Case: ACC Limited (Formerly known as the Associated Cement Co. Ltd) Vs. Global Cements Ltd

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 the same has been interpreted by this Court in various judgments. In Situ Sahu and Others v. State of Jharkhand and Others [(2004) 8 SCC 340] , this Court dealt with Sections 71-A and 71-B of the Chota Nagpur Tenancy Act, 1908 wherein the power was given to the Deputy Commissioner to restore - possession of “raiyat” belonging to Scheduled Tribes transferred in contravention of the provisions of the Act or fraudulently. Section 71-A provides that “if at any time it comes to the notice of the Deputy Commissioner that transfer of land belonging to a raiyat……. who is a member of the Scheduled Tribes has taken plea in contravention of……….. any other provisions of this Act or by any fraudulent method…..” This Court took the view that the words “at any time” in Section 71-A is evidence of the legislative intent to give sufficient flexibility to the Deputy Commissioner to implement the socio-economic policy of the Act, namely to prevent inroads upon the rights of the ignorant, illiterate and backward citizens. Certainly, the expression of the words “at any time” used in Clause 21 of the Arbitration Agreement is to give effect to the policy of the Act which is to promote efficacy of arbitration. 20. In Ibrahimpatnam Taluk Vyavasaya 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 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 resolved. Those disputes and differences could be resolved during the life time of the named arbitrators or beyond their life time. 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 non-availability, 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 the agreement.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.24. In view of the above mentioned reasons, we

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]21. We have carefully gone through the arbitration clause in the Agreement dated 16.12.1989 and, in our view, the wordswhich appear in Clause 21, is of considerable importance.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 expressionused 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 life time. The incident of the death of the named arbitrators has no nexus or linkage with the expressionused 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 non-availability, 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 the agreement.23. The High Court in our view wasjustified in entertainingn application and appointing a formerJudge of thisCourt as a- sole arbitrator under the Arbitration and Conciliation Act, 1996 to adjudicate the dispute and difference between the parties.