1. The arbitration petition has been filed under section 11 of the Arbitration and Conciliation Act, 1996.

2. The question that falls for consideration is whether the 1996, Act prohibits absolutely the appointment of a substitute arbitrator when an arbitrator named in the arbitration agreement refuses or is for any reason unable to act even if the agreement does not show that it was intended that the vacancy should not be filled. I have answered the question in the negative.

3. The parties entered into an M.O.U. dated 16.4.2007. Clause (viii) thereof contains an arbitration agreement which reads as under :-

“viii). In case of any dispute between the parties the same shall be resolved through arbitration by appointment of an Arbitral Tribunal consisting of three arbitrators out of which Retd. Justice Mr.B.C. Gadgil would be the arbitrator appointed by party of the third part and Mr.S.L. Deshpande, Advocate would be the arbitrator appointed by party of the first and second part and the two above named arbitrators would appoint the Presiding Arbitrator to constitute the Arbitral Tribunal of three arbitrators. The entire proceedings will be done as per the provisions of Arbit