Whether court should appoint substitute arbitrator if there is delay in passing of arbitration award?

 It is true that there was some delay in passing the award.
However, between 2011 and 2013, the respondent has not filed any
application to expedite the proceedings and for passing of the
award. The respondent has neither filed the Request Case for
passing of the award at an early date nor filed the petition under
Section 14 of the Act for termination of the mandate of the arbitrator
that the arbitrator has ‘failed to act without undue delay’.
31. Mere neglect of an arbitrator to act or delay in passing the
award by itself cannot be the ground to appoint another arbitrator in
deviation from the terms agreed to by the parties. We may usefully
refer to RUSSELL ON ARBITRATION, 20th Edition which reads as
under:-
“Mere neglect of an arbitrator to act, as distinct from refusal or
incapacity, does not of itself give the court power to appoint another
arbitrator in his place. It does, however, give the court power to
remove him, whereupon there is a power to replace him.”*
*[RUSSELL ON ARBITRATION, 20th Edition, Pg. 136 quoted in Law relating to
Arbitration and Conciliation, 9th Edition, by Dr. P.C. Markanda at Pg. 620]
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1039 OF 2019

RAJASTHAN SMALL INDUSTRIES
CORPORATION LIMITED  Vs  M/S GANESH CONTAINERS MOVERS SYNDICATE 

R. BANUMATHI, J.
Dated:January 23, 2019.

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Whether parties can be denied right to appoint substitute arbitrator?

I find it difficult to concur with the opinion of the Bombay High Court in Ignatius Tony Pereira11, and the Calcutta High Court in Ramjee Power Construction Ltd10, wherein it has been held that, once an arbitrator is appointed by the Chief Justice of the High Court under Section 11, the right of the other party to appoint a substitute arbitrator, in accordance with the agreement, gets extinguished forever. My inability to agree is, firstly, because the rules referred to in Section 15(2), (as held by the Supreme Court in M/s. Yashwith Constructions (P) Ltd7), is the arbitration agreement; secondly, becauseSection 5 of the Act permits judicial intervention only when specifically provided under Part-I of the Act; and there is no specific provision in Part-I of the Act, much less in Section 15 thereof, stipulating that, if the earlier arbitrator is appointed by the High Court under Section 11(4) & (6) of the Act, the substitute arbitrator must also be appointed only by the High Court and not by the party to the agreement. Since the very object of the Act is to minimise the supervisory role of Courts in the arbitral process, and to give primacy to the agreement between the parties, there is no justifiable reason why a party to the arbitration agreement should, forever, be denied his right to appoint a substitute arbitrator, on the mandate of the earlier arbitrator being terminated, merely because he had failed to exercise his right, to appoint an arbitrator, earlier.

The respondent is entitled, in terms of Clause 22-A(iii) of the agreement, to appoint a substitute arbitrator even if they had failed to appoint an arbitrator earlier. On their exercising their right to appoint a substitute arbitrator, no other person can be appointed as an arbitrator, in substitution, by the High Court. It is only if they had failed to appoint a substitute arbitrator, despite being requested to do so by the applicant, would the applicant then have been entitled to invoke the jurisdiction of the High Court, under Section 11(6) of the Act, requesting it to take the necessary measure. As the respondent has appointed Justice C.V. Ramulu as their substitute arbitrator, even before they were called upon by the applicant to do so, the applicant is not entitled to invoke the jurisdiction of the High Court, underSection 11(6) of the Act, seeking appointment of a substitute arbitrator. The application, as filed, is therefore not maintainable.

Andhra High Court

Gamesa Wind Turbines Pvt. Ltd, ... vs Mytrah Energy (India) Ltd on 27 December, 2017

Arbitration Application No.55 of 2015

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Whether arbitration agreement survives on death of named arbitrator?

 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.

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 resolved. Those disputes and differences could be resolved during the life time of the named arbitrators or beyond their lifetime.

The incident of the death of the named arbitrators has no nexus or linkage with the expression "at any time" used in clause 21 of the Agreement. The time factor mentioned therein is the time within which the question or dispute or difference between the parties is resolved as per the Agreement. Arbitration clause would have life so long as any question or dispute or difference between the parties exists unless the language of the clause clearly expresses an intention to the contrary.

The question may also arise in a given case that the named arbitrators may refuse to arbitrate disputes, in such a situation also, it is possible for the parties to appoint a substitute arbitrator unless the clause provides to the contrary. Objection can be raised by the parties only if there is a clear prohibition or debarment in resolving the question or dispute or difference between the parties in case of death of the named arbitrator or their nonavailability, by a substitute arbitrator.

22. We are of the view clause 21 does not prohibit or debar the parties in appointing a substitute arbitrator in place of the named arbitrators and, in the absence of any prohibition or debarment, parties can persuade the court for appointment of an arbitrator under clause 21 of theagreement.

23. The High Court in our view was justified in entertaining such an application and appointing a former Judge of this Court as a sole arbitrator under the Arbitration and Conciliation Act, 1996 to adjudicate the dispute and difference between the parties.

SUPREME COURT OF INDIA

ACC Limited (formerly known as the Associated Cement Co. Ltd.) Vs. Global Cements Ltd.

[Special Leave Petition (C) No. 17689 of 2012]

K.S. Radhakrishnan, J.

Dated:June 11, 2012

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When court can appoint substitute arbitrator?

Once we keep in mind the aforesaid fundamental aspects of the
arbitration, the irresistible conclusion would be that whenever parties
agree for mediation, and even name a specific arbitrator with no specific
provision for appointment of another arbitrator on the recusal/withdrawal
of the said arbitrator, the said omission is made up by Section 15(2) of
the Act and unless arbitration agreement between the parties provides a
categorical prohibition or debarment in resolving a question or dispute or
difference between the parties by a substitute arbitrator in case of death
or the named arbitrator or non-availability of the said arbitrator, Courts
have the power to appoint substitute arbitrator, which power is given by
Section 15(2) of the Act as this provision is to be given liberal
interpretation so as to apply to all possible circumstances under which

the mandate of the earlier arbitrator may be terminated.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL NO. 8731 OF 2015
(Arising out of S.L.P. (Civil) No.19617 of 2015)
SHAILESH DHAIRYAWAN 

V
MOHAN BALKRISHNA LULLA 

R.F. Nariman, J.
Dated;OCTOBER 16, 2015.
Citation;(2016)3 SCC619,2016(6) MHLJ 13

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