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TMI Blog2012 (3) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... entire world. There was no clause where the Petitioners were restricted to import or deal in or to supply (all that batch controllers) any other make. The Petitioners on 17 October 2000, as the Respondents inquiry was at negotiations stage, expressed inability to supply a flow meters and accordingly requested to modify the terms. The Respondents ultimately without accepting the Petitioners offer, placed order with other company and lodged a claim as compensation for damages, being the difference between the price at which the materials were offered by the subsequent tenderers and the price quoted by the Petitioners. 3. A Letter of intent dated 22 August 2000 issued by the Respondents to the Petitioners with details of technical and commercial terms. By letter dated 12 July 2002, the Respondents invoked the Arbitration Clause. 4. On 18 October 2002, the Director of Respondents nominated three Arbitrators. The matter went on for seven years but for one reason or other, the Arbitrators abandoned or ceased to act as Arbitrators. Therefore, the Arbitration could not be completed within two years after entered into the reference on or within such time not exceeding further 12 months a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nominated by the director (Marketing) The Contractor will not be entitled to raise any objection to any such arbitrator on the ground that the Arbitrator is an officer of the Corporation or that he has dealt with the matters to which the contract relates or that in the course of his duties as an officer of the Corporation he had expressed views on all or any other matters in disputes or difference. In the event of the arbitrator to whom the matter is originally referred being transferred or vacating his office he shall be entitled to continue the arbitration proceedings notwithstanding his transfer or vacating his office unless the Director (Marketing) at the time of such transfer, vacation of office or any time thereafter designates another person to act as arbitrator in his place in accordance with the terms of the agreement. In the event of the arbitrator to whom the matter is originally referred, vacating his office or being unable or refusing to act for any reason the Director (Marketing) at the time of vacation of office or inability or refusal to act shall designate another person to act as an arbitrator in accordance with the terms of the said agreement. The arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. (3) Unless otherwise agreed by the parties, where an arbitrator is replaced under subsection (2), any hearings previously held may be repeated at the discretion of the arbitral tribunal. (4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal. 11. The learned counsel appearing for the Respondents has strongly relied on the Judgment of this Court Jayesh H. Pandya and Anr. Vs. Subhtex India Limited and Ors. 2009 (Supp.) Bom.C.R. 225 whereby referring to Sections 4, 11, 14 and 16 it is observed as under: Parties to an arbitration agreement are entitled to stipulate the time within which an arbitral award is to be rendered. In the present case, the time which was prescribed was four months. In such a case, however, where a party intends to assert a rigid adherence to the time prescribed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court has observed as under: 5. A perusal of the arbitration agreement quite clearly reveals that the arbitrator has the power to enlarge the time to make and publish the award by mutual consent of the parties. Therefore, it is obvious that the arbitrator has no power to further extend the time beyond that which is fixed without the consent of both the parties to the dispute. It is an admitted position that the respondent did not give any consent for extension of time of the arbitrator. Thus given the situation, the arbitrator had no power to further enlarge the time to make and publish the award and therefore his mandate had automatically terminated after the expiry of the time fixed by the parties to conclude the proceedings. Arbitration is an efficacious and alternative way of dispute resolution between the parties. There is no denying the fact that the method of arbitration has evolved over the period of time to help the parties to speedily resolve their disputes through this process and in fact the Act recognizes this aspect and has elaborate provisions to cater to the needs of speedy disposal of disputes. The present case illustrates that inspite of adopting this effi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator replaced. 13. The learned counsel appearing for the Respondents has relied on the Supreme Court Judgment, based upon the Arbitration Act Bhupinder Singh Bindra Vs. Union of India 1995 DGLS soft 721 : 1995 5 SCC 329, that the Petitioners having consented for extension directly and indirectly and also for adjournments from time to time and dragged on the case for considerable time, cannot raise such objection of latches or delay on the part of the Arbitrator. The Apex Court, on facts directed the Arbitrator to adjudicate upon the dispute within 6 months from the date of receipt of the order. Thereby also contended in view of the terms of the contract continuation of the Arbitration Proceedings cannot be stated to be bad in law, merely because time schedule was not adhered. 14. Before adverting to the legal issue, it is necessary to consider the Arbitration terms and conditions between the parties. As recorded, apart from peremptory condition to complete the Arbitration proceedings within two years and/or within exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so fixed. The Court, even otherwise, in such situation cannot direct and/or compel any one of the parties to continue with the Arbitration and when the clauses are so clear. There is no reason to accept the submission made by the learned counsel appearing for the Respondents that from time to time the parties appeared before the other Arbitrators and sought time on many occasions. The concept of "Waiver" so defined under the Arbitration Act, is applicable in a situation where there is any vagueness in the contract between the parties. The conduct may be relevant, but in view of the clauses specified time, apart from the law now declared by the Supreme Court recently, I am not accepting the submission that the appearance of the Petitioners before the subsequent Arbitrators, even in the year 2007, 2008 and 2009 that itself is nothing but the acquiescence or waiver of the basic clause. A time, if extended by consent of the parties, if provided, is one thing but if the Agreement clauses itself mandated that Arbitration proceedings should be concluded within two plus one year, and further provide that even subsequent Arbitrator should continue from the point at which his/her p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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