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1988 Supreme(Ker) 355

Judges : RADHAKRISHNA MENON
COCHIN REFINERIES LTD - Appellant
Versus
C.S.COMPANY ENG.CONTRACTORS - Respondent
Case No : C.R.P. No. 1767 of 1987-D
Decided On : 09/06/1988
Advocates Appeared :
K.A. Nair; For Petitioner P.G.K. Wariyar; For Respondents

The appointment of a substitute in the place of a deceased sole arbitrator must follow the procedure prescribed under S.9(b) of the Arbitration Act.

Headnote:

The petitioner filed a petition to restrain the arbitrator from proceeding with the arbitration case after the death of the sole arbitrator appointed by the first respondent. The court analyzed S.9 of the Arbitration Act and held that the appointment of a substitute in the place of the deceased sole arbitrator must follow the procedure prescribed under S.9(b). The court found that the appointment of the second respondent as the sole arbitrator in place of the deceased arbitrator was invalid. The court set aside the order and remanded the matter to the court below for disposal in accordance with the directions provided.

Judgment :-

1. The short but interesting question arising for consideration is this: Can a party to an arbitration agreement, on the death of the sole arbitrator appointed by him, appoint another in the place of the deceased without following the procedure prescribed under S.9(b) for the appointment of a sole arbitrator?

2. The facts essential and requisite to find an answer to the question, lie in a narrow compass. Complying with the procedure prescribed under S.9(b) of the Arbitration Act, the first respondent appointed one M. K. Abdul Khader as the sole arbitrator to resolve the dispute, which according to it, had arisen out of the contract, it had entered into with the petitioner to "execute the left over earth filling work of an earlier agency" in the petitioner's premises. Abdulkhader accordingly commenced the arbitration work. The petitioner thereupon filed O.P. (Arbitration) No. 114/85 before the Sub Court, Ernakulam for a declaration that "there is no arbitrable dispute in existence" and consequently to restrain the arbitrator from proceeding with the arbitration case. This petition was dismissed and the said order was under attack in C. R. P. 888 of 1987-H.

3. During the pendency of C. R. P. 888/87, the sole arbitrator, M. K. Abdulkhader died. The first respondent thereupon appointed the second respondent as the sole arbitrator in the place of deceased Abdulkhader. According to the petitioner, the second respondent was appointed as the sole arbitrator without notice to it. The petitioner company has a further case that till the date of the filing of the revision, the company has not been informed as to when Abdulkhader died. The arbitration proceedings now under the control of second respondent must, therefore be held to be a fresh proceeding on and from 9-1-1987, the date on which the second respondent issued notice to the parties regarding the preliminary sitting schedule to be held on 17-1-1987, according to the company-petitioner. On seeing that the second respondent was continuing with the arbitration proceedings, the petitioner filed its statement before the second respondent, but under protest.

4. The petitioner under these circumstances filed the C. M. P. 17116 of 1987 under the proviso to clause (b) of S.9 for an order allowing it to appoint a co-arbitrator. This court transmitted this petition to the court below with a direction to dispose of the same on merits. The court below by the order under challenge dismissed the said petition.

5. Before I deal with the point, I would like to make it clear that the question whether or not any arbitrable dispute exists is not dealt with in this order, as the same is not the subject-matter of the enquiry in this revision; this question therefore is left open.

6. Keeping these facts in mind we will try to get the answer to the question. The answer in my view depends upon the construction of S.9 of the Arbitration Act. This Section confers on a party to arbitration agreement the power to appoint a new arbitrator or in certain cases a sole arbitrator. This section however, has application only to those arbitration agreements under which a reference requires to be made to two arbitrators, one to be appointed by each party to the agreement. Clause (a) of S.9 provided that if either of the appointed arbitrators, neglects or refuses to act or is incapable of acting, or dies, the party who appointed him has a right to appoint a new arbitrator in his place. In other words the right to appoint a new arbitrator within the meaning of clause (a) of the Section would arise only on the happening of any of the contingencies namely the arbitrator already appointed neglects or refuses to act or is incapable of acting or dies. Clause (b) of S.9 however, deals with a situation different from the one envisaged under clause (a). Clause (b) prescribes the procedure for the appointment of the sole arbitrator. The procedure prescribed under this clause shall strictly be observed before appointing t











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