights and liabilities, the same would be referred to one of the two named arbitrators named in the arbitration clause. The question is whether Clause 21 would outlive the lives of the named arbitrators. 13. Section 14 of the Arbitration and Conciliation Act, 1996 provides for the circumstances in which the mandate of the arbitrator is to terminate. It says that the mandate of an arbitrator will end when it becomes impossible for him to perform his functions de facto or de jure or for some other reasons he fails to act without undue delay or withdraws from office or the parties agree to terminate his mandate. 14. Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished that parties had intended not to supply the vacancy occurred due to the inability of the arbitrator to resolve the dispute or due to whatever reasons but that intention should be clearly spelt out from the terms of the arbitration clause in the Agreement. 18. The legislative policy embodied in Sections 14 and 15 of the Act is to facilitate the parties to resolve the dispute by way of arbitration. The arbitration clause if clearly spells out any prohibition or debarment, the court has to keep its hands off and there is no question of persuading or pressurising the parties to resolve the dispute by a substitute arbitrator. Generally, this stands out as an exception and that should be discernible from the language of the arbitration clause and the intention of the parties. In the absence of such debarment or prohibition of appointment of a substitute arbitrator, the court's duty is to give effect to the policy of law that is to promote efficacy of arbitration. 19. We are of the view that the time factor mentioned in the arbitration clause "at any time" is a clear indication of the intention of the parties and is used in various statutory provisions as well and the meaning of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any time" even its plain, grammatical meaning, quite apart from ignoring the context in which it occurs and the beneficent purpose of its incorporation. The Court held that the expression must be given its full force and effect, which requires the recognition of the committee's power to amend an assessment list even after the expiry of the year following the one in which the list was finalized by due authentication. These decisions are, therefore, to the effect that the expression "at any time" has to be interpreted contextually and reasonably taking note of the intention of the parties. 21. We have carefully gone through the arbitration clause in the Agreement dated 16.12.1989 and, in our view, the words "at any time" which appear in Clause 21, is of considerable importance. "At any time" expresses a time when an event takes place expressing a particular state or condition that is when the dispute or difference arises. The arbitration clause 21 has no nexus with the life time of the named arbitrator. The expression "at any time" used in the arbitration clause has nexus only to the time frame within which the question or dispute or difference arises between the parties be resolve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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