arbitration sc judgment




  The Supreme Court in a recent judgment delivered on June 11,2012:
"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."

Attached File : 752705423 sc arbitration june 11,2012.txt downloaded 134 times

Role of ARBITRATORS/MEDIATORS should be guided by the example quoted in this judgment of the


                                                                                                                                              B K GUPTA



                    IN THE SUPREME COURT OF INDIA
                   S.L.P. Civil) No(s).2896 OF 2010
B.S.KRISHNA MURTHY & ANR.                               Petitioner(s)
B.S.NAGARAJ & ORS.                                       Respondent(s)
                             O R    D    E   R
    Heard learned counsel for the appearing parties.
    This is a dispute between brothers. In our opinion, an
effort should be made to resolve the dispute between the
parties by mediation.
    In      this    connection,     we   would   like   to   quote   the
following     passages     from      Mahatma     Gandhi's    book    'My
Experiments with Truth'       :-
         "I saw that the facts of Dada Abdulla's case
         made it a very strong indeed, and that the
         law was bound to be on his side. But I also
         saw   that  the   litigation,  if   it  were
         persisted in, would ruin the plaintiff and
         the defendant, who were relatives and both
         belonged to the same city. No one knew how
         long the case might go on.     Should it be
         allowed to continue to be fought out in
         court, it might go on indefinitely and to no
         advantage of either party. Both, therefore,
         desired an immediate termination of the
         case, if possible.
I approached Tyeb Sheth and requested and
advised him to go to arbitration.          I
recommended him to see his counsel. I
suggested to him that if an arbitrator
commanding the confidence of both parties
could be appointed, the case would be
quickly finished. The lawyers' fees were so
rapidly mounting up that they were enough to
devour all the resources of the clients, big
merchants as they were. The case occupied so
much of their attention that they had no
time left for any other work.        In the
meantime   mutual   ill-will  was   steadily
increasing. I became disgusted with the
profession. As lawyers the counsel on both
sides were bound to rake up points of law in
support of their   own clients.   I also saw
for the first time that the winning party
never recovers all the costs incurred. Under
the Court Fees Regulation there was a fixed
scale of costs to be allowed as between
party and party, the actual costs as between
attorney and client being very much higher.
This was more than I could bear.      I felt
that my duty was to befriend both parties
and bring them together. I strained every
nerve to bring about a compromise. At last
Tyeb Sheth agreed.       An arbitrator was
appointed, the case was argued before him,
and Dada Abdulla won.
But that did not satisfy me. If my client
were to seek immediate execution of the
award, it would be impossible for Tyeb Sheth
to meet the whole of the awarded amount, and
there was an unwritten law among the
Porbandar Memons living in South Africa that
death should be preferred to bankruptcy. It
was impossible for Tyeb Sheth to pay down
the whole sum of about # 37,000 and costs.
He meant to pay not a pie less than the
amount, and he did not want to be declared
bankrupt. There was only one way.       Dada
Abdulla should allow him to pay in moderate
installments. He was equal to the occasion,
and granted Tyeb Sheth installments spread
over a very long period.       It was more
difficult for me to secure the concession of
payment by instalments than to get the
parties to agree to arbitration. But both
were happy over the result, and both rose in
         the   public   estimation.     My  joy   was
          boundless. I had learnt the the practice of
          law. I had learnt to find out the better
          side of human nature and to enter men's
          hearts. I realized that the true function of
          a lawyer was to unite parties riven asunder.
          The lesson was so indelibly burnt into me
          that a large part of my time during the
          twenty years of my practice as a lawyer was
          occupied    in    bringing   about   private
          compromises of hundreds of cases.     I lost
          nothing thereby-not even money, certainly
          not my soul."
    In our opinion, the lawyers should advise their clients
to try for mediation for resolving the disputes, especially
where   relationships,       like    family   relationships,        business
relationships,      are     involved,       otherwise,     the    litigation
drags   on    for   years    and    decades   often   ruining      both   the
    Hence, the lawyers as well as litigants should follow
Mahatma      Gandhi's     advice      in    the   matter    and    try    for
arbitration/mediation.         This is also the purpose of Section
89 of the Code of Civil Procedure.
    Let the matter be referred to the Bangalore Mediation
Centre.       The   parties are      directed to      appear before       the
Bangalore Mediation Centre on 21.02.2011.
    List after receiving report from the Mediation Centre.
                                  (MARKANDEY KATJU)
                                  (GYAN SUDHA MISRA)
JANUARY 14, 2011.



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