The case between ACC cement v/s Global cements ltd. was held in year 2012. The case was about if the arbitrator dies will the arbitration remains or not. The case judgement was given in supreme court by honorable Mr. Justice KS Radhakrishnan comprising the bench of his lordship and honorable Mr. Justice Jadgish Singh Khehar.
ACC cements ltd. was the applicant and Global cement ltd. were the respondent.
Appeal: Special Leave Petition (C) No. 17689 of 2012 [from the High Court of Judicature at Bombay’s judgement and order dated August 5, 2012 in Arbitration Application No. 7 of 2012]
ARBITRATION
Sections 11, 15, and 14 of the Arbitration and Conciliation Act of 1996 address appointment and an arbitration provision that clearly names two arbitrators. Conflict occurred – By then, both arbitrators had passed away. One side sent a letter dated October 8, 2011, seeking to provide the identity of the lone arbitrator. Respond that the arbitration provision did not apply because the named arbitrators died; if such a clause does not apply; if the High Court’s appointment was improper. It was decided that there should be a clear restriction or ban on filling the vacancy. If there is no such debarment or ban, the court must implement the law’s policy. In this instance, the parties intended to settle any disputes that could arise. Therefore, there is no restriction on choosing a replacement arbiter. The petition was accepted by the High Court with justification.
The petitioner submits that both Shri N.A Palkhivala and D.S Seth are no more and therefore the arbitration clause in the agreement is void. And hence there is no question of following the application under section 11 of the Arbtration and Conciliation Act 1996 by the respondent.
The 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 would be final and binding on both the parties. Unquestionably, Section 7 of the Act applies to arbitration agreements, which is what Clause 21 of the Agreement does. Therefore, it is obvious from clause 21 of the Agreement that the parties intended to engage into an arbitration agreement. The parties’ commitment to send disputes to the designated arbitrators under the commitment is made apparent by Clause 21. According to the supreme court, clause 21 does not forbid or restrict the parties from naming a replacement arbitrator in place of the named arbitrators. In the absence of any restriction or debarment, the parties are free to convince the court to appoint an arbitrator in accordance with clause 21 of the agreement.
By keeping in view of everything the Supreme court did not find any reason to grant leave to appeal and issue notice on the petition for special leave to appeal and the petition was dismissed.
Source: ACC Limited (Formerly known as the Associated Cement Co. Ltd.). Vs. Global Cements Ltd. – Court Verdict
Acc Limited (Formerly Known As The Associated Cement Company Limited) v. Global Cements Limited . | Supreme Court Of India | Judgment | Law | CaseMine