Vallabhdas Meghji vs Cawasji Framji and Co.

Taraporewala, J.—In this matter the petitioner prays that the appointment of Vithaldas Damodar Govindji as sole arbitrator u/s 9 (6) of the Indian Arbitration Act made by the respondents may be set aside and that it may be declared that the power of appointing arbitrators under the partnership agreement having once been exercised by both the partners has been exhausted and that reference to Vithaldas Damodarj Govindji be revoked. In the alternative the petitioner asks that a tit and proper person nominated by the petitioner may be appointed as an arbitrator on petitioner''s behalf to act along with the said Vithaldas Damodar Govindji.

The whole argument as to the revocation of the appointment of Vithaldas Damodar Govindji is based on Section 9 of the Indian Arbitration Act. It has been argued that that section applies only where one of the arbitrators dies or becomes incapable or refuses to act, but that where both the arbitrators refuse to act, the arbitration comes to an end and that there is no power in the parties or in Court to appoint other arbitrators in place of the arbitrators so refusing to act.

In this case it appears that the arbitrators, after proceeding for about eighteen months, declined to act any further. There upon after some time the respondents appointed Mr. Vithaldas Damodar Govindji as their arbitrator and called upon the petitioner to appoint his arbitrator u/s 9 (6), and as the petitioner refused to appoint his arbitrator, the respondents appointed Vithaldas Damodar Govindji as sole arbitrator in the matter u/s 9 (6).

The construction of Section 9, to my mind, is quite clear. It provides for supplying vacancy in case where the submission provides that reference shall be to two arbitrators one to be appointed by each party. The previous section provides for supplying vacancy in case where the submission is to one arbitrator, umpire or third arbitrator. Section 9, Clause (a) speaks of "either of the appointed arbitrators refusing to act, etc." That means only that when two arbitrators are appointed one by each party the right of appointing another arbitrator in place of the arbitrator refusing to act, etc., lies with the party appointing him and not with both the parties. The meaning which is tried to be put upon Section 9, Sub-clause (a), that the right of a party to appoint an arbitrator in place of the arbitrator appointed, by that party who refuses to act, etc., cannot be exercised if the other arbitrator refuses to act, seems to me not the proper construction of the clause at all. The word ''either'' is used because it may happen that one or both of the arbitrators may refuse to act, etc. In that case each party has a right to appoint an arbitrator in the place of the arbitrator appointed by that party, and if one party so appoints and the other party refuses to appoint an arbitrator in place of his arbitrator, the provisions of sub-section (b) would come into force and the party so appointing would be entitled, after giving notice to the other party, to appoint his own arbitrator as sole arbitrator, Therefore, the petition fails on the first two grounds.

As regards the alternative ground, it was conceded by the respondents that they were willing to have another arbitrator appointed by the petitioner to act with Vithaldas Damodar Govindji.

I, therefore, set aside the appointment of Vithaldas Damodar Govindji as sole arbitrator made u/s 9 and I order that the said Vithaldas Damodar Govindji should act with an arbitrator nominated by the petitioner within a fortnight.

The said two arbitrators to proceed with the arbitration.