Creative Contractors Ltd (CCL), a listed Company entered into a long-term contract with Mahati Interiors (MI), an architect firm run by Mahati. The contract was finalised on February 15, 2021. As per the terms of the agr

Creative Contractors Ltd (CCL), a listed Company entered into a long-term contract with Mahati Interiors (MI), an architect firm run by Mahati. The contract was finalised on February 15, 2021. As per the terms of the agreement, Mahati was to provide designs as per the specifications by clients of the Company. Whatever may be the negotiations with the Client, the Company needs to pay ₹ 1 Lakh per design, subject to applicable taxes. The terms and conditions including the resolution of any disputed matters, to be settled by way of arbitration was clearly mentioned in the agreement and duly signed off by the parties and witnesses. On an average, annual payout as per the assignments from time to time was in the range of ₹ 60 to ₹ 80 Lakh. Disputes arose on reductions in payouts due to rejection of certain designs by the clients of the Company, for which Mahati protested for non-receipt of an amount of ₹ 50 Lakh. Seemingly, the matter was required to be settled through arbitration. The arbitration clause of the agreement indicated that in case of any dispute, the matter can be settled through arbitration, on appointment of one to three Arbitrators as may be mutually agreed. Mahati, did not have much of administrative support and was busy preparing designs for clients. In this process, she had misplaced the copy of agreement with the Company. She was also not willing to pay Arbitrator fee, more than ₹ 25,000, irrespective of the number of sittings or the time taken for completing arbitration proceedings, in other words, she wanted to make only one time payment. A two-member arbitral tribunal was constituted, having been chosen by the Company and Mahati respectively. While petitioning before the Arbitral Tribunal, Mahati quantified her claim of ₹ 50 Lakh together with interest thereon @ 16% per annum and damages of ₹ 50,000, though there was no clause on interest in the agreement. The Company wanted to change the Arbitrator, if permissible. Mahati was having a second thought if she could approach the Civil Court to claim the unpaid fee and damages, although there was an arbitration clause. The parties were not sure of the contract terms and were relying on communication exchange, work orders and certain oral evidences. The Company noticed after two hearings, that one of the arbitrators suffers from competence and wants to find grounds for challenging his appointment. Further, they wish to ascertain the competence of the Tribunal in passing any interim measures. However, both the parties are aware that the Arbitration Tribunal proceedings are not bound by the rules and procedures in terms of Civil Procedure Code, 1908 and Indian Evidence Act, 1872, but bit unsure as to the procedures to be agreed and suggestions to be made in this behalf. For proper conduct of proceedings, the Company suggested that the suitable place is their meeting room at the registered office for which Mahati agreed. They agreed to get the proceedings conducted on the basis of documents and evidences and to avoid any oral evidences or arguments as far as possible. Both the parties agreed with the Tribunal to appoint experts, as and when necessary. The arbitration proceedings were continuing for the last one and half year and there is less expectation of its completion within next twelve months. Parties desire to know the consequences for such inordinate delay. Unfortunately, during the pendency of arbitration proceedings, Mahati met with a fatal accident and passed away. She was survived by her husband and two minor children. In the background of the above facts, answer the following: (c) The Company contends that the arbitration agreement is discharged after Mahati's demise. Is the Company's contention justified ?