JAGDISH SINGH KHEHAR,CJI - (1.) Heard learned counsel for the rival parties.
(2.) The appellant - Grasim Industries Ltd. was engaged in the manufacture of rayon grade wood pulp, in the Kozhikode District, of the State of Kerala. The appellant company obtained certain grants from the Government of Kerala, for an exclusive right and licence to fell, cut and remove bamboos, from certain areas in the Nilambur valley, for the purpose of converting the same into rayon grade wood pulp and ancillary products. The first of such contractual agreements was executed on 03.05.1958. The same was followed by supplementary contractual agreements dated 06.08.1962, 10.07.1974, 16.11.1976 and 27.10.1988. In the first agreement dated 03.05.1958, clause 16 provided for settlement of disputes arising under the contract, through arbitration. The same read as under: "If at any time hereafter either during the continuance or after the termination of the Agreement, any doubt, difference or dispute shall arise between the parties hereto touching or concerning their respective rights or privileges hereunder or otherwise arising out of these presents then the same shall be referred to the arbitration of three independent persons as arbitrators, one to be appointed by each party to the reference and the third, by both the parties thereto, and the unanimous decision of the said arbitrators or in the event of any difference of opinion amongst them the decision of the majority of them, shall be binding and conclusive on the parties to the reference and every such reference shall be deemed to be a reference to arbitration under the Indian Arbitration Act, 1940 and shall be regulated and conducted accordingly."
(3.) The successor agreements, after the original agreement, postulated modifications in the terms of the contract. We are only concerned herein, with the supplementary agreement dated 27.10.1988, wherein clause 11 provided as under: "11. Subject to the modifications mentioned above, the Principal Agreement and the First, Second and Third Supplemental Agreements shall remain in force and effect." ;