ACC LIMITED (FORMERLY KNOWN AS THE ASSOCIATED CEMENT CO. LTD.) versus GLOBAL CEMENTS LTD.

Citation: [2012] 6 S.C.R. 215 · Decided: 11-06-2012 · Supreme Court of India · Bench: K.S. RADHAKRISHNAN · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2012] 6 S.C.R. 215 
ACC LIMITED (FORMERLY KNOWN AS THE 
ASSOCIATED CEMENT CO. LTD.) 
v. 
GLOBAL CEMENTS LTD. 
(Special Leave Petition (C) No. 17689 of 2012) 
JUNE 11, 2012 
[K.S. RADHAKRISHNAN AND JAGDISH SINGH 
KHEHAR, JJ.] 
A 
B 
Arbitration and Conciliation Act, 1996 -
s. 11 -
C 
Appointment of arbitrator - Death of named arbitrator in the 
arbitration clause in the agreement - Application for 
appointment of a substitute arbitrator -
Validity of the 
arbitration agreement - Held: The intention of the parties to 
enter into an arbitration agreement can be clearly gathered 
D 
from the arbitration clause of the Agreement - 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 - Arbitration clause 
has no nexus with the life time of the named arbitrator -
E 
Arbitration clause 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 the arbitration clause of the agreement 
F 
- Thus, the High Court justified in entertaining an application 
for appointment of a substitute arbitrator to adjudicate the 
dispute between the parties. 
Parties entered into an agreement containing an 
arbitration clause 21 for reference of any dispute between 
G 
them to an arbitrator. Respondent sought reference of the 
dispute to an arbitrator. By that time the two nominated 
arbitrators under clause 21 had expired. The respondent 
filed an application under Section 11 of the Arbitration 
215 
H 
216 
SUPREME COURT REPORTS 
[2012] 6 S.C.R. 
A and Conciliation Act, 1996 seeking appointment of a 
substitute arbitrator. The High Court entertained the 
application under Section 11 and appointed a substitute 
arbitrator to adjudicate the dispute between the parties. 
Therefore, the appellant filed the instant Special Leave 
s Petition. 
Dismissing the Special Leave Petition, the Court 
HELD: 1.1. Section 14 of the Arbitration and 
Conciliation Act, 1996 provides for the circumstances in 
C which the mandate of the arbitrator is to terminate. It says 
that the mandate of an arbitrator will end when it 
becomes impossible for him to perform his functions de 
facto or de jure or for some other reasons he fails to act 
without undue delay or withdraws from office or the 
D parties agree to terminate his mandate. Section 15(2) of 
the Act provides that where a substitute arbitrator has to 
be appointed due to termination of the mandate of the 
previous arbitrator, the appointment must be made 
according to the rules that were applicable to the 
E appointment of the arbitrator being replaced. No further 
application for appointment of an independent arbitrator 
under Section 11 will lie where there has been 
compliance with the procedure for appointment of a 
substitute arbitrator. On appointment of the substitute 
F arbitrator in the same manner as the first, no application 
for appointment of independent arbitrator under Section 
11 could be filed. Of course, the procedure agreed upon 
by the parties for the appointment of the original 
arbitrator is equally applicable to the appointment of a 
G substitute arbitrator, even if the agreement does not 
specifically say so. [Para 14] [224-F-H; 225-A-B] 
H 
Yashwitha Constructions (P.) Ltd. v. Simplex Concrete 
Piles India Ltd. (2006) 6 SCC 204: 2006 (3) Suppl. SCR 96 
- referred to. 
ACC LTD. (FORMERLY KNOWN AS THE ASSTD. CEMENT CO. 217 
LTD.) v. GLOBAL CEMENTS LTD. 
1.2. Sections 14 and 15 provide the grounds for 
A 
termination of the mandate of the arbitrator on the ground 
of incapability of the arbitrator to act or if he withdraws 
from his office or when the parties agree to the 
termination of the mandate of the arbitrator. Section 15(2) 
states that a substitute arbitrator shall be appointed as 
B 
per the rules that were applicable to the appointment of 
the arbitrator bein_g replaced. Section 15(2), therefore, has 
to be given a liberal interpretation so as to apply to all 
possible circumstan~es under which the mandate may be 
terminated. Section 11 (6) would not apply only if it is c 
established _that parties had intended not to supply the 
vacancy occurred due to the inability of the arbitrator to 
resolve the dispute or due to whatever reasons but that 
intention should be clearly

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